For those lucky enough to have made it back to the cinema, the main offering has been Christopher Nolan’s latest magnum opus, “Tenet”. It’s not a spoiler to say that there are several shots throughout the movie displaying time moving forwards and backwards on the same screen. And, we were eerily reminded of that idea during this exchange between Prime Minister Scott Morrison and the Sydney Morning Herald’s David Crowe at the Prime Minister’s National Press Club Address yesterday following the announcement of the Federal Government’s $1.5 billion Modern Manufacturing Strategy.
DAVID CROWE: Thank you Sabra. David Crowe from the Sydney Morning Herald and The Age. Thanks for your speech, Prime Minister. You mentioned research and development several times during your speech. Before the Senate at the moment, the government has a bill that changes taxation on R&D, saves money. One of the critics of that bill is a company called ResMed, which of course has made a big contribution this year by making ventilators.
PRIME MINISTER: True.
CROWE: At the moment, you seem to be spending $1.5 billion on manufacturing, at the same time you save $1. 8 billion on R&D tax concessions. Does that make sense? Are you open to rethinking the R&D tax changes so that you can actually encourage more research and development?
PRIME MINISTER: We certainly want to encourage more research and development. And our answer to that question will be delivered by the Treasurer next Tuesday night.
CROWE: So there will be more in the Budget?
PRIME MINISTER: His answer will be to that question in the Budget next Tuesday night.
CROWE: Can I have a third question?
LANE: That is very cheeky.
CROWE: Can you offer any more guidance as to what kind of changes you are thinking about?
LANE: Goodness gracious.
PRIME MINISTER: The Budget speech starts soon after 7:00pm.
Can we simply say, bring on Tuesday night!
Followers of the MJA Update will be more than aware that the cuts described by David Crowe have been fermenting for five years, ever since the former Prime Minister, Malcolm Turnbull, announced a review of the R&D Tax Incentive in his National Science and Innovation Agenda. The latest Senate Economics Legislation Committee report on the second version of the Bill is due a few days after the Budget Speech.
There is speculation that the Government will pursue the cuts. This would be a huge step backward at the exact time the Government is attempting to take the innovation economy forward. Their own version of “Tenet”.
But is there hope in the Prime Minister’s comment that the Government certainly wants to encourage more research and development? Every submission regarding the Bill said that it did the opposite so the Government sticking with the Bill in its current form no longer seems tenable. And, Phillip Coorey in today’s AFR, has suggested that the “government is set to reverse its plans to cut the research and development tax incentive in recognition it will be needed to bolster advanced manufacturing in the wake of the COVID-19 recession”.
Looks like we have ourselves a good old-fashioned cliffhanger!
MJA will publish the outcome in our next MJA Update next Tuesday night. Bring your popcorn.
And Have Your Say…Kinda
The Federal Government has announced a two week (yes, two weeks only!) window for stakeholders to express their views on matters regarding the R&D Tax Incentive including ease of access, guidance material, claim experiences and audit experiences.
We would encourage you to respond. You will need to allow 15-20 minutes to complete the survey.
Unsurprisingly, there are no questions about the impacts of the outstanding Bill and the survey closes on 11 October, the very day before the Senate Economics Legislation Committee delivers its report on the beleaguered Bill.
Nonetheless, the feedback from the survey will hopefully contribute to the improved program delivery we have been experiencing in recent times.
Should you wish to discuss this matter further, please do not hesitate to contact Kris Gale on 02 9810 7211 or email firstname.lastname@example.org
MJA updates keep you informed on how government decisions will effect your business. This is a must if you want to know the latest on business and company insights without having to read and decipher complicated law and tax manuscripts.