“The National Innovation and Science Agenda highlights the critical importance of innovation in growing the Australian economy, creating jobs, lifting the competitiveness of large and small Australian businesses, and the wages and living standards of Australians,” Business Council of Australia President Catherine Livingstone said.
“The Agenda represents a significant step towards recognising that there is a broader innovation system, that this system is entirely integrated with the economy rather than being separate from it, and that a whole of government approach is therefore needed to mobilise the system’s interdependent elements.
“In this context, it is vital that the initiatives outlined in the Agenda are complemented by improvements to economy-wide policy settings, including tax reform, the workplace relations system and the competition and de regulation agenda, which are fundamental to boosting Australia’s investment, innovation and productivity performance.
“While all policy settings should be regularly reviewed, we need to end the policy inconsistency and unnecessary rebadging which has seen Australia’s innovation performance fall well short on almost every international indicator.
“Policy continuity is a feature of those economies with a strong innovation performance. Today’s announcements provide a foundation for current and future governments to nurture an enduring, high-functioning innovation system in Australia.
“This requires bipartisan support for specific policy settings. Given the strong package announced by the ALP last week, we now need the major parties to agree on significant policy detail to lock in the fundamentals.
“Today’s National Innovation and Science Agenda conveys a positive and realistic ambition for what Australia can be. This is an opportunity to imagine our own future and work to realise our enormous potential as a nation.
“The Agenda represents more than a sum of its parts and must be supported and implemented as a package,” Ms Livingstone said.
Specific aspects of the Agenda welcomed by the Business Council include the following:
Culture and capital
• The package of tax breaks for early stage investors, including the 20 per cent tax offset, as well as a capital gains tax exemption, will help ensure new and innovative Australian companies can secure the capital they need to bring new products to market. Securing early stage funding has long been recognised as a key barrier for many start-ups. The focus must now be on tightly defining which businesses are eligible for this scheme.
• Changes to insolvency laws will help foster a culture of appropriate risk taking. Safe harbour provisions and reducing the bankruptcy period from three years to one strike a balance between protecting investors and creditors, while also promoting a more innovative business culture.
• These initiatives need to be complemented by broad based tax reform, in particular lowering the company tax rate for all businesses.
• Refocussing a greater proportion of grant funding towards collaboration will help drive collaboration between researchers and businesses. This has long been a weakness in Australia’s innovation system. Expanding funding for ARC linkage grants and moving to continuous application rounds will also drive greater collaboration.
• The Agenda provides much needed long-term funding certainty for key knowledge infrastructure institutions, including NCRIS, the Australian Synchrotron, and the Square Kilometre Array.
• The creation of a Cyber Security Growth Centre and funding for quantum computing research will mean Australian businesses remain at the forefront of this sector. In a fully connected global economy maintaining a world standard capability in cyber security is a national imperative.
Talent and skills
• Fundamentally, it is individuals who innovate so we welcome the emphasis on talent and skills. It is an individuals’ ability to think, problem solve, be creative, undertake critical thinking and analysis, and actively learn, which generates innovation.
• Attracting and retaining high end talent is a critical issue for Australia. The government’s recognition of the need to access international talent and to assist Australian talent to grow their ideas is welcome.
• Initiatives to encourage more women into technology and engineering fields are welcome and will address their current under-representation and build the supply base of talented individuals in Australia.
• Engaging in digital technologies is a core skill in both current and future workplaces. The government has elevated digital curriculum to the status of literacy and numeracy in recognition that all individuals will need these skills and capabilities to contribute effectively in the future.
Government as an exemplar
• The government has made a significant step as an exemplar through leveraging technology to improve services through the Digital Transformation Office and its new approach to government procurement through the Business Research and Innovation Initiative.
• The Business Council welcomes the review of the R&D Tax Incentive. All significant policy initiatives should be subject to review from time to time as part of good policy design. Any changes need to be carefully considered to ensure the arrangements encourage businesses of all sizes to continue to invest in R&D in Australia. It has already been subject to multiple changes over time. We need the review to result in a durable reset because R&D investment, by definition, takes time to yield a result.
• The government has recognised that Australia’s innovation performance is a result of interconnected policies that cut across all government portfolios. The creation of Innovation and Science Australia, accountable to a new Innovation and Science Committee of Cabinet, will provide a much needed whole-of-system view to the highest levels of government.
For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8224 2664 • Mobile 0403 241 128