Second Reading SpeechMr ENTSCH (Parliamentary Secretary to the Minister for Industry, Science and Resources)
That the bill be now read a second time.
This bill amends the Industry Research and Development Act 1986 and contains provisions to streamline the administration of the Research and Development Tax Concession Scheme, with the aim of reducing compliance costs for companies. It responds to the need for such measures identified in `Investing for Growth', the government's industry statement of last December.
The bill will make the registration process easier for companies that wish to claim the tax deduction. The period for making an application for registration will be increased by four months, to a total of 10 months from the end of the year of income for which the company seeks registration. This will be more convenient for companies with normal accounting periods, giving them more time to prepare their applications and shifting the deadline away from busy periods on the calendar.
The bill also addresses some rigidities in the procedures for company registration.
The proposed changes will allow the Industry Research and Development Board a limited discretion to consider some late applications for registration and to correct minor errors made by companies in their registration applications. At present, even if there are exceptional circumstances, missing a deadline or getting the company name wrong in an application can cost a company its access to the research and development tax concession. This bill will give the board more flexibility to treat such cases based on the specific circumstances attaching to each.
The discretions being given to the board will, however, be limited in such a way that they will not weaken those provisions of the act designed to prevent retrospective access to the tax concession.
In addition, this bill will give the board the flexibility to require different levels of information from different classes of applicant. This will enable the board, for example, to reduce the information requirement and, hence, the compliance cost of the scheme for companies undertaking smaller dollar amounts of research and development.
Companies eligible for approval to undertake up to 10 per cent of their research and development activities overseas will also benefit from this bill. The proposed change will make the effective date for any board approval the date on which the application is received. At present, any expenditure a company incurs between the date of application and board approval-which can take some months-is not eligible for a con cessional tax deduction. This bill will fix that situation.
The bill also contains a raft of minor measures aimed at improving the administration of the Research and Development Tax Concession Scheme consistent with improving its integrity and efficacy.
These minor measures include clarification of the board's powers in the areas of exploitation of R&D results and overseas expenditures on R&D; administrative improvements to the Registered Research Agency Scheme; and housekeeping matters relating to board appointments, sharing of information and recruitment of consultants.
I commend the bill to the House and present its explanatory memorandum.
Debate (on motion by Mr O'Connor) adjourned.
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