The Australian Information Industry Association (AIIA) claims officials from the departments of Innovation and The Treasury have admitted aspects of proposed R&D tax concession changes were unexpected and unintentional.
The meeting comes after tax experts, industry groups and companies that conduct R&D unified against Government plans to tighten the definition of R&D in Australia. Many have labelled them blatant cost-cutting and disastrous for IT organisations.
“What they explained as the issues they were seeking to change essentially revolved around what they considered to be inappropriate claims,” AIIA CEO, Ian Birks, said. “The way that they’ve gone about solving that particular issue is much more far-reaching than they had expected or intended.”
A spokesperson for the Minister for Innovation, Kim Carr, said the department as a rule would not comment on individual meetings. If true, the remarks strike a different chord compared to an earlier response to criticism, in which it claimed the changes would redistribute support to SMBs.
“The Government does not expect any firms will be forced to shut down. The new tax credit is designed to generate additional R&D in the economy,” a spokesperson for The Treasurer, Wayne Swan, said at the time.
Despite the alleged admissions, Birks was not promised any changes and said the AIIA would submit specific suggestions by the end of the week.
“There is a great deal of concern and a lot of potential impact that is detrimental to innovation and R&D in our industry,” he said. “The timing of the consultation has been particularly difficult given that the proposed policy was put out before Christmas and we’re now being asked to have a submission while people have been away from their desks.
“We’ve asked our members to write to their local Member of Parliament, whether that be Government or Opposition, we’ve made strong representations across all ministers and the Prime Minister and The Treasury, so there’s only so much you can do.”
However, Birks was confident his productive meeting with Government officials and the level of concern throughout the industry would affect changes to the proposed R&D tax concessions.
“Once you get a change in this kind of policy, experience shows it tends to stick for five years or more,” he said. “I do genuinely think there’s likelihood of change on some of the key problem areas.”