Innovation reforms not funded from new R&D tax cuts

Policy

Innovation Minister Christopher Pyne says the Government has no current plans to use further cuts to the R&D Tax Incentive to fund its National Innovation and Science Agenda.

The source of funding for the $1.1 billion package will be released as part of next week's Mid Year Economic and Fiscal Outlook.

The were "no plans at this stage to find savings in the R&D Tax Incentive," Mr Pyne told the National Press Club.

According to the Minister, a Treasury review of the highly-regarded tax incentive already underway will be shifted to Innovation and Science Australia, a new independent agency established as part of the reforms announced earlier this week.

Mr Pyne said any changes to the R&D Tax Incentive would depend on recommendations from that review.

The Government has faced criticism from the R&D sector, including AusBiotech, for changes to the R&D Tax Incentive.

It secured support in the Senate earlier this year from the Palmer United Party for changes to the R&D Tax Incentive that imposed a $100 million cap on claims applied retrospectively to 1 July last year. The Senate has so far rejected a 1.5 per cent cut in the R&D Tax Incentive.