TAX concessions to promote research and development in Australia will be re-examined under a review of government programs to encourage innovation.

Samantha Maiden | January 23, 2008
Innovation, Industry, Science and Research Minister Kim Carr wants establish a national inquiry to "streamline'' programs across commonwealth and state governments

Innovation, Industry, Science and Research Minister Kim Carr yesterday announced his intention to establish a national inquiry to "streamline'' programs across commonwealth and state governments to reduce duplication and boost productivity.

A longtime advocate of boosting the current 125 per cent R&D tax breaks, Senator Carr could use the review, which will not report until July this year, to build the case for greater tax concessions in next years' budget.

But signalling the review could result in a pruning of the current array of industry assistance programs, Senator Carr said that central to the review would be an examination of "the bewildering array of government innovation and industry assistance programs".

"At last count there were 169 programs in Australia, across all levels of government, aimed at supporting innovation,'' Senator Carr said.

"The review will allow the Rudd Government to work with the states and territories to streamline these programs, reducing fragmentation and improving effectiveness.

"In particular, we need to find ways to increase innovation performance across the economy, to ensure that business has better access to new ideas and new technologies and to bridge the divide between industry and research.''

The inquiry is unlikely to deliver immediate savings from the Rudd Government's budget razor gang, because the review will not report any findings until mid-year.

The review will also include an examination of the co-operative research centres program which became more industry-focused under the tenure of former education minister Julie Bishop. Senator Carr is believed to be interested in restoring a greater public benefit test.

The review of Australia's national innovation system will be conducted by an expert panel chaired by Terry Cutler. Dr Cutler is a director of the CSIRO and Chair of the Advisory Board for the Centre for Excellence for Creative Industries.

The panel will include former Adelaide University vice-chancellor, Mary O'Kane, who will be charged with the specific task of reviewing the Co-operative Research Centres Program.

Other members of the review panel are: Megan Clark (Vice President Technology, BHP Billiton); Glyn Davis (Vice Chancellor, University of Melbourne); Steve Dowrick (School of Economics, Australian National University); Nicholas Gruen (CEO, Lateral Economics); Narelle Kennedy (Chief Executive, Australian Business Foundation); Catherine Livingstone (former Chair of CSIRO and Director, Macquarie Bank and Telstra); and Jim Peacock (ex-officio, the Commonwealth Chief Scientist).

The inquiry's terms of reference include a request that the expert panel "consider the appropriateness, effectiveness and efficiency of the research and development tax concession scheme in promoting innovation and make recommendations to improve innovation outcomes.''