Coalition moves on R&D tax cut

Latest News

The Turnbull government has introduced its single omnibus Bill including 24 measures totalling more than $6 billion in savings.

The measures include the cut in the R&D Tax Incentive, which Labor reversed its opposition to during the recent campaign, but not the proposed increase in PBS co-payments and safety-net thresholds announced in the 2014-15 Budget.

"This bill simply brings forward and outlays savings measures that were incorporated into Labor's fiscal projections at the last election. No more; no less," said Treasurer Scott Morrison.

"We are strongly asking the opposition to vote for measures they promised to support at the last election, by including them in their own fiscal estimates that they presented at that election."

Under the billion dollar changes to the R&D Tax Incentive, the rates of the refundable and non-refundable tax offsets for the first $100 million of eligible expenditure will be cut by 1.5 per cent. 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. 

The decision to proceed with the cut comes despite significant concern in the life sciences sector, particularly following previous changes and an ongoing review.

The Turnbull government announced a review of the R&D Tax Incentive program in December last year as part of the National Innovation and Science Agenda.

The Review is being conducted by Mr Bill Ferris AC, Chair, Innovation and Science Australia, Dr Alan Finkel AO FTSE, Chief Scientist of Australia, and Mr John Fraser, Secretary to the Treasury.