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Australia risks becoming a nation that relies on other people’s ideas – please re-post and share on your social networks to stop cuts to the R&D tax incentive

  • Australia risks becoming a country that relies on other people’s ideas if the Government proceeds with plans to cut the $3 billion R&D tax incentive, and restrict claims for software R&D.
  • Business R&D in Australia is already below the average of other advanced economies, and we have been in the midst of a R&D recession, with a 12 per cent (or $2.2 billion) decline in the latest data.
    • While claims under the R&D Tax Incentive have risen this likely reflects industry coming to grips with the design of the scheme following several major changes in design.
  • Restrictions for software R&D are particularly problematic as IT research is the biggest component of business R&D, and one of the few fields where research spending has grown over the last decade.
  • Without adequate government support, businesses will underinvest in R&D because the full public benefits of new knowledge cannot be captured by private investors.
  • Industry acknowledges the importance of ensuring the R&D tax incentive is well designed, but constant changes are undermining the ability of businesses to invest with confidence.
  • Efforts to restrict claims for software are supposedly motivated by concern that the system is being abused, but evidence has not been presented and the proposed changes will mainly punish legitimate research.
  • Similarly thin evidence supporting other proposed changes, such as limiting the incentive to businesses with a particular level of R&D intensity, suggests that the primary motivation is to boost short-term tax revenue, even at the risk of compromising long-term prosperity and in the face of evidence showing that R&D expenditure claims is already in decline for the last 2 years.
  • ICT is a highly mobile, labour based industry and businesses will move its scarce labour resources to where there is better support. R&D should be seen as an investment to stopping this brain drain. In events that the AIIA run for export development the key message we hear from members is not how to improve export but how best to relocate.

AIIA is preparing for the Federal Budget to be released May 8. Reach out for any concerns you’d like us to raise

The AIIA have been invited to participate in a budget lock-in on May 8th. The Budget will likely have announcements to changes on the R&D tax incentive, migration, follow ups to the Innovation and Science Australia report among many other possibilities. Please reach out to Kim Hicks or Damien Lewis if you have particular concerns. Members, keep an eye on the AIIA website for our budget response.

AIIA attended a Department of Foreign Affairs and Trade Roundtable Meeting with Industry Peak Organisations for an Update on Trade Agreement Negotiations and Implementation

The meeting focused on the Government’s current forward trade agenda for Australia. Updates by DFAT include:

  • US Trade Actions and the Multilateral System
  • Agreements Signed, yet to enter into force (TPP-11/Peru-Australia FTA)
  • Current Trade Negotiations:
  1. Bilateral – (A-HKFTA/IA-CEPA/Australia-India CECA)
  2. Regional – (RCEP/PAFTA/PACER/PACER Plus)
  3. Multilateral / Plurilateral – (WTO/MC11/Ecommerce/Government Procurement Agreement)
  • Future Negotiations (EU/UK)
  • FTA Implementation/Compliance (China Review/Other North Asia FTAs/AANZFTA)
  • APEC / G20
  • Visa Reforms
  • Trade and Investment Advocacy
  • Digital Trade Consultations

Members, if you would like further background from this meeting, please reach out to Kim Hicks or Damien Lewis.

Next steps for industry working group on the Global Talent Scheme

As mentioned in previous editions, the AIIA is on the industry working group to help government development the piolet for the Global Talent Scheme. The next step is a short stakeholder meeting to highlight key issues and areas of Industry concerns that need addressing in the pilot design phase of the scheme. See our response to the Minister’s announcement of the scheme here.

Members, if you would like further information on this pilot scheme that the AIIA are participating in, please contact Kim Hicks or Damien Lewis for further details.

Following a private roundtable with members, the AIIA has now submitted written Feedback on Phase Two of the Trusted Digital Identity Framework (TDIF).

AIIA recently held a roundtable discussion with the DTA and members on an in-depth discussion of Phase Two of the TDIF. Public consultations will open from 9 May to 5 June and the AIIA is happy to report that some suggestions have been taken on board.

Members, if you are interested in the TDIF and continued work with the DTA on the framework, please contact Kim Hicks to get involved. Additionally, the AIIA’s Digital Identity Special Interest Group (SIG), has a heavy focus on the TDIF – we welcome new members to this group. Please contact Damien Lewis for details.

AIIA are currently working with select key SIGs to develop work plans to help achieve targets

Following the recently held quarterly SIG meetings, the AIIA are working with select SIGs to develop action ordinated work plans which will be used to help focus SIG activities throughout 2018.

If you would like further information on this process, please contact Damien Lewis.

Following our strategy planning day, the AIIA are currently exploring new ways of improving service delivery including reforms to how we engage with members

Members, if you have any feedback or would like to provide guidance on how the AIIA could improve its service offerings and capability, please contact Kim Hicks for a private discussion.