The positive news - is that we have an innovation minister in Karen Andrews that seems to be listening and is looking to make a change.
The Bad News
Australia has slipped from 16th to 18th place, according to the World Economic Forum (WEF) - And is getting worse !
The top 7 places in the global digital competitiveness rankings are dominated by Singapore, China, northern Europe and the US. These countries lead the way in embedding and leveraging digital technologies. Critically, they are characterised by business and governments that embraces new digital technologies and innovations.
Innovators , Startups and Technology companies start off as high risk ventures - going out on a limb to build new products, services and businesses .
These businesses in Australia have recently been under attack and at risk for claiming R and D tax Concessions .
The rigid re-interpretation and tightening of the laws regarding the eligibility of software claims - has resulted in a clawback of $200 million in the 2018 financial year from companies that had made claims under the R&D Tax Incentive (RDTI) , and has effectively put all software developement and innovation at risk - resulting in a reduction in R&D support going where it is best deployed, at the cutting edge of Australian technology.
This is putting the survival of many SME and Startup companies focussed on Research and Development and innovation at risk - which will, in my view, is not in the best interests of the future of Australia.
AirTree Ventures co-founder Daniel Petre (former Innovation and Science Australia board member ) has call government’s treatment of tech companies “appalling”.
Small business ombudsman Kate Carnell has launched an investigation into this after receiving complaints from small business about unfair treatment by the ATO and AusIndustry in relation to R&D tax incentive claims.
“Of particular concern are audits going back several years, which have resulted in the ATO demanding businesses repay the R&D Tax Incentive, often with a severe penalty applied,” Ms Carnell said.
“Unfortunately some of these businesses have been told to pay back the tax benefit years after the R&D has been completed. This is well after they received the refund from the ATO and reinvested that money back into the business,” she said.
“Most of these businesses were genuine in their belief they were undertaking R&D and that their claims were totally justified.”
The Good News
Industry Minister Karen Andrews has engaged with industry through a series of stakeholder roundtables since the election where the administration of the R&D tax incentive has been raised as an issue, particularly among startups.
I look forward to reporting a positive outcome for our Innovators , Startups and Technology Companies.
Here’s hoping that we can once again bring Australia to the forefront of Global Innovation - and encourage innovators to take risk, innovate , and do research and development - with the blessing and support of Government
If you are innovating or are interested in being a part of our innovation community , join us at our bbg innovation forum
https://www.eventbrite.com.au/e/bsi-innovation-forum-powered-by-bbg-tickets-50474711220
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