The Gillard Labor government's R&D tax credit passed parliament on 24 August.
The credit has two core elements: a 45 per cent refundable R&D tax credit for small firms with turnovers of less than AU$20 million and a 40 per cent non-refundable R&D tax credit for all other firms.
According to Kim Carr, the innovation minister, the credit will double support for small firms to 15 cents in the dollar and will increase support for all other firms by a third, to 10 cents in the dollar.
The credit is a key component of the government’s innovation agenda, Powering Ideas, which aims to transform and secure a future for Australian industry.
Carr said the R&D tax credit would complement the Clean Energy Future initiative and build on other initiatives, such as Enterprise Connect and Commercialisation Australia, to provide more support for innovative Australian 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,” said Carr.
The legislation will start retrospectively from 1 July 2011.