Although not to the same level (quite) as the death of JFK or Diana, the impact of the reduction of the R&D tax concession from 150% to 125% back in 1996, when I was a University post-doctoral researcher working on industry funded projects, was memorable in that the “news” was interpreted by our industry team leader with the implication that it would result in the end of our group.
As such, this change was perceived as having jeopardised the viability of our long standing relationship with our industry sponsor – a technology based Australian multi-national company. This would put at risk many of the mutual and synergistic benefits that the collaboration had provided including:
- industry access to first-class scientists and facilities;
- academic focus on market and technology driven business opportunities;
- knowledge development and transfer in both pure and applied research; and
- industry-related training and employment opportunities for students
all of which are key foundational ingredients in Australia’s innovation future.
Historically, the R&D tax concession program has provided a funding incentive that has underpinned the relationship between many Australian companies and the group of research centers (Universities, CSIRO and technology service providers) qualified as Registered Research Agencies (RRA’s). Importantly, this incentive program has fostered relationships between technology-driven enterprises and the intellectual resources of the research community offering a broader scope for industry to support and engage in both pure and applied research.
Since exiting the research field to work in a “proper job” with a stable career path, I wonder how Australia’s investment in its bright young scientists will most effectively be fuelled? Lifting the R&D tax concession back to an “effective” 150% rate, delivering 15 cents (up from 7.5 cents) in the R&D dollar to Australia’s business community must clearly be the most effective action to take. Importantly, this change would deliver an immediate and universal R&D incentive (with no lengthy application process involved) in direct support of the R&D needs for all Australian tax-paying entities.
Surely, the R&D tax concession delivers exactly what Australia’s innovation future needs. There is an imperative for the Cutler Innovation Review to put an “effective” incentive back in the hands of the innovation stakeholders.
Make it happen – raise the R&D tax concession rate to 150% and better still to 200% for RRA’s!
This is one reason why innovation should go hand in hand with customer centricity. You need to figure out what your customers need in order to make a strategy for innovation.
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