The Government today received the crossbench Senators support for the R&D Tax Credit Scheme which means the scheme will commence from 1 July 2011.  The $1.8 billion R&D Tax Credit Scheme will deliver more funding to innovative firms – including manufacturers, ICT and biotech – increasing productivity and Australia’s national income. The new and improved Credit will target more funds to genuine R&D deserving of public support.  The scheme will deliver a 45 per cent refundable tax credit to companies with an aggregated turnover of less than $20 million and a 40 per cent non-refundable offset to all others. This will allow more firms to benefit from innovation, science and research helping them grasp the opportunities of our transition to a cleaner economy.

Following discussions with the Greens, the Government will introduce quarterly payments for small and medium businesses from 1 January 2014. These firms will get their credit sooner, significantly improving their cash flow and incentive to invest in R&D.  The deferral of the start date to 1 July 2011 has an overall impact of $40 million, with a negative impact of $310 million in 2011-12 and a positive impact in 2012-13 of $270 million.

The Government will continue to work in partnership with the business community to get the most from this landmark reform. An advisory group will be established through the Innovation Australia Board to monitor the implementation and operation of the Credit. The Government, through AusIndustry, will run an extensive education program to ensure firms are kept up to date.