Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

Can I indicate that the opposition will be supporting the Greens' amendment. I want to say a few things about the minister's statements. He is sorely testing the patience of this chamber, given how extraordinarily poorly briefed he is on these matters. These particular measures that the Greens have spoken of in regard to the quarterly credits were introduced by the previous Labor government from 1 January as part of negotiations with the Greens and the independent members of the parliament in the legislation to implement the tax incentive. The quarterly credits approach was recommended by the review of the National Innovation System. The quarterly credits were introduced by the 2013 measures bill—a bill which included other measures that the minister has referred to but which, of course, were not passed by the parliament at the time. The R&D quarterly credits received strong support from business stakeholders, particularly small and medium sized firms and from the biotech sector. AusBiotech indicated that companies had already factored in R&D quarterly credits in their R&D and financial planning, based on the 1 January 2014 start-up dates.

Specific proposals were built into the act in terms of Innovations Australia's capacity to monitor these measures, and a reference committee to ensure the appropriate application of these matters. These are steps that this government has abolished—just as they have sought to abolish the plan for Australian jobs and related savings measures. These are, of course, an integral part of the actions the previous government took on these questions which related to the funding arrangements for a transfer of resources on R&D to those jobs programs—programs which this government has abolished. It is on that basis that the opposition has walked away from those announcements. If we were introducing measures to fund responsible actions to defend Australian jobs and to defend manufacturing, then of course you would have a reasonable expectation. If this government implemented the same measures for the same purposes, of course we would support them. But this is a government that has lied through its teeth about everything it has done before it was elected and after it was elected.

The Labor government's R&D tax measures were introduced after extensive consultations, and provided a 45 per cent refundable R&D tax offset for small and medium sized enterprises and a 40 per cent non-refundable R&D tax offset for other eligible companies. The new data, which came in after these measures, indicated that there had been a significant expansion in the number of firms that were actually undertaking R&D in this country. And as of 30 June 2014, 11,936 companies had registered some $19 billion of R&D expenditure. That was a substantial increase on the level of R&D activity, despite the fact that we tightened up the definitions quite dramatically. There was an additional 2,700 companies that were new to the program, and 74 per cent of the registrations received in 2012-13 were companies with an aggregate turnover of less than $20 million. They were particularly in the services sector, but 33 per cent were in manufacturing and nine per cent were in mining, which is an important component of how the R&D taxation concession system works.

We are supporting this proposal that Senator Milne has advanced today because it is consistent with the original intent of the bill. The minister has just told this chamber that we had overly generous taxation arrangements—'overly generous' were the words he used. Minister, how do the taxation arrangements in the current regime compare with our international competitors in the Asia-Pacific region and in Europe? Minister, tell us that.