Budget 2018: R&D tax incentive changes target big business, not startups

Tom Skotnicki - SmartCompany - 8 May 2018

In its changes to the R&D tax incentive, the federal government has chosen to target primarily big business rather than startups in its efforts to save $2.4 billion over the next four years.

The scheme, which costs the budget more than $3 billion, has been growing at a rapid rate with the continued growth in the innovation sector.

However, the startup sector has not escaped altogether, with the introduction of a $4 million cap on the cash refund available to companies with annual turnover of less than $20 million.

The announcement of the cap will be of great concern to those startups that are in the non-revenue generating phase of their development. Many startups in the biotech sector frequently need to invest more than $4 million a year on R&D to establish a potential future revenue base.

StartupAUS chief executive Alex McCauley warned prior to the budget that a $4 million cap would be of concern. He said that for some in the sector it would create a threat that could lead to a move of some R&D activity offshore. Read More