Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

The government is not in a position to support the Greens amendment. The Greens amendment effectively seeks to drop the original intent of this bill, which, as I indicated in the second reading debate, was actually a budget savings measure initiated and banked in the last budget of the previous Gillard Labor government and which seeks to remove access to R&D tax incentives for companies with annual aggregate assessable income of more than $20 billion a year.

The Greens are proposing a quarterly credit scheme which would allow businesses to receive tax credits for eligible R&D activities before the expenditure has actually occurred. This would introduce a number of risks, as the scheme seeks to anticipate a company's expected entitlement to a refund of the R&D refundable tax offset and requires payments to be made on the basis of an estimate. Allowing a company to receive credits for R&D expenditure before that expenditure has actually occurred would, in particular, introduce a risk of fraud and a risk of overpayment. Further, any integrity rules to reduce these risks would increase the compliance costs associated with the scheme while not eliminating the risks. The integrity rules introduced in the Greens' proposed scheme would not be sufficient to eliminate the risks, and it is likely that cases of fraud and overpayment would occur.