Small and medium enterprises will have access to a tax rebate for the R&D tax concession, designed to help cash flow and ensure the level of "exciting developments (that) emerge from smaller companies" is continued, Prime Minister John Howard has revealed.
The details were released as part of the federal Coalition's $2.9 billion initiatives under
Backing Australia's Ability, the innovation policy released today. It focused on three elements:
- strengthening the ability of businesses/organisations/people to generate ideas and undertake research
- accelerate the commercial application of these ideas
- develop and retain Australian skills.
Howard says over five years, it is estimated up to 1,300 small companies in tax loss will get early access to $30 million at a net cost of $13 million.
"Our absolute commitment to the small and medium-enterprise (SME) sector will see $535 million over five years used to maintain the highly successful START program into the future - it becoming an ongoing mechanism to help the hundreds of companies where grant assistance is most appropriate," Howard says.
Another R&D initiative involves reforming the R&D tax concession to include the provision of a premium rate of 175% for additional R&D activity.
"This premium targets the labour-related components of R&D expenditure and so will help develop Australian skills and expertise," he says.
"In accordance with the approach taken to business tax reform, effective-life write off will apply to the government's existing R&D tax concession scheme, simplifying it and providing a consistent treatment between R&D plant and other capital items in the tax system.
"The reform of the existing R&D concession scheme will ensure that the commercial realities surrounding the conduct of these activities are dealt with more adequately and collectively, the changes being made will provide Australia with one of the best tax based R&D support mechanisms in the OECD."
Education, Training and Youth Affairs Minister Dr David Kemp says the historic strategy recognises that Australia must develop its research base by strengthening its skills base, as well as encouraging a wider interest in science, maths and technology.
"The strategy will introduce measures to excite and retain Australian researchers, attract increased business support and develop the next generation of innovators," Kemp says.
Other initiatives include:
- boosting research infrastructure funding by $583 million
- increasing funding to universities by $151 million to create 21,000 additional fully funded undergraduate university places over five years, with priority given to ICT, mathematics and science - to be backed by adjustments to existing immigration arrangements to attract more migrants with ICT skills
- encouraging lifelong learning by introducing an income-contingent loans scheme for postgraduate fee-paying students.
"More and more people are coming to understand that innovation, as a concept, is not the preserve of just a small group of Australians, but the means by which all of us, in small business, as employees in large companies, as primary producers, as parents wanting better opportunities for our children, will succeed," Howard says.
For more information, view Prime Minister John Howard's speech on the innovation policy at
his website.