Review of the R&D Tax Incentive: Response to the Consultation

This submission responds to the report of the Review Panel on the R&D Tax Incentive Programme, addressing each of its six recommendations from the perspective of commercialising health and medical research (HMR). Research Australia supports retaining the current definition of eligible activities with new guidance, stressing the need for policy stability, and supports a collaboration premium of up to 20%, suggesting reduced registration and claims requirements and earlier refunds for companies collaborating with publicly funded research organisations. Its central argument is that the proposed $2 million cap on annual cash refunds should not apply to companies commercialising HMR, which face long timeframes, high costs such as clinical trials and little access to venture capital or debt. It notes that HMR accounted for $1.01 billion, or about 5.5%, of the $18.4 billion in R&D expenditure registered in 2014–15, so an exemption would cost little, and cites CSL, Cochlear and ResMed as examples of long development paths. On the proposed 1–2% intensity threshold, it proposes that companies exceeding the threshold receive the offset on all their R&D, and recommends financial modelling of Recommendations 4 and 5 and release of de-identified programme data. It supports targeting administrative improvements at the refundable offset, where compliance costs are proportionally highest, and publishing claimants’ names and amounts.