Hello, Mariah? Are You Out There?? Here Are Our Christmas Wishes For R&D

December 22, 2020 Kris Gale

So we’ll admit to being a bit greedier that Mariah Carey who apparently only wants “you” for Christmas. 

Coming off the great news in the October Budget that shored up the value of the RDTI for the 2021/22 year and beyond, MJA would like the Government to look at the following options to be placed under the R&D Christmas tree on Thursday night.

Relaunch the RDTI

There is a wonderful opportunity for the Federal Government to use the new R&D Tax law applicable from 1 July 2021 to relaunch the program and restore its profile as the Government’s flagship mechanism to support R&D and innovation.

As we have discussed so often in the MJA Update, the RDTI has been poorly treated in the 2014-2019 period but the 2020 Budget did a 180 degree turn and has strengthened the RDTI from next July.

The problem remains that the public persona of the program is still one of considerable worry and concern including aspects of the 2020 Bill that were passed without debate such as the increased delegation powers of the ISA Board and the ‘name and fame’ provisions that makes public the amount claimed by every company in the program.

A high profile relaunch campaign of the RDTI around its benefits, access and useability in the lead up to 1 July would be outstanding and should include a review of some of the more contentious aspects of the program. 

Simplify the Software Eligibility Guidance via a Consultative Process

The recent release of the refreshed Guide To Interpretation has been most welcome and has been seen as a positive contribution to the publicly-available information regarding the RDTI. 

However, when you delve more deeply, a number of shortcomings remain, particularly with respect to the hot topic of eligible software development. 

For examples, if you go to the business.gov.au website, you will find three documents entitled as follows:

•    Getting software development R&D Tax Incentive claims right
•    Guide to common errors
•    Software activities and the R&D Tax Incentive

Here are three inconsistent documents regarding the most controversial aspect of the RDTI that overlap in content and are bereft of examples.

The tech sector would gain huge confidence in the program if this could be sorted by consolidating these documents into one coherent, accurate and useful repository of information.

The RDTI Roundtable’s Terms Of Reference allows for the formation of working groups to address matters such as these. 

MJA is a foundation member of the Roundtable and has been seeking the establishment of a working group on software R&D for almost two years. 

To get a working group in place in early 2021 would be a gift that would be most gratefully received.

Introduce Grants for R&D

And you should always have an aspirational item on your list for Santa. A “Can I pleased have a pony?” type of request.

From the early 80s to 2008, the Federal Government provided competitive matching grants to organisations to help fund meritorious R&D projects. These were shut down overnight midway through the Cutler Innovation Review and there has been a distinct absence of R&D grant funding ever since.

The current level of competitive funding offered in the Accelerating Commercialisation grants program is welcome but somewhat anaemic and tackles a distinct fact set from R&D/innovation matters.

A competitive grants element to fund R&D is a recurrent feature of many government ecosystems and addresses a different and complementary area of the innovation landscape.

The contribution that strategic step change R&D projects can make has been more than borne out by the pandemic. It is a perfect time to re-introduce a competitive grants program for R&D.

Giddy Up!

And, Finally…

MJA is privileged to work in the area of Australian government support for Australian innovation and we would look forward to 2021 with great optimism and enthusiasm.

To our clients, our partners and our colleagues in government, we wish everyone a truly safe and joyous Christmas season!

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