An innovation review delivered to the Australian government in August proposes changes in order to boost the country’s R&D spending from 0.55% of GDP to 0.75% of GDP by 2010. Among the proposals are the replacement of the current R&D tax credit, which offers companies an AUD 7.5 cents tax credit per dollar spent on R&D, with a tax credit of AUD 20 cents for companies with sales of less than AUD 50 million ($41 million). A tax credit of as much as AUD $10 cents per R&D dollar is proposed for other companies. The changes are estimated to increase government costs 31% per year to AUD $920 million by 2011, but Innovation Minister Kim Carr believes the funding is available. The report also recommends that university research be fully funded, which will cost the government an estimated AUD $300 million annually. Minister Carr doubted the feasibility of this change as well as the recommendation to fund research agencies at 1990 levels, which would cost AUD 2$.2 billion per year. Minister Carr advocates more R&D investment by business and R&D cooperation and specialization by universities.

Source: The Australian