Senator Kim Carr, Minister for Innovation, Industry, Science and Research, recently released the Cutler Report, a review of Australia’s National Innovation System. An expert panel, led by Dr Terry Cutler, reviewed Australia’s current innovation system and made a number of recommendations to stimulate innovation in Australia and improve the current system. Senator Carr commented that: “The Review provides an honest appraisal of Australia’s innovation effort and concludes that while our global competitors have been increasing their innovation efforts, our performance has been falling”.
The panel’s recommendations span a broad range of themes, including innovation in business, strengthening people and skills, excellence in national research, market research and funding. Of particular interest are the recommendations relating to government funding for stimulating innovation. Some of these recommendations include:
- Changing the existing R&D Tax Concession from a tax deduction to a tax credit, to enable firms not yet in tax profit to be eligible for this funding. A tax credit of 40 percent is proposed for larger firms whereas a refundable tax credit of 50 percent is proposed for smaller firms having a turnover of less than $50 million. This represents a tenfold increase on the present turnover limit of $5 million.
- Continuing and expanding the Commercialising Emerging Technologies (COMET) program for another five years, including a funding increase of at least 25%.
- Introducing a Competitive Innovation Grants Program to assist innovative firms with limited access to capital, particularly in the early and high-risk proof of concept and development stages. Successful recipients would be required to repay grants from later earnings streams.
- Maintaining a portfolio of collaboration and linkage programs to support productive partnerships both globally and in the National Innovation System. In particular, the Report endorses the Cooperative Research Centres (CRC) Review recommendation of re-configuring the CRC program with additional funding.
- Introducing a pilot linkage voucher scheme to improve linkages between small and medium sized enterprises (SMEs) and the research community.
- The Government to consider strategies to attract international venture fund(s) to Australia as the base for investment in the Asia Pacific region and to strengthen Australian links into US capital markets.