BCA welcomes recommendations from R&D review

The Business Council of Australia has welcomed recommendations to strengthen Australia’s research and development (R&D) system from the independent panel tasked with reviewing it.

The independent panel, chaired by Robyn Denholm, conducted a review into how Australia could get greater value from research investment, grow business R&D, and leverage Australia’s scientific strengths to address national priorities and build new industries.

The final report recommended that the R&D tax incentive (RDTI) be reformed to simplify administration and focus the scheme for greater impact.

It also recommended that the government incentivise startups through a premium RDTI segment, providing streamlined access to improved benefits for high-potential firms.

The report also called for an increase in RDTI incentives for corporations and multinational corporations to undertake local research and development activities and to drive partnerships, procurement, investment, and M&As.

BCA chief executive Bran Black said improving Australia’s R&D settings would help attract investment, drive new economic opportunities and support higher living standards.

“Especially at a time of global economic uncertainty, we must prioritise attracting more investment to Australia, and so addressing our R&D settings is critical,” Black said.

“With productivity front and centre in the upcoming Budget, many of this Report’s recommendations are a no-brainer. Taking them up would help lift investment, drive productivity and improve living standards.”

Black said the BCA had long called for many of the proposals in the report, including reforms to the Research and Development Tax Incentive (RDTI) and stronger collaboration between universities and industry.

“We strongly support proposed reforms to the research and development tax incentive to make it simpler and more effective. Removing the $150 million cap, streamlining administration and removing the R&D intensity measures would ensure Australia’s R&D system attracts investment,” he said.

The business advocacy group also welcomed reform proposals to strengthen collaboration between universities, researchers and industry, and to help ensure more Australian ideas are developed, commercialised and manufactured locally.

BCA said that while Australia has a strong history of innovation, business investment in research and development has declined over the past decade, while many international competitors have increased their support for local innovation.

“It’s good to see the report recognise the critical role large businesses play in R&D. They can invest at scale, drive innovation, and create benefits right across the economy,” Black said.

Black said better alignment of Australia’s research funding and capabilities with national and industrial priorities would also help ensure Australian research translates into stronger economic outcomes, particularly in areas such as health and medical research, technology, agriculture, defence, resources and energy.

BCA said it would continue working with government and industry to ensure Australia’s policy settings “encourage innovation, strengthen productivity and support economic growth.”