More to come from Canberra

WHILE a number of manufacturers may have been upset regarding the outcome of the recent federal election, no one can deny Senator Kim Carr’s commitment to Australia’s manu facturing industry.

Over the past three years as Industry Minister, Carr has pushed hard to obtain the fund ing for industry assistance schemes, and says he has no plans to slow down.

Carr has a number of new schemes on his hit list for this three-year term, but one close to his heart is the just-introduced R&D tax credit scheme which is set to replace the cumbersome R&D tax concession scheme; often described as a gravy train for accountants.

“I want to provide more assis tance to SMEs; the backbone of our manufacturing industry here in Australia,” Carr told Manufacturers’ Monthly.

“The R&D tax credit scheme is an opportunity to double the level of support for SMEs, restor ing it to pre-1996 levels, and increase the level of support in cash terms for larger businesses by one third.”

Describing it as a “far simpler scheme, with less red tape and compliance involved”, he said there will be a 45% refundable credit for firms turning over less than $20 million a year, and a 40% non-refundable credit for all other firms and will include “factory floor R&D”.

“Most important of all, smaller firms in tax loss will be able to take the credit as cash,” Carr said.

As well as being simpler, he said the new scheme is more gen erous and more predictable, and decouples R&D tax incentives from the corporate tax rate.

“There are around 8,000 firms registered for the R&D Tax Concession, but over half the benefit goes to just 200 of them,” he said.

“International firms will also be able to claim the new credit, regardless of where the intellec tual property is owned. This gives us a chance to attract the most research-intensive interna tional firms to our shores.

“This really is a landmark reform — arguably the most important change to business innovation support in a genera tion.

“The scheme is about putting cash into businesses, particularly at a time when liquidity is a major issue, and will supplement our program for Australia’s industrial PhDs in which I’m put ting a trial program out there with 200 industrial PhDs, mainly in manufacturing areas.

“We have to lift our perform ance on R&D in Australia, plus lift our cooperation with univer sities and our science agencies such as CSIRO.

“As well as providing financial incentives, we will provide busi ness support through Enterprise Connect. So far over 3000 firms have directly accessed the scheme, and we are looking to increase that number.

“We have over 100 business advisers located in 12 manufac turing innovation centres around the country providing direct advice to individual firms, mak ing sure they get access to the best technical advice they can get from our scientific and research facilities.

“What we are trying to do is transform Australia’s manufac turing industry, firm by firm. We actually want to go down to that level of engagement.”

While Carr is a huge supporter of Australian manufacturing, he is luke-warm, at best, on the Greens idea of a 10% import duty on everything imported.

“I really can’t see it happen ing. It is not practical,” he said.

“I’m in the business of provid ing direct assistance to individ ual firms, but also being consis tent with our international obligations. It is very important we see ourselves as exporters and not try to lock ourselves up from the rest of the world.

“There are huge opportunities for us. Now we have considerable pressures and challenges being posed by the currency volatility and with the international trade situation, but that shouldn’t stop us from having a red hot go at it.”

Aiming to consolidate the gains made in Labour’s first term of government, Carr said he is looking to the encouragement of industry to further transform itself to meet the challenges of the future.

“There is a real need here for us to meet the competitive pressures for exporters with regard to the volatile Aussie dollar,” he said.

“We have to face the fact that we have to be more competitive by lifting our education stan dards and improving access to skills by encouraging investment, and by encouraging manufactur ers to re-tool and reinvent them selves for the 21 century.

“The foundations for that were laid down through Enterprise Connect and through our 10-year innovation agenda, Powering Ideas, through the establishment of Commercialisation Australia, through the eight innovation councils and in particular the introduction of the new R&D tax credit scheme.

“We also have the new car plan for a greener future, we have a textile industry plan and we have opportunities through the new initiatives such as Clean Business Australia and Clean 21.

“Over the past three years we have made major progress in insuring that there are many hundreds of thousands of Australians, either who own busi nesses or work in manufacturing businesses that are still operat ing today that otherwise would n’t have been.

“Our success during the eco nomic crisis is testament to the quality of the programs, but in particular the ability to build good partnerships across all the different sectors of the manufac turing industry. It’s also about insuring we are able to adapt to new technologies and deploy new technologies as quickly as possible.

“It’s not about standing still, or pining after a golden era, long past, it’s about dealing with life as it’s today and preparing for the future.

“As far as I’m concerned, man ufacturing has a vital role to play, not just in economic terms, but in social terms.”

Senator Kim Carr minister.innovation.gov.au