The Innovation Agenda
The Prime Minister, the Hon Malcolm Turnbull MP and the Minister for Industry, Innovation and Science, the Hon Christopher Pyne MP have unveiled the Government’s National Innovation and Science Agenda (NISA). Referred to as the ‘Ideas Boom’ the agenda outlines the Government’s plan to stimulate economic growth through collaboration with small business and research institutions.
In an address to the National Press Club, Minister Pyne announced the agenda would introduce new arrangements to encourage collaboration between researchers and industry, including streamlining and refocussing a greater proportion of research block grant funding. Minister Pyne has said the agenda will give all Australians the opportunity to profit from their ideas, ultimately making a more innovative and agile Australia.
The Government is investing around $9.7 billion in research and development in 2015-16. Around $3.2 billion of this will directly support business sector R&D and the rest will fund research in universities and research agencies such as the CSIRO.
Innovation continues to be the mantra for the Turnbull Government’s economic narrative. CapitalHill looks at the most recent developments in this agenda which may affect Australian industry.
New Initiatives for Business
- New tax breaks for early stage investors in innovative start-ups. Investors will receive a 20% non-refundable tax offset based on the amount of their investment, as well as a capital gains tax exemption;
- The introduction of a 10% non-refundable tax offset for capital invested in new Early Stage Venture Capital Limited Partnerships (ESVCLPs), and increasing the cap on committed capital from $100 million to $200 million for new ESVCLPs;
- The introduction of a more flexible ‘predominantly similar business test’. This will allow a start-up to bring in equity partners and secure new business opportunities without worrying about tax penalties;
- The removal of rules that limit depreciation deductions for some intangible assets, like patents;
- Various reforms for insolvency laws; and
- The pilot of a new approach to government procurement through the Business Research and Innovation Initiative. This initiative will allow small to medium enterprises to deliver innovative solutions for government, rather than tendering for an existing product.
Where will the money go?
- The Government is creating a $200 million CSIRO Innovation Fund to co-invest in new spin-off companies and existing start-ups that will develop technology from CSIRO and other publicly funded research agencies and universities;
- The new Biomedical Translation Fund will co-invest $250 million with the private sector to increase the capital available for commercialising medical research within Australia; and
- $26 million will additionally be committed towards building a Silicon Quantum Circuit aimed at boosting Australia’s world class capability in quantum computing research. The Commonwealth Bank will be providing an additional $10 million to this initiative over the next 5 years.
The Government will additionally be providing;
- $520 million for the Australian Synchrotron;
- $294 million for the Square Kilometre Array;
- $1.5 billion for the National Collaborative Research Infrastructure Strategy (NCRIS);
- $15 million to create the Cyber Security Growth Centre;
- $51 million to implement the digital technologies curriculum in Australian schools; and also
- $12 million was announced by Minister Pyne in his National Press Club address to support the greater participation of girls and women in the research sector, STEM industries and start-up firms.
Small Business Incentives
- New rules for the Employee Share Scheme (ESS) will allow companies to offer shares to their employees without having to reveal commercially sensitive information to their competitors.
- The Government is introducing a new Business Innovation and Investment (Provisional) Visa programme dubbed the ‘Entrepreneur Visa’. This initiative is aimed attracting foreign investment as well as fast-tracking immigrating young entrepreneurs.
- The Government has now tasked the Digital Transformation Office with creating a new Digital Marketplace. Breaking down the technology barriers for procurement processes will facilitate greater communication and collaboration between smaller and medium size businesses and the Government;
- The Government will be streamlining and refocussing a greater proportion of research block grant funding toward collaboration. There will be a provision of an additional $127 million over the forward estimates to research block grant funding;
- Also on the agenda is the expansion and relaunch of the Research Connections programme as Innovation Connections, opening up Australian Research Council Linkage Projects to continuous applications so as to fast track decisions on collaborative research grants. The Government will be opening a new application round for the Cooperative Research Centre programme in February 2016; and
- There will also be an unspecified amount of funding for research collaboration with international research-industry clusters, specifically Leading-Edge Clusters and Fraunhofer Institutes in Germany. The Government is also committed to increasing the access for entrepreneurial Australians to Tel Aviv and Silicon Valley.
New Governance Measures
The new independent statutory board, Innovation and Science Australia, will be a single body responsible for researching, planning and advising government on the long term strategic vision for innovation and science.
Supported by a chief executive officer, this new body will be accountable to the Minister for Industry, through the newly created Innovation and Science Committee of Cabinet, chaired by the Prime Minister.
One of the first responsibilities of the new Innovation and Science Australia board will be to review the current R&D tax incentives to improve their effectiveness and integrity, including by enhancing the focus on encouraging additional expenditure on R&D.
Of Interest to the Pharmaceutical Industry
The Government has implemented;
- The new Biomedical Translation Fund to co-invest $250 million with the private sector to increase the capital available for commercialising medical research within Australia;
- The removal of rules that limit depreciation deductions for some intangible assets, like patents, to a statutory life. This will instead allow them to be depreciated over their economic life like other assets;
- The $20 billion Medical Research Future Fund, established to provide a new, sustained increase in funding available for medical research and innovation;
- The development of an Intellectual Property Toolkit, with model contracts and case studies, to facilitate collaboration between research and industry; and
- $520 million for the Australian Synchrotron.
To read the government’s full report please click here.
To read the joint media release by the Prime Minister and the Minister for Industry, Innovation and Science, please click here.
CapitalHill is well positioned to provide advice to companies and organisations on how to maximise the opportunities created by the Government’s enthusiasm for Australian innovation.
To arrange a briefing from our team, please contact us directly in Canberra on (02) 6198 3210 or in Sydney on (02) 9221 9255.