Jill Trewhella
Deputy Vice-Chancellor (Research)
20 July 2016
AusIndustry
By email: RDTaxIncentiveDiscussionPaper@innovation.gov.au.
To Whom It May Concern,
Thank you for the opportunity to provide comment on the AusIndustry discussion paper
on “R&D Tax Incentive Implementation” released in November 2011.
AusIndustry’s commitment to ongoing dialogue with stakeholders in the development of
materials and activities to support the roll-out of the R&D Tax Incentives over the next 3
years is pleasing. The University of Sydney is interested in providing feedback on issues
and participating in activities advancing the R&D Tax Guidance Agenda supporting the
R&D Tax Incentive when opportunities arise.
General Observations.
Universities, as Research Service Providers (RSPs), have much more to offer industry
than simply performing research on its behalf. University RSPs can actively support
industry engagement in activities that nurture and build an innovation culture, and a
number of examples are given below under the four themes.
The R&D Tax Incentive Scheme aligns with the University’s strategic vision to enhance
community engagement and collaborations between industry and the public research
sector. Sydney, as a large, research-intensive university, has breadth and depth in
science and knowledge, and a long history of successful partnering with industry.
Sydnovate, Sydney’s commercial arm, is focusing a suite of capacities on increasing
interactions with industry to effectively translate and exchange knowledge generated at
the University, and will generate more and varied opportunities for industry and other
external partners to engage with University researchers. The R&D Tax Incentive scheme
will facilitate these interactions and offers further incentive for the University and SMEs to
proactively engage.
We would like to make the following observations on the R&D Tax Incentive consultation
paper. Sydney has contributed to the development of submissions that should be
forthcoming from the Group of Eight (Go8) and Universities Australia (UA).
Theme 1 – Innovation Culture.
University RSPs should encourage, and actively assist, industry’s engagement in
activities that build an innovation culture.
Companies themselves should undertake processes to develop a formal company
innovation policy, set up an innovation committee, encourage participation by company
personnel in programs designed to foster creative thinking, create processes for
capturing employee suggestions, appoint key personnel responsible for innovation, and
implement change management and innovation culture awareness programs.
Room 646, Jane Foss Russell Building
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RSPs can work with industry, particularly SMEs who may have limited in-house
resources, to develop appropriate processes and structures, provide consultation
services, assist with business process re-engineering, specific training of key personnel
and, through undergraduate and postgraduate training, provide an appropriately skilled
workforce, etc.
To maximise the uptake of the R&D incentives and increase overall innovation activity,
the incentives must generate predictable and consistent outcomes to provide a stable
framework for strategic planning; the administrative and compliance requirements must
be reasonable and incentives should be transparent, simple and stable while providing
flexibility for novel innovations.
In particular “eligibility” must be crystal clear. To this end, and to extend the value of
Advance Findings and aid in strategic planning, we would recommend that Public Rulings
be issued and updated as new precents are set and principles established by
AusIndustry. Perhaps Public Rulings could be illuminated with case studies exploring the
issues for the non-specialist audience.
Theme 2 – Prospective Customers.
Government, peak bodies, learned academies and other R&D related organisations
should educate members and encourage Australian companies and researchers to
participate in the R&D Tax Incentive – e.g., Commercialisation Australia, Knowledge
Commercialisation Australasia, The Australian Academy of Technological Sciences and
Engineering, etc.
We support the proposal, originally raised by the ANU, that where appropriate linkages
exist, the R&D Tax Incentives recognise investment in student places. While R&D Tax
Incentives must support industry we note the Go8’s comment that industry should
negotiate terms supportive of the RSP and students where industry would not necessarily
own the IP.
Theme 3 – Knowledge Management.
Guidance should include steps to improve intra-company communication between
technology managers, researchers and engineers and senior management in the areas
of knowledge management and compliance assurance.
Access to sectoral benchmarks for knowledge management, records management and
R&D governance would be useful. Such information could, for example, include
benchmarks on the uptake of R&D by universities acting as RSPs. University RSPs
would have to be prepared to assist in the areas of knowledge management, patenting
strategies and advice on commercialising technology.
Theme 4 – Transitions Boundaries and Interdependencies.
Definitions must clearly define core R&D activities and ineligible R&D activities and
provide clarification of ineligible core R&D activities in social science, arts and
humanities. Definitions must also overcome the re-labelling of existing activities as R&D
to qualify for tax incentives - this strongly depends on the definition of R&D for tax
purposes.
University RSPs can provide expert guidance during the transitional phase from “R&D
Tax Concession” to “R&D Tax Incentives” to assist companies assess initiatives against
the new eligibility criteria. For example: evidence and verification that R&D activities are
based on a scientific method; and state-of-the-art references from the scientific literature
and patent databases to verify that the R&D will generate new knowledge.
In conclusion, I would be delighted to discuss any aspect of this submission with you, and
I look forward to working with AusIndustry as the R&D Tax Incentive rolls out.
Yours sincerely
[Signature removed for electronic distribution]
Professor Jill Trewhella
Deputy Vice Chancellor (Research)