The billion dollar cut in the R&D Tax Incentive is one of 21 savings measures the Turnbull government has included in an omnibus Bill it will put to parliament when it resumes at the end of August.
The package of savings, which adds up to $6.5 billion, include those government understands Labor backed in the lead up to the recent election. However, Labor says it will now consider the measures before committing to a position. Labor reversed its long-standing opposition to the cut in the R&D Tax Incentive during the recent election campaign. AusBiotech has consistently expressed concern over the impact of the cut, coming on the back of the introduction of an expenditure claim threshold of $100 million under the program.
The cut, which is budgeted to deliver $990 million in savings, includes a 1.5 per cent reduction in the R&D Tax Incentive claim rates. Under the proposal, the refundable rate will drop from 45 per cent to 43.5 per cent and the non-refundable rate will drop from 40 per cent to 38.5 per cent.
A redirected review of the R&D Tax Incentive program was announced in December last year as part of the National Innovation and Science Agenda, having been previously announced earlier in the year as a Treasury-led review. The review is being conducted by Mr Bill Ferris AC, Chair, Innovation and Science Australia, Dr Alan Finkel AO, Chief Scientist of Australia, and Mr John Fraser, Secretary to the Treasury.
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