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RESPONSE TO THE GOVERNMENT'S ANNOUNCEMENTS ABOUT THE FUTURE OF THE TAXATION CONCESSIONS FOR RESEARCH AND DEVELOPMENT
29 July 1996

'The Academy acknowledges that the "rorting" of the syndication scheme for industrial R&D had to be stopped. However, we are disappointed that the Government has been unable to make adjustments so that the R&D performed was a significant component of the tax foregone. The syndication scheme was providing significant funding for high-risk R&D, including attempts to make use of our high quality basic research in new products and processes. The scheme could have been modified to remove rorting and to include many of our best researchers who were excluded by the scheme as it was.

The Academy is pleased that the 150% deduction for R&D will be continued. The recent steep rise in business spending on R&D must be encouraged. If the Government saves about $330 million (estimated for 1995-6) it will have cut support by more than half. That would be giving industry the wrong signal concerning the need to increase industrial R&D'.