Abandon R&D investment restrictions, lift Newstart allowance, and create opportunities from the challenges ahead of us
Yasser El-Ansary
The Federal Government should immediately move to abandon plans to tighten access to Australia’s world-class research and development investment program, boost consumer spending through an increase in the rate of Newstart and other related allowances, and put in place an active strategy to attract investment from offshore amidst the global economic challenges ahead of us, according to the Australian Investment Council.
“The Australian economy is facing some very significant risks on the back of a sustained downturn in consumer confidence and business investment, which will now be further exacerbated by the impact of COVID-19 domestically and globally,” said the Council’s Chief Executive, Yasser El-Ansary.
“Right now, the Government should be looking at all options to help maintain growth across the economy, which is critically important to minimising downside risks in relation to consumer spending, employment, productivity and investment in innovation.
“Introducing changes to Australia’s research and development investment program at this point in time would be wrong – given the situation we now find ourselves in, we should be moving the other way and incentivising our SME business market to expand their investment in R&D which will lead directly to productivity and employment growth[1],” added Mr El-Ansary.
“The disruption facing many developed economies around the world creates a unique opportunity for Australia to position itself as a stable and attractive destination for offshore investors in the period ahead. Australia has an enviable track record of economic growth and policy stability, and Government should ensure that the upcoming economic stimulus package creates positive opportunities out of the challenges that are in front of us.
“We should be sending a signal to investors all of over the world that Australia is ‘open for business’, and that we will do everything possible to attract investment into our economy,” said Mr El-Ansary.
“The Australian Investment Council is also joining calls by other community and business groups around Australia to immediately deliver a rise in the rate of Newstart, Youth Allowance and other related payments to ensure greater social equality for the most vulnerable in our communities, and at the same time, deliver an immediate boost to consumer spending at a time when the economy needs it the most,” according to Mr El-Ansary.
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[1] The Government has put forward legislation to the Parliament to tighten access to the Research and Development Tax Incentive by introducing caps on access to refundable credits for smaller and more innovative businesses, and restricting access to the program for larger businesses. The changes, contained in Treasury Laws Amendment (Research and Development Tax Incentive) Bill 2019, are the subject of a new inquiry recently initiated by the Senate Economics Legislation Committee.
