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Bio Technology : October 2009
62 Australasian BioTechnology Volume 19 • Number 3 • October 2009 AusBioBUSINESS Federal support for biotechnology By Senator the Hon Kim Carr, Minister for Innovation, Industry, Science and Research Biotechnology offers major economic and social benefts and is a key player in resolving many of Australia's future challenges through clean energy alternatives, new pharmaceutical opportunities and waste reduction. As Minister for Innovation, Industry Science and Research, I am pleased to demonstrate this Government’s ongoing com- mitment to the Australian biotechnology industry through the Powering Ideas, an Innovation Agen- da for the 21st century. Powering Ideas is a forward thinking,10-year vision to expand Australia's capacity to create new knowledge and find new ways of doing business. To meet this vision for the future, it will offer further incentives for innovation in business, government and the community. To support business innovation, the Government is introducing new programs including the National Enabling Technologies Strategy, the Commonwealth Commercialisation Institute and the R&D Tax Credit. The new R&D Tax Credit is the biggest reform to business innovation support for more than a decade. The Govern- ment has designed the R&D Tax Credit to be simple, predictable and modelled on international best practice. From the 2010--11 income year, the R&D Tax Credit will provide a 45 per cent refundable tax credit to firms with a grouped turnover of less than $20 million per annum. This will benefit high-tech start-up companies in areas such as biotechnology, it doubles the base R&D tax incentive for eligible firms, and is equivalent to a 150 per cent tax concession. For firms with a grouped turnover of $20 million or more per annum, a 40 per cent non-refundable tax credit will be provided, raising the base R&D tax incentive for larger firms by a third. This is the equivalent of a 133 per cent tax concession. The R&D Tax Credit is decoupled from the corporate tax rate and thereby creates certainty for firms regarding the level of assistance provided. The complex R&D Tax Concession Premium and International Premium will also be abolished and definitions of eligible R&D tightened to provide better targeted support. The Government is releasing a consultation paper providing the framework for the scope of eligible R&D activity and outlining possible approaches to this framework through legislation. Submissions will close six weeks from the date of the release of the consultation paper. We will also be releasing the exposure draft legislation and associated explanatory material for the new R&D Tax Credit. It is expected that this will be made available in Spring 2009, and will provide further opportunity for public involvement in the consultation process. I encourage you to get involved in this consultation proc- ess. To subscribe to regular updates on the development of the R&D Tax Credit visit the AusIndustry website, www.ausindustry.gov.au. Senator the Hon Kim Carr, Minister for Innovation, Industry, Science and Research.