Confirmation that Labor and the Greens will team up to pass retrograde changes to R&D tax incentive rules is another slap in the face for Australian manufacturers and miners.

It is also a damaging omen about the wheeling and dealing clearly already underway in preparation for a Green-controlled Senate from 1 July.

By heavily restricting the qualifications for assistance, the changes are blatantly and cynically aimed at revenue-raising and will inevitably reduce the number of Australian businesses who receive encouragement to invest in research and development.

 “Worst affected will be the manufacturing and mining industries – which are the two largest sectoral investors in Australian R&D and, between them, account for more than half of all business R&D,” said Shadow Innovation Minister Sophie Mirabella.

 “As usual, Labor wants to punish successful businesses. It will now be substantially reducing support for the ‘D’ of ‘R&D’ – which is a calamity for local innovation, because around 95% of R&D activity involves firms making refinements to their existing practices.

 “It has also typically ignored feedback, and Minister Carr has frequently abused people who have constructively suggested changes – even calling them ‘well-organised’ campaigners, ‘vested interests’ and ‘losers (who) scream like … stuck pigs’.

 “And now it also apparently intends to make the whole mess even worse by legislating for quarterly payments – without having ever explained how it will overcome the myriad of administrative and compliance problems that will inevitably accompany their introduction.”

The Coalition is proud to have argued in favour of the retention of a system that had operated with bipartisan support since it was introduced by Labor in the 1980s.

But we are disappointed the ALP and the Greens are targeting R&D as an area for significant cutting as a means of offsetting some of the extraordinarily wasteful and excessive spending of the past three-and-a-half years.