Tax breaks and money for startups ‘can help R&D recover from Covid-19 crisis’
The federal government must develop new incentives to attract industry investment in R&D or risk jeopardising Australia’s economic recovery from the Covid-19 pandemic, a national science association has said.
These incentives should include grants for startup industries and tax breaks for businesses to collaborate with research institutes, universities and government agencies.
Science and Technology Australia, which represents more than 88,000 scientists and science technicians, says a new grants programme is needed to speed up commercial uptake of research.
STA chief executive Misha Schubert said Australia could not afford to lose critical investment in R&D during the Covid-19 global crisis.
“Indeed, our current capacity to respond in the fight with Covid-19 is due to long-term investment over decades in science and research,” she said in a formal statement.
“The ongoing challenges of 2020—from bushfires, air quality, drought and flood through to the current Covid-19 crisis—have shown why we must never cut funds to science and technology.”
In a submission to a Senate economics report on the federal R&D tax incentive scheme, STA president Jeremy Brownlie said that research attributed to the scheme “would have most likely occurred without the incentive”.
He said that while the scheme provided $2.6 billion in tax refunds in the 2017-18 financial year, it did not encourage new research.
The submission recommends setting up a Research Translation Fund to increase industry investment in R&D through greater support for the tests and trials needed to turn research results into commercial products.
It also suggests a 20 per cent “collaboration premium” for projects that involve Australian research institutes, universities or government agencies.
“Since 2016-17 the investment from the R&D tax incentive has fallen, indicating that less is being spent by industry on research and development. This fall in investment has come at a time when investment in research and development should be incentivised to stimulate the economy,” the submission says.
It says proposed changes to the tax incentive scheme are expected to save $435 million in 2020-21, and these savings should be reinvested in R&D to support research translation.
“In the current research funding environment, Australian Research Council Linkage grants aim to provide funding for industry-backed research, but this is still heavily researcher-driven,” the submission says.
“While the Linkage grants can work to turn research into final products, the Research Translation Fund would then develop these products into new and exciting industries in Australia’s economy. We anticipate the ARC would administer such a research fund with a focus on addressing gaps in the innovation pipeline for key Australian industries.”