Tony Smith (Casey, Liberal Party, Deputy Chairman , Coalition Policy Development Committee) Share this | Hansard source

I rise to speak on the Tax Laws Amendment (Research and Development) Bill 2010 and cognate bill, following the member for Kooyong, who outlined in great detail the fundamental problem with the Labor Party’s approach to this critical area of R&D. The decisions in this key economic area directly impact the sorts of opportunities businesses and Australians will have tomorrow. As the member for Kooyong outlined, there are a series of obvious flaws within this legislation. As previous speakers on this side of the House, led by the member for Indi and followed by the member for Bradfield, have said, concerns have been outlined time and time again by experts within the industry. The member for Indi spoke in great detail about how this legislation and Labor’s approach have unfolded over the last couple of years. The member for Bradfield gave example after example of those involved in the critical area of R&D, experts from accounting firms and experts from the business sector, who have been warning this government for months and months—warnings that have unfortunately fallen on deaf ears.

On behalf of the coalition, the member for Indi outlined our approach and moved a series of amendments to try and rectify this bill to ensure it is the best it can be. If the government were not so stubborn and the Minister for Innovation, Industry, Science and Research, Senator Carr, were not taking a ‘crash or crash through’ approach, you would hope that those opposite could comprehend that they have not got this right, that their approach will damage and R&D in Australia.

Let me reiterate, as the member for Kooyong did in great detail, that there are aspects of this legislation—as the member for Indi outlined in her speech on the second reading—with which the coalition does not have a problem. These include changes to shift from concessions to credits, the relaxation of foreign ownership rules relating to IP and, as she outlined, the idea of encouraging more blue sky exploratory research and giving increased support for small- and medium-sized enterprises in Australia. As the member for Indi, the member for Bradfield and the member for Kooyong outlined, these objectives are, of course, reasonable and the coalition has never had issue with them. This is despite, unfortunately, the government’s attempts over and over again to try and misrepresent the position and assert otherwise.

The criticisms from this side of the House are many and go to what sort of system will replace the existing system and what its defects are. The member for Indi has been quite upfront and said, ‘We acknowledge, accept and support some of the key objectives.’ But it is in those areas that she and the member for Kooyong outlined where we know from the experts from the Senate inquiry and from everyone who has been working within the R&D system that the restrictions in so many other areas within this bill will be detrimental to R&D and therefore detrimental to the business sector in Australia and ultimately, of course, to our longer term economic performance.

As the member for Indi outlined in great detail in speaking to the amendments that she moved, the legislation is defective in a number of critical ways. It will restrict the range of activities that qualify for support by introducing, as she said, ‘regressive new definitions of core and supporting R&D’. The member for Kooyong outlined some of those consequences as well. It will alter eligibility criteria so that supporting R&D will only be funded if it satisfies a confusing and complex dominant-purpose test.

There are many more defects that the member for Indi has outlined. I have just picked a sample of them. These have been raised with the minister time and time again. Unfortunately, the minister’s response at every opportunity has been to attack those who try to shine a light on the deficiencies of his approach. As the member for Kooyong pointed out, there has been a bipartisan approach to this important area for 25 years. When those who are experts in the field raise criticisms, we on this side of the House say, ‘If the minister is so small-minded that he cannot accept a criticism or a suggestion from this side of the House, well, fine, listen to those outside of the House who are experts in the field.’ Unfortunately, the minister has refused to do that at every turn. Whenever he has had the opportunity he has criticised those who have deigned to point out the faults with his legislation.

Like so many policies that the Labor Party seeks to introduce, this has the classic three pillars of chaos, uncertainty and confusion. I notice my friend the member for Flinders, who has exposed them on ceiling insulation, is in the chamber. It is not too late for the government to actually listen; they should listen to the member for Indi. The amendments that she has moved on behalf of the coalition are amendments on behalf of those who know the absolute importance—

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