Australian small and medium-sized businesses have received about $500 million in direct payments during the first six months of the Gillard Labor government's new Research and Development Tax Incentive.
Under the new program, smaller businesses with a turnover of less than $20 million a year engaged in eligible research and development can receive a 45 per cent refundable tax offset.
For those companies in tax loss, this means they will receive a full refund of their offset amount.
More than 1500 smaller businesses across a range of industries have received a significant boost to their cash flow to support investment in eligible research and development activities.
We have seen smaller businesses receive refundable offsets of up to $22 million. This is having a positive impact on these businesses.
The Research and Development Tax Incentive is designed to boost the amount of research and development being undertaken, particularly by small and medium sized firms.
By making cash refunds available for firms that have undertaken eligible research and development and are in tax loss, we are helping offset some of the costs of innovating.
Under the old policy, only businesses with a turnover of less than $5 million could receive refunds and only for expenditure of up to $2 million. The new scheme is more generous and small businesses are taking advantage of this.
Innovative research and development worth almost $2 billion has been registered by businesses since the new tax incentive commenced. Already this financial year, more than 2100 businesses have registered activity under the program.
Investing in research and development boosts business competitiveness and productivity, and can help create high-skill, high-wage jobs.
The response to the program has been very positive and registrations have been received from businesses across a broad range of sectors. For example, more than 750 manufacturers have already registered expenditure worth $477 million.
AusIndustry is continuing to run workshops to help small and medium enterprises, first-time registrants and smaller consultants or tax agents better understand and register for the Research and Development Tax Incentive.
Details of workshops and other guidance materials are available at ausindustry.gov.au or through the hotline 13 28 46.
Businesses which undertook eligible research and development in the 2011-12 financial year have until April 30 to register their activities with AusIndustry.
Greg Combet
Minister for Industry and Innovation