Building Regional Research Systems Across Australia – IRU Research Series Publication #3

Driving Sustainable National Prosperity: Building Regional Research Systems Across Australia, published today by the Innovative Research Universities (IRU), sets out a framework for Australia’s universities to fuel national economic growth and prosperity across all regions of Australia.
Regions are important drivers of sustainable national growth.
There is an urgent need to make better use of the potential from the breadth of the country, for example from its northern regions, to reduce the pressure on the major cities and create positive outcomes for all current and future Australians.
The creation of major new research infrastructure and the use of the Medical Research Future Fund are two crucial coming decisions for the Government where it must ensure a whole of Australia focus to get the most value from both.
Building Regional Research Systems Across Australia makes 7 recommendations for regional research systems that ensure that valuable research is conducted throughout Australia (see below).
Acting on these recommendations will provide the base for IRU members to create stronger clusters of researchers and research end users across Australia outside of the large capital cities. This will give substance to Greg Hunt, Minister for Industry, Innovation and Science’s ambition for more clusters (CEDA State of the Nation Address, 10 October 2016).
IRU members are embedded in the outer metropolitan areas of the State capitals and in Australia’s regional areas. Our research is crucial to building regional research systems and clusters across Australia.
Through the creative mix of local issues and global research challenges, IRU members across Australia generate research with benefits for communities and industries around the world.
Driving Sustainable National Prosperity: Building Regional Research Systems Across Australia is the third publication in the IRU Research Series.

It is available for download here.
Previous publications in the IRU Research Series are Industry Driven Research and Strengthening Research Across Asia – An Asian Research and Innovation Network.

For an overview of the seven recommendations download full statement below.

IRU Response to the Panel’s Research and Development Tax Review

The Review Panel, chaired by Mr Bill Ferris AC (Innovation Australia), Dr Alan Finkel AO (Chief Scientist) and Mr John Fraser (Secretary to the Treasury) was asked to identify opportunities to improve the effectiveness and integrity of the programme, including how its focus could be sharpened to encourage additional R&D. The Panel’s overall assessment is that the programme “falls short of meeting its stated objectives of additionality and spillovers” and that the programme could be “better targeted”.

In general the Panel’s report is in line with the IRU recommendations (below) to improve the incentives for industry to work with publicly-funded research organisations and to simplify the administration of the tax incentive. As expected, the Panel does not make a specific recommendation to include research in social sciences, arts and humanities (currently excluded) in the list of eligible activities. The Panel comes to the conclusion that it is too soon after the programme’s introduction to change the definition of eligible activities and expenses under the law.

The Panel makes six key recommendations: 

  1. Retain the current definition of eligible activities and expenses under the law, but develop new guidance, including plain English summaries, case studies and public rulings, to give greater clarity to the scope of eligible activities and expenses (Section 4.1, p. 30).
  1. Introduce a collaboration premium of up to 20 percent for the non-refundable tax offset to provide additional support for the collaborative element of R&D expenditures undertaken with publicly-funded research organisations. The premium would also apply to the cost of employing new STEM PhD or equivalent graduates in their first three years of employment. If an R&D intensity threshold is introduced (see Recommendation 4), companies falling below the threshold should still be able to access both elements of the collaboration premium (Section 4.2, p.  35).This is line with the IRU’s recommendation for strengthening the incentive for Research and Development carried out through publicly-funded research bodies 
  1. Introduce a cap in the order of $2 million on the annual cash refund payable under the R&D Tax Incentive, with remaining offsets to be treated as a non-refundable tax offset carried forward for use against future taxable income (Section 4.3, p. 37).
  1. Introduce an intensity threshold in the order of 1 to 2 percent for recipients of the non-refundable component of the R&D Tax Incentive, such that only R&D expenditure in excess of the threshold attracts a benefit (Section 4.4, p. 39).
  1. If an R&D intensity threshold is introduced, increase the expenditure threshold to $200 million so that large R&D-intensive companies retain an incentive to increase R&D in Australia (Section 4.4, p. 41).
  1. That the Government investigate options for improving the administration of the R&D Tax Incentive (e.g. adopting a single application process; developing a single programme database; reviewing the two-agency delivery model; and streamlining compliance review and findings processes) and additional resourcing that may be required to implement such enhancements. To improve transparency, the Government should also publish the names of companies claiming the R&D Tax Incentive and the amounts of R&D expenditure claimed (Sections 5.1-5.5, p. 45).This is in line with the IRU’s recommendation for an efficient user-friendly application process.

Further information can be obtained here: https://www.business.gov.au/Assistance/Research-and-Development-Tax-Incentive/Review-of-the-RandD-Tax-Incentive

Read the full IRU response below.