IT’S TIME TO STOP THE BULLYING AND START LISTENING TO INDUSTRY

27-September-2010

Labor should immediately scrap its plans to cut incentives to research and development (R&D) activity in Australia.

It has been reported today that industry groups and tax advisers are urging a rethink from the Government as it stubbornly prepares this week to re-introduce legislation that has attracted widespread condemnation and anger within the business community.

“Labor is trying to substantially restrict the eligibility criteria for government support of R&D. This is precisely the wrong message for a Government to be sending about business innovation,” said Shadow Industry Minister Sophie Mirabella.

“Labor’s attempt to retrospectively introduce the legislation is unfair and unjustifiable.”

The position of the Government (and its Industry Minister, Kim Carr) has also been severely compromised by the release late last week of figures showing a 13 per cent increase in R&D spending by business during 2008-09 under the existing legislative regime. The statistics also indicate that the largest contributor to R&D spending is manufacturing, which is likely to be the sector most adversely affected by Labor’s new laws. (Source: ABS, 8104.0 - Research and Experimental Development, Businesses, Australia, 2008-09.)

“It’s a measure of the complete misunderstanding and confusion that is gripping Mr Carr that he chose to celebrate these figures at the same time as he is calling for an overhaul of the R&D tax system.

“He seems to have absolutely no idea that what he was effectively doing was spruiking the success of the existing legislation at the very same time as he is trying to radically weaken it.

“He is either blissfully ignorant of the importance of R&D in Australia or genuinely has no idea of the serious damage his new legislation will inflict. Or, quite possibly, both.”