Luke Simpkins (Cowan, Liberal Party) Share this | Hansard source

I welcome the opportunity to make a contribution to the debate on the Tax Laws Amendment (Research and Development) Bill 2010, as late as it is in the process. I have found it very interesting listening to previous speakers on matters concerning the bill, including the discussion about which side of politics has been best for research and development and what the future holds. Within the electorate of Cowan, there has been a great history of local businesses taking up the advantages that research and development assistance can provide. I would like to mention a couple of the businesses that have done particularly good research. Tieline Technology, a small but greatly effective business within the electorate of Cowan, have taken advantage of research and development grants under the previous government—before 2007. Tieline have a very high-tech business in which they produce circuit boards. They do not have many employees but they do great work in producing many fine electronic items.

I heard a previous speaker talk about who was the originator of the R&D grants, but certainly the Howard government had a great history in supporting research and development, and Tieline has been a beneficiary of that. There are also other great businesses, such as PalmTEQ, which produce Palm Pilots for restaurants. For instance, a waiter can come up to you at a restaurant to take your order and, just by tapping away on their palm tech device, they can send that order straight to the kitchen. PalmTEQ is another organisation that is very involved in research and development. It is located within Wangara, which is part of the Cowan electorate. There has certainly been great interest in research and development in Cowan in the past, and these organisations have taken part in those government incentives.

From the coalition’s perspective, we are happy to support sensible changes to research and development tax incentives which are an improvement to the existing system and where the benefits are clearly apparent. There is no doubt that there is bipartisan support on both sides of the House for research and development. But what is being proposed today is, I think, an alteration to a system that has existed for 25 years. The question that we must ask is: will the government’s proposal add any great value? The changes may be sweeping but they certainly pose a threat that could significantly erode support for research and development in Australia.

Key changes involved in the legislation go to significant redefinitions of the type of R&D activities that will be eligible for support. Again, this is cause for some concern. I note that Labor have introduced new categories of what they call ‘core’ and ‘supporting R&D’ and a ‘dominant purpose test’. Our view is that they could combine to significantly increase the threshold for firms to qualify for assistance—and that is a worry to us. In essence, companies must demonstrate that their activities are novel or have high-technical risk. Under the proposed system, Labor would fund firms only in cases where they can show that they have introduced a whole new technique, process or solution. It is at times like this that you begin to worry about whether this legislation is actually going to achieve great improvement. Added technicalities or added hurdles for firms to jump over can be a bit of a problem, and we wonder whether that will add great value in the future.

As I said, organisations within the electorate of Cowan have been strongly involved in research and development. Organisations such as Tieline and PalmTEQ and others of the same ilk pride themselves on finding where the demand is and trying to reach higher technological processes to seek market share. These are the sorts of companies that we should be looking to support in the future. These companies are not made of money. They do not have many employees to assist in fathoming changes such as those before us. What is really required is that the opportunity to access R&D development support be held out to firms, without it being too onerous on them. Again, we must be very careful in making changes to a system that has been fundamentally sound and has not had great problems associated with it in the past.

I notice as well that a previous speaker suggested the amount of money that could be assessed under these grant schemes would be the same. I would have thought that, to push forward research and development, the Minister for Innovation, Industry, Science and Research, Senator Carr, would be looking to make significantly more money available, particularly with all these other criteria that have been thrown together.

We are in support of the eight separate amendments that the shadow minister has put forward. The purpose of the amendments is to overturn the worst of the Labor changes such as the regressive nature of the definitions that have been put forward as part of this bill—that dominant purpose test and the adjustments to the feedstock provisions. These are things that need to be amended. In looking at the research and development changes or legislation, the coalition will always support any sensible and logical improvements to the existing regime and things that would not compromise the integrity of the existing system. That is obviously what we are trying to achieve here with the amendments that have been put forward by the member for Indi, the shadow minister.

Labor has tried to pretend that it is interested in improvements to the existing system but this is really nothing more than window dressing—lip service, if you will. If the government were interested in significant and realistic improvements to the R&D process and system, they would not have any problems with accepting the amendments that have been put forward today. This is a critical test for the government. There has been discussion in the past about how the new paradigm—this new 43rd parliament—would lift the lid off the building and sunlight would shine in, but this is just another example of where the government has decided on a particular course of action. They are not particularly interested in scrutiny and not particularly interested in looking at amendments that have not been put forward by the Greens, who increasingly seem to be running the agenda these days in this place.

One person in particular in this place seems to be so powerful. It is very disappointing. Whenever we look at the bills that the government is putting forward in this place, often it seems they are not really moving things forward in the right direction. It seems to be a constant matter of if the Greens have ticked off on this and if the Independent members in the House will support it. That seems to be the only consideration these days. The government still has an opportunity to bring forward into this place bills that are going to add some value and are going to constitute some form of positive outcome for this country. Increasingly, all we see is a government that is beholden to very narrow interests and without real commitment to what is in the best interests of, in this case, business in this country—the employers of this country, people that are going to add some real value—instead of what is becoming more and more obvious, a government that is just beholden to narrow interests that will ask the views of four or five people in this place and respond to those as opposed to what might be in the best interests of the people out there.

What greatly concerns me about these sorts of changes is they are going past what is in the best interests of organisations that are achieving great things for employment within the electorate of Cowan, in light industrial suburbs such as Wangara or Malaga, and just working out the opinions of those who sit on the crossbenches. It is disappointing. I think people and businesses in Australia that are interested in research and development will get to the point where they recall what was said by us in the last election campaign—that we would make no changes to the existing R&D concession system until at least 1 July 2011. Then they will look at this system that the government is proposing—complicated business, dominant purpose feedstock rules, increased compliance requirements—and they will see very easily the significant differences between the simplicity and achievements of the past—what we were offering at the last federal election and what the government brings before us today.

Causes for concern are many. Amendments, therefore, are many. I take this opportunity to state my overwhelming support for the amendments that have been put forward by the member for Indi. I urge the government, if it believes in what it said about visibility and lifting the lid, to give very careful consideration to them to make sure that they do not send R&D backwards in this country and instead take the opportunity to represent businesses in the electorate of Cowan and across the country interested in research and development. The government should listen to us and support these amendments to make sure of the best interests of the broad variety of businesses interested in research and development, as opposed to what the crossbenchers—who increasingly are calling the shots for the government—are interested in.

In summary, I am taking this opportunity today to speak on this bill and the great value that these amendments that have been put forward will achieve. We should be very careful before we change the arrangements for research and development in this country. I support the amendments and the need for this bill to change in that manner.

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