The Senate today passed research and development reforms after the Greens secured amendments to help companies manage cashflow.
The reforms, encapsulated in the Tax Laws Amendment (Research and Development) Bill 2010, propose a credit system that gives a 45 per cent refundable R&D tax credit to organisations that are not more than 50 per cent owned or controlled by a tax-exempt entity and have an aggregated turnover of less than $20 million per annum. All other companies receive a 40 per cent non-refundable R&D tax credit. The government expects to hand out $1.6 billion in tax credits annually.
Instead of receiving the tax credit in an annual lump, the Greens successfully pushed to have quarterly payments, which the party felt would improve cashflow for the companies.
"Australia has been left behind in recent decades, with not only the loss of manufacturing jobs to low wage economies, but also the failure of manufacturers to innovate when they had such low-cost resources," Australian Greens deputy leader, Christine Milne, said. "Increasing productivity through innovation now has to be Australia's top priority.
"With these important structural reforms, much more support will be delivered to the small and medium-sized enterprises that are genuinely the engine room of innovation in Australia.
"The amendment secured by the Greens will help even more, ensuring that those smaller companies will have access to the cashflow that they need to drive their ideas from innovation through to market."
The agreement on the amendments came about following a stakeholder roundtable with representatives from the Treasury, government departments and industry.