The Abbott Government's decision to have a second attempt at securing political support for its proposed 1.5 per cent cut to the R&D Tax Incentive appears set to fail.
Treasury has confirmed to BiotechDispatch that the Government remains committed to the proposal announced in last year's Budget.
Under the proposed change, the R&D Tax Incentive was to be reduced to 43.5 per cent for eligible entities with annual turnover under $20 million and 38.5 per cent for all other eligible entities.
Earlier this year, the proposal was removed from the relevant legislation in the face of political opposition.
Other changes to the R&D Tax Incentive did proceed thanks to a deal between the Government and the Palmer United Party.
"The Government indicated at that time that it remains committed to re-introducing legislation to change the rates of assistance for the R&D Tax Incentive," Treasury told BiotechDispatch. "The measure in the Budget reflects the Government’s policy position."
The timing of any second attempt at winning Senate support remains unclear, with political opposition still strong.
A spokesperson for Labor's Senator Kim Carr, the Shadow Minister for Higher Education, Research, Innovation and Industry, confirmed Labor's continued opposition to the cut, as did the Greens.
In his response to the Budget, Labor leader Bill Shorten announced a range of policies to back innovation, including a $500 million Smart Investment Fund.
He said that the Smart Investment Fund would partner with venture capitalists and licensed fund managers to co-invest in early stage and high potential companies, providing a Commonwealth investment of up to 50 per cent of the start-up capital needed to help Australian companies commercialise innovations.
AusBiotech CEO Dr Anna Lavelle welcomed the announcement as an important and encouraging first step.
Industry Minister Ian Macfarlane said Mr Shorten had no credibility on science.
"Australians should judge Labor by what they have done, not what they say they will do. And judging by their past actions, they cannot be trusted," he said. "In 2011, Labor cut funding to programmes designed to engage young people in science and maths. All we got from Labor was lofty rhetoric, unfunded thought bubbles, vague promises and posturing. Their proposals hide costs away into the future."
The Palmer United Party, which backed other changes to the R&D Tax Incentive that imposed a $100 million cap on claims applied retrospectively to 1 July last year, is down to one Senator following a series of resignations, including Glenn Lazarus who now sits as an Independent.