The weight of global evidence suggests Research & Development tax incentives are an effective policy to induce more R&D. As a consequence, R&D tax incentives are now a feature of most OECD economies.
Data also shows that Australia’s R&D tax system creates ad
ditional R&D spending by Australian business.
A recent landmark study from Swinburne University of Technology has found that for every A$1 of tax not collected by the Australian government, in the context of its R&D tax incentive system, a business spends an average additional 80 cents to A$1.90 on R&D.
Professor Beth Webster, Director of Swinburne’s Centre for Transformative Innovation, commenting on the study, said few examples of Australian tax policy are subject to as frequent change as the Research & Development tax subsidy.
“The tax is again under review by the federal government,” she says. “Substantive changes to the rules have occurred every five of the past 20 years.
“By contrast, the US has had essentially the same R&D tax rules since 1990.
“Change has a cost. Changing the tax system imposes uncertainty and information costs on business,” Professor Webster says.
Read the Swinburne Centre for Transformative Innovation study, “The Additionality of R&D Tax Policy in Australia”.