Payments under the R&D Tax Incentive this year will be $206 million higher than forecast in the May Budget as companies engage in more research and development.
Publication of the Mid Year Economic and Fiscal Outlook confirmed the increase, equating to $1.8 billion over the four years to 2018-19, which flows from higher aggregate spending on R&D.
Despite its stated and policy support for innovation, most recently highlighted in the release of its National Science and Innovation Agenda, the Turnbull Government has maintained the Abbott Government’s commitment to cut the value of the R&D Tax Incentive by 1.5 per cent.
The Government capped claims under the programme earlier this year.
The Incentive, which is considered a key and internationally competitive mechanism for Australia to attract investment in R&D, is also the subject of a review. The review was initially announced to be conducted by Treasury but will now be undertaken by the recently announced newly created national innovation agency.
AusBiotech has argued against any further winding back of the Incentive.