R&D tax concession having a positive impact

THE R&D Tax Concession is said to be having a long-term impact on business R&D collaboration, management and commercialisation, according to a report released yesterday (13th) by Industry Minister, Ian Macfarlane.

THE R&D Tax Concession is said to be having a long-term impact on business R&D collaboration, management and commercialisation, according to a report released yesterday (13th) by Industry Minister, Ian Macfarlane.

The report, How R&D Assistance Influences Company Behaviour, is said to be the first in the world to investigate the behavioural impact on companies of an R&D tax concession using the OECD ‘behavioural additionality’ methodology.

“This report illustrates the key role the Tax Concession plays in building innovative Australian firms,” Macfarlane said.

“It builds competence, collaboration and commercialisation, all of which are strong markers of innovative firms.

“One of the biggest impacts of using the R&D Tax Concession is that projects proceed faster. This has important commercial implications, because speed-to-market is critical for successful new product development,” Macfarlane said.

Key findings of the report include:

a positive impact on company R&D budgets;

faster R&D activity;

a better understanding of the benefits of R&D;

a higher commitment to R&D;

improved management of R&D;

improved business strategy in the firm; and

increased collaboration with universities.

Macfarlane said the Tax Concession is expected to play an even greater role in the years ahead due to Howard Government’s recent changes to the beneficial ownership provisions of the 175% Premium.

The Australian R&D Tax Concession encourages investment in R&D by more than 6,000 Australian businesses of all sizes and across all sectors. In 2005-06, the total R&D registered for the Concession was more than $9bn, a record high.

The report is available at: www.industry.gov.au/RandDtaxbehaviour.