The Ambitious Australia report, released 17 March 2026, proposes the most far-reaching restructure of the R&DTI since it replaced the R&D Tax Concession in 2011.
The independent Strategic Examination of Research and Development (SERD) panel, chaired by Robyn Denholm, released its final report “Ambitious Australia” on 17 March 2026.
The panel was commissioned in December 2024 to conduct a system-wide review of how Australia funds research, development, and innovation (RD&I). Its final report delivers 20 recommendations structured across six reform pillars.
The Australian Government has not yet issued a formal response. The 2026-27 Federal Budget is the most likely vehicle for the first wave of RDTI reform 2026 announcements. The Federal Budget is scheduled for 12 May 2026.
Why It Matters
R&D investment in Australia has been in a sustained decline relative to OECD peers. The panel’s own data is direct:
- In 2002, GDP per person was projected to grow 90% over 40 years.
- By 2023, that projection had fallen to 57%.
The report names this shortfall as a structural risk to the living standards of future Australians, not a passing policy concern.
For context, the current R&D Tax Incentive (R&DTI) replaced the R&D Tax Concession in 2011, a reform that itself took years to settle into practice. The SERD report’s proposed changes are of comparable scale, and in some areas go further. The shift from a single-rate scheme to a tiered, growth-linked, mission-oriented structure is not an incremental update. It is a redesign.
For founders, CFOs, and investors with R&D programs in flight, this is not a “wait and see” situation. The rules governing your current claims remain in place until legislation changes. Preparation, however, starts now.
The Details: Four Proposed Changes Businesses Need to Track
1. A Premium Stream for Startups (Faster Cash, Broader Scope)
Recommendation 5b proposes a dedicated Premium Startup Stream within the R&DTI. This stream is designed to address the cash-flow pressure that makes the current scheme impractical for early-stage companies.
- Refundable offset rate: corporate tax rate plus 23.5%
- Quarterly cash advances based on business activity statements (BAS)
- Eligibility determined by a simplified 100-point test. Indicators include secured venture capital, accelerator participation, IP registration, and university collaboration
- Eligible expenditure expanded to cover development, deployment, early commercialisation, user testing, and adoption. A direct acknowledgement that software and digital health innovation do not fit the legacy laboratory definition
- Access window: generally three years, extendable for deep-tech firms with longer development cycles
What remains unclear is precisely how the 100-point test will be weighted and whether the ATO or AusIndustry will be the primary administrator. Both matters will affect how you structure your eligibility evidence.
2. SME Growth Stream (Raised Threshold, Growth-Linked Access)
Recommendation 5c lifts the aggregated turnover threshold for the refundable offset from $20 million to $50 million. This brings a broader cohort of scaling companies into the refundable component, but access is conditional.
- Companies must demonstrate average annual revenue growth of at least 5% above CPI over the preceding three years
- A three-year on-ramp gives new entrants time to establish their growth trajectory
- An off-ramp applies if a company misses growth targets for two consecutive years
The growth-linkage is the substantive policy shift here. A business that has been claiming the refundable offset at $20–50M turnover under current rules will need to actively assess whether its revenue trajectory qualifies under the new test.
3. R&D Collaboration Vouchers (A New $150,000 Grant Pathway)
Recommendation 6 introduces a standalone R&D Collaboration Voucher program. These SERD report grants are specifically designed for businesses that will not meet the tightened R&DTI eligibility criteria, particularly lower-growth SMEs.
- Maximum grant: $150,000 per project
- Funding purpose: direct access to a university or a publicly funded research agency (PFRA) capability
- Target cohort: manufacturers, agritech, health-tech, and any SME that needs a proof-of-concept but does not yet meet R&DTI thresholds
The design of the voucher administration process, whether applications will be assessed by merit, round-based, or on a continuous basis, has not been specified in the report. This is a detail that will matter significantly to cash-constrained businesses planning their R&D pipeline.
4. Large Corporations (Cap Removed, New Obligations Attached)
Recommendation 5d proposes changes to make Australia internationally competitive for large corporate and multinational R&D investment.
- The $150 million cap on eligible R&D expenditure would be abolished
- The current tiered intensity measure would be replaced with a standard, globally competitive offset rate
- Enhanced benefits are conditional on a points-based “corporate citizen” test, rewarding first contracts with Australian startups, local procurement, university collaborations, and PhD supervision
- The R&DTI offset would be excluded from franking credit calculations, removing a known disincentive for large-firm R&D investment in Australia
For SMEs and startups, the corporate citizen test creates a commercial opportunity. Large corporates now have a tax reason to contract with, invest in, or collaborate with RDTI-active Australian businesses.
|
Reform Pillar |
Proposed Recommendation |
Target Sector |
Proposed Governance/Action |
Key Objective |
|---|---|---|---|---|
|
Focus and Scale |
Establish a National Innovation Council (NIC) and six National Innovation Pillars supported by National Strategy Advisory Councils (NSACs). |
Government, Industry, and Academia |
Chaired by an eminent Australian reporting to the Prime Minister, NSACs to report to portfolio Ministers and collaborate with the NIC. |
Oversee and coordinate Commonwealth RD&I funding and establish long-term aspirational goals for high-impact challenges. |
|
Focus and Scale |
Concentrate public investment through National Strategic Initiatives (NSIs). |
Startups, SMEs, Large Businesses, and Researchers |
Competitive selection for consortia requiring at least 50% cash investment from partners; it involves state and territory governments. |
Drive a seismic change in RD&I activity and accelerate translation and commercialisation. |
|
RD&I Business Incentives |
Reform the R&D Tax Incentive (RDTI) to simplify administration, introduce a startup stream, and increase SME turnover thresholds. |
Startups, SMEs, and High-growth firms |
Simplify access via a 100-point style test; increase refundable offset threshold from $20 million to $50 million; enable quarterly payments. |
Provide streamlined support for high-potential firms and encourage SMEs to reinvest in R&D during scaling. |
|
RD&I Business Incentives |
Provide production tax credits or subsidies for advanced manufacturing. |
Advanced Manufacturing |
Government to design credits for local manufacturing resulting from domestic RD&I activities. |
Retain high-value manufacturing in Australia and support the transition to a knowledge-based economy. |
|
Creating Knowledge |
Reverse the real-term decline in foundational research funding and fully fund indirect research costs. |
Universities and Research Institutes |
Index ARC and NHMRC grants starting in 2026; mechanism implemented by NIC and the Australian Tertiary Education Commission (ATEC). |
Protect sovereign capability and sustain the quality of the research system. |
|
Creating Knowledge |
Allow universities to achieve research specialisation. |
Universities |
Reform registration requirements (provider category standards) to reduce research breadth conditions. |
Enable universities to build scale in areas of competitive advantage rather than spreading resources thinly. |
|
Investment and Capital |
Unlock patient capital and establish Fund-of-Funds (FOF) investment vehicles. |
Superannuation funds and Venture Capital |
Reform ASIC Regulatory Guide 97 (RG97) and performance tests; provide fee relief for FOF investors. |
Mobilise the $4.2 trillion superannuation pool into the innovation economy and grow long-term venture investment. |
|
Workforce |
Reform PhD training and develop a national RD&I workforce strategy. |
PhD students, Universities, and Industry |
Lift stipend rates, make part-time scholarships tax-free, and align migration systems via a NIC-led strategy. |
Strengthen the PhD pipeline and attract the talent needed to power the innovation cycle at scale. |
|
Government Leadership |
Use government procurement as a lever to drive local innovation. |
Local innovative businesses |
Implement the ‘if not, why not’ rule for local procurement; set goals via the National Cabinet. |
Prioritise Australian RD&I and reduce reliance on imported technology and international supply chains. |
|
Government Leadership |
Create a national narrative celebrating RD&I success. |
General public and International investors |
Persistently demonstrate the benefits of RD&I to the community; elevate national dialogue. |
Drive cultural change, build public confidence, and attract foreign investment. |
Current Status and Timing
The report has been released. Government consideration is underway. The 2026-27 Federal Budget on 12 May 2026 is the first formal decision point.
The current R&DTI rules remain operative until legislation changes. The 30 April 2026 registration deadline for 2024-25 R&D activities applies under the existing framework, regardless of what the budget announces.
The Business Council of Australia, the Group of Eight universities, and the Australian Academy of Science have all issued statements urging the Government to act on the recommendations as a package. Selective adoption of individual measures without the supporting architecture, particularly the National Innovation Council (NIC) and National Strategic Initiatives (NSIs), would, in the panel’s own words, produce sub-optimal results.
The minimum annual R&D expenditure floor is also proposed to rise to $150,000. If your current R&D spend sits below that figure, this threshold change warrants early attention.
Frequently Asked Questions (FAQs)
Q1. What is the SERD report, and what has it proposed for the R&D Tax Incentive?
The Strategic Examination of Research and Development (SERD) is an independent review commissioned by the Australian Government in December 2024, chaired by Robyn Denholm. Its final report, Ambitious Australia, was released on 17 March 2026 and delivers 20 recommendations to restructure how Australia funds research, development, and innovation. The centrepiece is a redesign of the R&D Tax Incentive (R&DTI) from a single-rate scheme into a tiered system linked to company size, growth stage, and national strategic priorities. The Australian Government has not yet issued a formal response, with the 2026–27 Federal Budget on 12 May 2026, the first expected decision point for RDTI reform 2026 announcements.
Q2. Does my startup qualify for the proposed Premium Startup Stream?
The proposed Premium Startup Stream replaces the existing technical R&D definition test with a simplified 100-point eligibility test using objective indicators such as secured venture capital, accelerator participation, registered IP, or active university collaboration. Qualifying startups would receive a higher refundable offset — corporate tax rate plus 23.5%, paid quarterly via business activity statements rather than at year’s end. Eligible expenditure would expand to include development, deployment, early commercialisation, and user testing, reflecting how modern software and digital health products are actually built. Access is generally capped at three years, with extensions available for deep-tech firms.
Q3. What are the new $150,000 R&D Collaboration Vouchers, and who can apply?
Recommendation 6 of the Ambitious Australia report proposes a new R&D Collaboration Voucher program offering direct grants of up to $150,000 per project. These SERD report grants are designed for businesses that will not qualify under the tightened R&DTI rules, specifically lower-growth SMEs that cannot meet the proposed revenue trajectory test. The funding covers direct access to university or publicly funded research agency (PFRA) expertise to initiate RD&I through structured collaboration. Administrative details, including whether applications will be merit-assessed on a continuous or round basis, have not yet been specified in the report.
Q4. How does the proposed SME Growth Stream change the refundable R&D tax offset threshold?
Recommendation 5c proposes lifting the aggregated turnover threshold for the refundable R&DTI offset from $20 million to $50 million, bringing more scaling companies into cash-refundable territory. Access is conditional on demonstrated average annual revenue growth of at least 5% above CPI over the preceding three years. On-ramp and off-ramp mechanisms are included, a three-year on-ramp for new entrants, and an off-ramp where a company misses the growth target for two consecutive years. The report also proposes raising the minimum annual R&D expenditure floor to $150,000 and removing the grant clawback rules that currently reduce R&DTI benefits when a company also receives a Commonwealth grant.
Q5. When will the SERD recommendations take effect, and what should businesses do now?
No legislation has been introduced, and the current R&DTI rules remain fully operative — including the 30 April 2026 registration deadline for 2024–25 R&D activities. The 12 May 2026 Federal Budget is the first formal window for the Government to signal which RDTI reform 2026 recommendations it will act on and in what timeframe. Before Budget night, businesses should map existing R&D projects against the six National Innovation Pillars, check their three-year revenue trajectory against the proposed CPI-plus-5% growth test, and review R&D documentation for audit readiness. The direction of reform is clear, even if the final design is not. Businesses that prepare now will be better placed to respond when the Budget delivers the Government’s first position.
