The R&D Tax Concession program was independently evaluated in mid-2003. The evaluation was based on a survey of tax concession recipient firms, with more than 700 firms providing data for the review. The evaluation assessed the effectiveness, appropriateness and efficiency of the 125% R&D Tax Concession.
The evaluation found that the R&D Tax Concession is an appropriate policy instrument and is effective in encouraging additional business investment in R&D. Other key findings of the evaluation are:
The main focus of R&D is on developing new and better products, and reducing costs through process improvements;
On average, firms expect that their R&D is highly novel or develops a platform technology that might spur innovations in other industries or applications;
About 30% of firms who responded to the survey indicated that their R&D built on R&D developments in other industries, and about a third of firms obtained access to R&D by buying the IP; and
On average, firms expect that a typical year’s R&D will contribute substantially to sales and profits five years after it is conducted.
The evaluation does not recommend any change to policy or delivery of the program and notes that 93% of R&D Tax Concession recipients are satisfied with the overall delivery of the tax concession scheme.