Cutler Review- set of measures to lift Aust’s innovation effort

“Improved innovation outcomes are the key to Australia meeting the challenges of the 21st Century and the Review rightly places significant emphasis on placing innovation as a central plank of economic policy.  Raising productivity by innovating more is critical to our ability to continue to raise living standards while confronting an ageing population, slower productivity growth and environmental challenges.

“A number of the major proposals in the Report are in line with recommendations made by Ai Group including the establishment of a National Innovation Council and a National Centre for Innovation Research; the strengthening of Enterprise Connect to build innovative capabilities in SMEs;  a new program to support industry research collaboration;  a new commercialisation grant program; and the introduction of a simplified tax credit to support R&D expenditure.

“SMEs would particularly benefit from the proposal for a 50% refundable Tax Credit which would increase the effective rate of assistance from 7.5 cents in the dollar to 20 cents and not be restricted to companies who incurred a loss.  As well, eligibility has been expanded to companies with turnover less than $50 million (as opposed to under $5 million).  Ai Group also welcomes the recommendation to make foreign owned firms eligible for the 40% tax credit.

“The proposed measures are quite extensive and will require the Government to consider the recommendations as part of a coordinated approach to lifting the productivity of Australian industry.  This will include measures for the automotive and TCF sectors, along with any proposals arising from the review of trade policy.  As well, Ai Group research confirms that our skill shortages are undermining our innovation effort and so any measures will need to be complemented by appropriate skills development strategies.

“Importantly, in responding to the Cutler recommendations, Ai Group would urge the Government to consider a formal review of management education in regard to innovation,” Ridout said.