Innovation
Issue No. 51 - February/March 2010
Global fight for investment: KPMG
Innovation is a critical part of what keeps businesses ahead of the pack. On a broader scale, innovation is a key driver in the economic prosperity of Australia, especially in moving beyond the recent harder economic times.
But Australian companies still find it difficult to obtain adequate funding to support their innovation. Mathew Herring, KPMG Partner for R&D Incentives, says the Australian Government has supported innovation in the past through tax concessions for companies conducting R&D and various grants programs, but questions whether support goes far enough.
He points out countries across the Asia Pacific(ASPAC) region are competing harder than ever before to attract companies wanting to undertake R&D work and Australia needs to be “on alert” to remain an attractive place to invest.
In the third edition of its R&D Incentives – Adding Value Across ASPAC publication, KPMG has reviewed the incentives available in key economies, including Australia,China, India, Japan, Korea, Malaysia, Thailand and Singapore. The study found many of the ASPAC countries have updated and improved their incentives.“Here in Australia, we have announced a reform of our R&D incentives to provide greater benefits and this was welcomed because we were becoming a less attractive place for innovative companies,” Matt says.
He says recent changes to the R&D tax incentives may make it possible for innovative companies to obtain greater tax deductions or in some cases cash refunds,but industry still waits for clarity around possible changes to eligibility criteria which is the focus of a recent Federal Government consultation process. “Even with the proposed changes, we’re not necessarily ahead of the game in that respect when you consider, for example, Singapore’s enhanced 150% tax deduction for R&D expenditure and deduction for qualifying start-up enterprises is now operative,”he says.“At this stage, it appears the big winners arising from t...
