AusBiotech welcomes Greens' push for quarterly payments on R&D Tax Incentive

AusBiotech fully supports the Australian Greens’ moving of an amendment in the Senate to put in place quarterly payments for small and medium-size businesses eligible for an R&D Tax Incentive refund.

The Tax Laws Amendment (Research and Development) Bill 2013 is currently before the Senate to cap the incentive, with crossbench senators to determine its passage. The biotechnology industry welcomes the Greens’ proposed amendment that would see the quarterly payments revived.

AusBiotech has been a tireless advocate for quarterly payments, since the first announcement on the tax incentive in 2009. A survey conducted by AusBiotech indicated the timing of the receipt of payments (ie, quarterly or annually) is a critical factor in its value as an incentive for additional R&D activities.

Dr Anna Lavelle, CEO of AusBiotech, said: “The quarterly payments have been carefully reviewed, planned, consulted upon and costed by government with industry and we can see no legitimate reason why they did not progress.”

The quarterly payments were a condition of the legislation’s original passage, negotiated by the Greens and supported by AusBiotech, when it was passed in 2011. Subsequently, the quarterly payments were heavily consulted on, fully designed and were progressing through parliament ready for their planned 1 January 2014 implementation when parliament dissolved for the last election. The new Coalition Government then stalled the reform and later scrapped it, much to the disappointment of the industry, which had waited patiently for the ability to smooth out cashflow over the year and increase predictability.

“The quarterly payments are in keeping with the policy intent to support young, entrepreneurial, innovative, home-grown companies that are commercialising our research and would be a far greater help than the newly launched Entrepreneurs’ Infrastructure Programme,” said Dr Lavelle.

“To lose the payments was a further blow to small start-up innovative companies that have been struggling in the post-GFC and ‘unfriendly’ business environment, and we urge the Senate to accept the amendment that would make them a reality.”

Quarterly payments were planned as an opt-in element of the R&D Tax Incentive for companies with an aggregated turnover of less than $20 million. It allowed companies eligible for the R&D refundable tax offset to obtain the benefit of the offset on a quarterly basis during an income year, rather than waiting until an income tax return is assessed, thereby providing critical cashflow to young companies