LABOR TELLS MINING INDUSTRY: INNOVATION MUST BE PUNISHED

02-November-2011

Labor’s demonisation of the mining industry’s use of research and development (R&D) tax incentives shows the depths to which its arguments for a mining tax have sunk. 

A media report today indicates ‘government sources’ and Treasurer Wayne Swan are now trying to cite miners’ increasing use of incentives for R&D investment (especially in relation to other industries) as a reason why they should be punished with a sector-crushing tax.   

These claims portray either a bewildering misunderstanding or a cynical distortion of the operation of the R&D tax system. 

As it is an entitlement-based system rather than one based on competition for grants, no firm’s or industry’s qualification for the R&D incentives has the slightest impact on any other business or sector. These claims also ignore the obvious point that further R&D investment provides multiple spinoffs for the entire economy, rather than serving as something that should be punished or clawed back.
 
Also conveniently overlooked is the notion that, from 1 July 2011, the Government has already fundamentally changed the system to significantly reduce the mining industry’s share of R&D tax assistance in any case. 

“This bizarre belittling of the importance of R&D investment and the selective manipulation and presentation of data continues a long pattern of Government double-speak and deception on R&D tax incentives,” said Shadow Industry Minister Sophie Mirabella.
 
“A Government that has already pretended that its new, so-called ‘R&D Tax Incentive’ program provides more generous spending on R&D when it actually does the opposite is now spreading further gibberish.   

“At a time when almost every industry in Australia is pointing out that increased spending on business R&D is critical to our future, it is an ignorant government that would not only refuse to listen but continue to bully anyone who shares that view.”