Geoff Prosser (Forrest, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Minister for Industry, Tourism and Resources. Would the minister outline to the House the government’s efforts to support business innovation and competitiveness in Australian industry.

Ian Macfarlane (Groom, Liberal Party, Minister for Industry, Tourism and Resources) Share this | Link to this | Hansard source

I thank the member for Forrest for his question and lament his recent announcement that he will not be joining us again in this place after the next election. He has made a fine contribution on behalf of Western Australia, particularly in the resources area.

The cornerstone of the Howard government’s support of business innovation is very much the R&D tax concession program, a market driven program that responds directly to the needs of industry. We now have almost 6,000 Australian businesses, 90 per cent of them SMEs, registered for the concession. That is an increase of some 52 per cent in the last five years. That is no accident, and it is also no accident that business expenditure now is at record levels, reaching $7.2 billion in 2004 according to the latest ABS study.

Innovation is a critical part of our competitiveness for Australian industry. As I go around Australia as part of my preparation for the industry statement I will be discussing the issue of how we can further assist industry with innovation. Our international competitors are not standing still in this area, and neither can we. If we want to talk about people standing still, there is the opportunity to consider what is happening on the other side of this chamber in terms of policies or attempted policies that have recently been raised by the Leader of the Opposition. In raising for the Labor Party what he called the Innovation Blueprint, the Leader of the Opposition said that he was very attracted to the scrapping of the R&D concession in favour of loans and grant schemes.

Judging by the reaction from industry, people there are not quite so sure that the Leader of the Opposition has any idea about innovation. In fact, some of the responses that we received, particularly from industry bodies, are worth recalling. The AiG’s Heather Ridout said that the proposal would mean that ‘a board—or the government for that matter—decides what programs get up, but that under a tax concession it is a market driven scheme, which is far more accessible’. The Federation of Australian Scientific and Technological Societies said that scrapping of the tax concession would do ‘more damage than good’. And R&D tax experts from firms like KPMG and PwC describe the proposal as ‘retrograde’, ‘unfortunate’, sending the ‘wrong message’, creating a ‘grant mentality amongst companies’, ‘picking winners’ and being ‘costly and time consuming’.

What we have here is obvious opposition from industry but obvious lack of understanding of innovation and innovation policy by the Leader of the Opposition. It is no coincidence then that he has gone completely silent on this area as his reheated ‘noodle nation’ becomes limp and soggy. It was a poor attempt at policy which exposed the Leader of the Opposition for not only being a weak leader but also having no idea on innovation, no idea on industry and no idea to help either.