The Government does not know the full impact of recent changes to the R&D Tax Incentive.
The Abbott Government has faced criticism from the R&D sector, including AusBiotech, for recent changes to the R&D Tax Incentive.
In a late-night deal, the Government secured support in the Senate from the Palmer United Party for changes to the R&D Tax Incentive that will see a $100 million cap on claims applied retrospectively to 1 July last year.
The Senate rejected a 1.5 per cent cut in the R&D Tax Incentive.
The Tax Laws Amendment (Research and Development) Bill 2013 was initially designed to exclude companies with a $20 billion turnover from accessing the R&D Tax Incentive.
In response to a question on notice at the most recent Senate Estimates, officials from the industry and science portfolio have told the Senate that they can not determine the extent of the impact of the change.
"The department cannot determine if companies that were not affected by the $20 billion turnover threshold, as announced in the budget, are now affected by the $100 million expenditure threshold," it says.
One of the key criticisms of the change is the potential impact on small to mid-size biotechnology companies.
AusBiotech said the change was significant for the Australian innovation ecosystem and will inevitably impact many more companies than originally intended.
CEO Dr Anna Lavelle recently told BiotechDispatch that, while the measure is aimed at large companies, the impact will be felt across industry, with more investment expected to move offshore and the ecosystem that supports small developing companies set to contract as R&D funds are extracted from the sector.