R&D tax credit wins support

The Labor Government’s R&D tax credit will help businesses in every sector of the Australian economy transform and invest in the future - leading to more high-wage, high-skill jobs.

The credit, which has passed the Parliament, is a key element of the Government’s innovation agenda, Powering Ideas, a comprehensive program to transform and secure a future for Australian industry.

Innovation minister senator Kim Carr said the credit effectively doubles the support for small firms to 15 cents in the dollar and increases support for all other firms by a third, to 10 cents in the dollar.

The legislation will start retrospectively from 1 July 2011. The two core components of the credit are a 45% refundable R&D tax credit for small firms with turnover of less than $20 million and a 40% non-refundable R&D tax credit for all other firms.

“The R&D tax credit will act as a beacon to attract more firms, particularly small and medium firms, to undertake research and development in Australia,” Senator Carr said.

“Firms need to embrace innovation to remain competitive. Future job creation will come as companies transform and adopt new practices. Putting it simply, firms that innovate will survive and be the market leaders of tomorrow.”

The credit was supported in Parliament by the Greens and all members of the crossbench in both houses. It was opposed by the Coalition.

Senator Carr said the tax credit would complement Clean Energy Future and build upon other initiatives like Enterprise Connect and Commercialisation Australia, to provide unprecedented levels of support for Australian innovative firms.

“By supporting Australian industry to perform research and development we are helping firms transform to be more productive and creative - securing a prosperous tomorrow,” Senator Carr said.

For more information, visit www.innovation.gov.au