Whilst innovation is key to improving Australia’s productivity and driving economic growth it has not been front-and-centre in the 2022-23 budget. However, innovation and commercialisation have not been ignored, and some welcome initiatives have been included in addition to announcements made prior to the budget. Unfortunately, some others are being quietly scrapped or put in the “too-hard basket”.
New budget initiatives
- The most unheralded initiative is that the Government will expand the Patent Box Scheme, announced in the 2021-22 Budget and currently before Parliament, to support practical, technology-focused innovations in the Australian agricultural and low-emissions sectors. Eligible corporate income will be subject to an effective income tax rate of 17 per cent for patent box regimes and patents granted or issued after 29 March 2022 and for income years starting on or after 1 July 2023. Improvements to the med-tech Patent Box broaden eligibility for patents issued after 11 May 2021.
- The Government is introducing a Technology Investment Boost to support digital adoption by small businesses, providing 120 per cent tax deductions for adoption of new digital services. Although welcome, it is not directly focussed on new R&D outcomes.
- The Government will continue to invest in lifesaving and job-creating medical research by committing a further $1.3 billion to the Medical Research Future Fund (MRFF) Ten Year Investment Plan, making it a $6.3billion total commitment.
- The Government is providing $30.2 million to extend its Cyber Hubs pilot, which began in July, to reduce the number of networks and focus investment.
- The Government will also provide $38.4 million over three years to implement the response to the Consumer Data Right (CDR) inquiry
- A further $1.0 billion has been committed to protecting the Great Barrier Reef.
Previously announced initiatives
A number of previously announced innovation-focused initiatives were confirmed in last night’s announcements. The Government will provide:
- $988.2 million over five years from 2021-22 (and around $325.1 million per year ongoing) to deliver an ambitious research reform package that will drive university-industry collaboration, workforce mobility and research translation and commercialisation
- $45.4 million over five years from 2021-22 to support science, technology, engineering and maths (STEM).
- $33.4 million over two years from 2021-22 (including $14.4 million in capital funding) to the National Measurement Institute to deliver essential measurement standards and services that underpin business continuity and international trade
- $5.3 million over two years from 2021-22 to improve the National Science and Technology Council’s provision of science and technology advice to the Government and to continue the Prime Minister’s Prizes for Science
- $4.7 million over four years from 2022-23 to continue the Women in STEM Ambassador initiative and the Future You national digital awareness-raising initiative
- $2.0 million over four years from 2021-22 to extend the Superstars of STEM program to continue raising the profile of Australian women in STEM and inspire the next generation.
- an additional $328.3 million over five years from 2021-22 to further support the Modern Manufacturing Strategy and National Manufacturing Priorities (NMPs) and address critical supply chain vulnerabilities.
- $250.0 million over two years from 2022-23 to extend the Modern Manufacturing Initiative to support businesses in NMP sectors to deliver high-impact projects
- $53.9 million over four years from 2021-22 to extend the Manufacturing Modernisation Fund to support technology adoption in NMPs
- $6.9 million over two years from 2021-22 to develop Manufacturing Investment Plans to guide government and industry investment in NMPs.
- The Government has also committed additional funds totalling $804m to support new exploration and research and development in the Antarctic region currently controlled by Australia
Other innovation-related initiatives include:
- $18.6 million over four years (and $3.2 million per year over the forward estimates) to “shape global critical and emerging technology standards”
- $13.6 million over four years to “continue the Office of Future Transport Technology and support the digitisation of the transport sector”
- $4.8 million to continue the Digital Technology Taskforce for a further two years
- $3.9 million over two years to “support women to pursue career opportunities in Australia’s growing tech workforce”
- $1.8 million for the DTA to further support the development of the digital identity system, including “funding arrangements” associated with the digital identity legislation
- an undisclosed amount of funding for the Department of Industry, Science, Energy and Resources to invest in Australia’s quantum computing industry
- At no direct cost to the Government, Defence procurement rules will change from 1 July 2022 to allow SME’s to bid directly on smaller packages of up to $500,000 – hopefully encouraging more innovative solutions
For some time, the Government has signalled its desire to de-fund the Growth Centre Initiative. Sadly, despite a positive report by economists ACIL Allen on the value of the Growth Centres the Government will not extend funding beyond 30 June 2022.
The CRC and CRC-P programmes continue to receive funding, representing 30 years of consistent policy supporting collaboration between industry and research institutes.
The Research & Development Tax Incentive program – a major contributor to encouraging innovation – continues to be supported by the Government. Unfortunately, the application process, which lacks clarity in areas, will not be funded for red tape improvements.
Regrettably, no new funding has yet been announced for climate change transition or adaptation, but with approximately $1 billion included as “decisions still to be announced”, we hope this existential threat will be addressed in the coming weeks.
Overall, the 2022-23 budget is mildly positive for innovation and brings no major change in direction, giving the sector a base to build from.
Written by Warren Bradey, Senior Commercialisation Manager, gemaker