Appointment Of New Minister – A Chance For The Innovation Economy To Start Afresh

August 27, 2018 Kris Gale

With the appointment of a new Prime Minister, Scott Morrison, the Federal Government has reworked its Ministries and their accompanying Ministers.

MJA welcomes Karen Andrews to the new portfolio of Minister for Industry, Science and Technology. Minister Andrews seems ideally suited to the position. She has a Bachelor of Mechanical Engineering and has worked in the areas of plant design and maintenance for power stations, chemical and petrochemical sites. The local member for the Gold Coast, the Minister has served as Assistant Minister for Science for periods in the Abbott and Turnbull Governments.

There are widespread hopes that Minister Andrews’ appointment will provide a chance for the Government to revisit the innovation issue. Previously, the role was occupied by Michaelia Cash under the title of Minister for Jobs And Innovation. MJA welcomes the alignment of the new ministerial role with the Department (formerly called Industry, Innovation and Science) but wonders aloud about the removal of Innovation from the title for the second time since the Coalition returned to power in 2013.

The responsibilities of the Government to the innovation issue were highlighted by an article in the Fairfax press on the weekend where several tech leaders were highly critical of the Government’s track record on innovation: https://www.smh.com.au/technology/tech-leaders-say-wishy-washy-politicians-are-failing-australia-20180824-p4zzli.html
And, there have been very pointed criticisms with respect to the proposed changes to the R&D Tax Incentive in particular.

Daniel Petre, formerly of Microsoft and now running AirTree Ventures, has been more than blunt in expressing his opinions. Speaking at the recent Australian Financial Review Innovation Summit, Petre said that the Government shouldn’t “f__k up” the R&D Tax Incentive program. He went on to say, “My request to government is just to leave it alone…They need to understand this is helping fuel a massive innovation system…They shouldn’t take $200 million out of R&D and put it into general surplus… it was mind-numbingly stupid.”

Minister Andrews has the opportunity to take heed of Petre’s request by paying close attention to the current draft legislation that seeks to introduce sweeping changes to the R&D Tax Incentive, in particular, the Non-Refundable R&D Tax Offset. MJA’s concerns have been laid out in detail in recent MJA Updates. They amount to a fear that the package will legislate a precipitous fall in Australia’s Business Expenditure on Research & Development (BERD). We believe that these fears have been echoed in the vast majority of submissions made in response to the Treasury’s draft legislation. However, to the best of our knowledge, these submissions have still not been made available for public scrutiny. This is in spite of the fact that the close date was 26 July 2018.

Let’s hope that the political changes have ushered in a new start of a period of genuine consultation where sensible innovation policies are transparently designed and delivered.

Should you wish to discuss this matter further, please do not hesitate to contact Kris Gale on 02 9810 7211 or email kris.gale@mjassociates.com.au