• This year’s budget can be somewhat be considered as two budgets together, in a seven month period;
• the R&D Tax Incentive is the “number one priority” for this year’s budget;
• whatever the merits were of amending the R&D Tax Incentive to make it more efficient and to reduce the cost, it’s pretty clear that now is not the time to be reducing investment in Australia’s economic future, which literally is what a cut to the R&D Tax Incentive is;
  
• the proposed legislative changes are unlikely to pass parliament, and Alex would love to see these put on hold indefinitely, or scrapped.

The R&D Tax Reform bill has been uniformly criticised by companies, industry groups and R&D tax professionals, with concerns particularly directed at the “Intensity Threshold” proposal, which would punish companies with large cost bases, such as local manufacturers.

The governments’ insistence of pursuing the reform should also be contrasted against Treasurer Josh Frydenberg’s headline in the AFR this week which stated that there would be “No budget deficit repair until jobless rate is below 6pc”.

Swanson Reed calls on all sides of politics to commit to a stable R&D Tax Incentive, and are of the view that the programme would be most effective in achieving its policy objectives if not subject to further proposed changes.