AUSTRALIA’s business innovators have been “very interested” in the suggestions and comments from Prime Minister Malcolm Turnbull and government ministers, according to research by RSM Bird Cameron.
RSM Bird Cameron director Stephen Carroll said the latest discussion regarding an innovation strategy for Australia and the development of crowd funding are more indicators that the government understands the needs of the innovation community and the gaps that should be filled.
“The only concern is that the government ensures its innovation support is broad-based and does not try and pick winning industries,” Mr Carroll said. “Many of the comments are based on the technology industry but all industries and technologies should be embraced and supported with a comprehensive innovation strategy.”
Mr Carroll said developing a suite of government programs and support mechanisms around the very successful research and development (R&D) tax incentive is what the innovation community has been seeking for many years.
For Australia to get maximum economic benefits from innovation opportunities, support is required from start-up all the way through to commercialisation.
“At the start-up end, the comments regarding crowd funding and angel investor capital gains relief are very good,” Mr Carroll said. “By providing the market with some small benefits and the mechanics to allow them to invest capital, the government is facilitating business to make commercial decisions to help support projects that they believe are most viable.
“This should assist with the collaboration needed between business and universities to help with spin offs and better commercialisation returns. What would also assist this would be a slight increase in the R&D tax incentive when companies engage with universities for R&D.”
During the innovation developments stages of a project R&D tax and grant programs have worked well and are in the most part applied successfully. However, there has been no significant analysis, particularly of the R&D tax program, for many years.
Stephen Carroll said, “There is often an argument about the cost to Australia of R&D tax, with little or no economic analysis. For instance, R&D tax in a private business is fundamentally not a cost to Treasury as the tax benefit results in a reduction to its franking account. It is therefore a cost to the shareholders.
“RSM Bird Cameron strongly encourages the government to truly assess and share the results of the cost and benefit of the R&D tax incentive and ensure that future Australian federal budgets appropriately account for it.”
Education and skills development is recognised as critical for successful innovation, Mr Carroll said.
He said a broad range of government and private based programs were available across Australia and these were helping build knowledge and networks required for long term innovation success.
“An Australian innovation strategy that pulls these together in some way to help sharing and collaboration, and potentially funding the more successful versions, would be very beneficial,” Mr Carroll said.
“At the commercialisation end of the process, the Australian taxation system must be fully assessed with an international consideration to determine what commercial tax levers the government needs to change or develop.
“The patent box program is one of these that other countries are now adopting and Australia should ensure that it is being assessed during a tax review process.”
RSM Bird Cameron Melbourne is an Industry Expert member of Victorian Leaders, the organisation helping to foster the next generation of leading Victorian companies.