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May 2024
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The Federal Government’s Strategic Examination of R&D was announced in the 2024-25 Federal Budget. The review aims to foster greater Australian based innovation, research and commercialisation to drive national productivity and global competitiveness. |
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December 2024
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In 2024, the Government released the Terms of Reference and announced an independent expert panel with extensive experience across corporate, academic, and research sectors to led the review:
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February 2025
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On 12 February 2025, the Honourable Ed Husic (Minister for Industry and Science) announced the publication of the Strategic Examination of Research & Development discussion paper, aligning it with the Government’s broader Future Made in Australia agenda. |
The discussion paper reveals a continued decline in Australia’s R&D investment over the last 15 years, which fell to 1.66 per cent of GDP in 2021-22 compared to the OECD’s R&D intensity of 2.73 per cent. It outlines several key factors within Australia's current R&D ecosystem that have contributed to this decline, including:
The discussion paper also highlights opportunities to fast track innovation through adoption of artificial intelligence and provides international examples of R&D reforms, including, from the United States, the United Kingdon, Germany, South Korean, Sweden, France and Israel.
As part of the wider R&D landscape, the R&D Tax Incentive (RDTI) is referenced in the discussion paper as part of the Federal Government’s strong ‘bottom up’ funding. This type of funding is generally provided through ‘broad-based’ mechanisms including block funding to universities, competitive grants and business entitlements (i.e. the RDTI). The discussion paper recognises the importance of this type of funding to allow entrepreneurs and businesses to pursue their own innovations leading to ‘diverse and unexpected breakthroughs’.
The panel is considering opportunities to:
Public consultation with key stakeholders has now commenced and includes information webinars, roundtable discussions and the opportunity to put forward written submissions. Key stakeholders identified by the panel include industry, universities, government, peak bodies, First Nations Peoples and the public.
Written submissions are due by 11 April 2025 via the Department of Industry Science and Resources website and can be submitted publicly, anonymously, or privately. Private responses will remain confidential and will not be displayed on the department’s website, but may still be shared with other Australian Government agencies.
Following public consultation, the panel will seek additional feedback on policy options and recommendations.
The panel will then finalise its recommendation and deliver these to the Federal Government. The review is due to be completed by 31 December 2025.
With a federal election on the horizon, it remains to be seen how the Federal Government adopts and implements the key recommendations from the review.
Grant Thornton is supportive of the focus to uplift Australia’s R&D investment from 1.66 per cent of GDP to a more competitive level, closely aligning with the OECD’s R&D intensity of 2.73 per cent. Increasing investment in R&D is essential for enhancing our nation’s future productivity and prosperity, and for maintaining global competitiveness.
The RDTI remains a key driver of business investment in Australian innovation. As highlighted in the discussion paper and recognised by the OECD, investment in global R&D tax incentives and grants generates spillover benefits beyond financial gains. The RDTI is an important tool to enhance business investment in home-grown innovation and commercialisation. As part of the review process, it is critical there is market certainty of the Government’s ongoing support of the RDTI, to preserve business confidence in future R&D investments.
The findings of this landmark review will be instrumental in shaping Australia’s long-term R&D policy, and driving a strategic and collaborative approach to enhance Australia’s R&D investment.
For further information on the review or consultation process, please reach out to Grant Thornton's Innovation Incentives specialists for expert advice and support.
Article contributed to by Amy Jackson – Innovation Incentives
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