Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Hansard source

I thank Senator Cameron for the question and acknowledge his longstanding interest in these issues. The research and development tax credit is the most important reform to Australian business innovation support in a generation, and I am sure that Senator Fielding and Senator Xenophon would appreciate that it is essentially critical to small business.

It is not often that I applaud the judgment of the Australian Financial Review, but this morning’s headline says it all: ‘SMEs win in new R&D tax breaks plan’. There will be a 45 per cent refundable tax credit for companies turning over less than $20 million and a 40 per cent non-refundable tax credit for all other companies. The 45 per cent credit doubles the base rate of support available to small- and medium-sized enterprises from 7½c in the dollar to 15c in the dollar. That is equivalent to a 150 per cent tax concession. The 40 per cent non-refundable tax offset raises the base rate for large companies by a third, from 7½c to 10c in the dollar. It is equivalent to a 133 per cent tax concession. Small, innovative firms are big winners from the new R&D tax credit. They will enjoy more generous rates of assistance and better access to cash refunds for their R&D expenditure, and under the present arrangements a company in tax loss turning over $10 million and spending $1 million on eligible R&D might eventually receive a tax deduction of $375,000 when it turns a profit. Under the new scheme— (Time expired)