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CONCERNS RAISED OVER AUSTRALIA’S R&D CAPACITY

July 29, 2020

Reports today reveal additional pressure on the Morrison Government to develop a comprehensive manufacturing and industry plan to drive employment and boost economic growth.

A number of business leaders and experts have raised concerns about Australia’s research and development capacity.

Research and Development is inextricably linked to a recovery led by advanced manufacturing, and the manufacturing sector is the second largest spender on R&D.

However, the only plan the Morrison Government currently has is to rip $1.8 billion from the Research and Development Tax Incentive (RDTI).

The Morrison Government speaks publicly against raising taxes to drive economic recovery, but at the same time they want to increase the tax burden on innovative firms by nearly $2 billion.

The RDTI is retrospective, with an operational date of 1 July 2019, meaning if passed in its current form, the Government will claw back money from investments made by businesses under the current law.

COVID-19 has demonstrated just how vulnerable Australia is to global supply chain shocks. The Liberals’ lack of a economic plan is leaving Australia, and the manufacturing sector, dangerously exposed to turbulence in the global economy.

While some of our manufacturers have adapted to produce much needed Personal Protective Equipment and other essential suppliers during COVID-19, Australia needs a more sophisticated manufacturing plan than just responding to crises.

Yet the Morrison Government failed to outline a plan for manufacturing in last week’s Budget update.

Australia has always been a nation that makes things, but this ability is shrinking as the manufacturing sector has been contracting not growing.

As we look to the future and how we best emerge from the health crisis and recession, the Morrison Government must do more to support the Australian manufacturing sector. A strong local manufacturing industry will create jobs and long term export and trading opportunities

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