The Federal Government’s move to encourage small to medium companies to invest in research and development has led to a jump in its R&D tax incentive payments.
In its economic update released today, the Government revealed the payments are expected to be $304 million higher than forecast in 2013-14, and $1.2 billion higher over the four years to 2016-17.
In February the Government cut access to the scheme for companies with more than $20 billion in annual turnover as part of a jobs plan more heavily focused on small business and startups.
The Government said the higher cost reflected a significant uptake in claims of the 45 per cent refundable tax offset for companies turning over less than $20 million. It also said it expected the higher level of claims would continue across the forward estimates.
Further refinements commencing from 1 July 2013 would ensure the incentive is targeted at small and medium companies more likely to undertake additional R&D as a result of the incentive, the Government said.
NICTA gets cash boost
The economic update also confirmed additional funding for research group National ICT Australia (NICTA), with $12.8 million set aside for the 2015-16 financial year from the Department of Industry and Innovation and $21 million from the Department of Broadband, Communications and the Digital Economy.
An additional $0.7 million was also flagged for the extenstion of a telehealth trial in Townsville.
Last week the Business Council of Australia recommended the government shift away from subsidies and expenditure in order to foster innovation.
It wants to see the establishment of a National Innovation Council, tasked with identifying “areas of comparative advantage, such as mining equipment, technology and services,” for government policies to be directed towards.
Today’s economic update showed the budget deficit is now expected to be $30.1 billion in 2013-14, up from the $18 billion forecast in the May budget.