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Reposting @fast41's link in the Boost thread in full here (from...

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    Reposting @fast41's link in the Boost thread in full here (from today's Australian)....

    https://www.theaustralian.com.au/bu...e/news-story/1545fe0ce5e4392769b97f6f7508b9be

    TECHNOLOGY

    Capping R&D tax incentive doesn’t make sense


    Justin Miller, chief executive of Nuheara.
    I don’t want the next Nuheara to be founded in Silicon Valley.
    I co-founded Nuheara with the determination to transform the way people hear by creating game-changing hearing solutions that are accessible and affordable. And we chose to do that in Australia because we wanted to prove to the world that we could lead the wireless earbud race in creating both hardware and software that will change how we deal with hearing issues globally.
    As a global company, the research and development incentive is one of the primary reasons Nuheara is based in Perth and listed in Australia. We could have been based in Silicon Valley — we have offices in San Francisco — but our product development and engineering is all based in Australia.
    If we want to have an Australia that is leading the way in technology and not left behind in the race, we must have an R&D policy that is not limited by caps. It’s simple: without R&D, companies simply can’t thrive. As an investor, you wouldn’t want revenue to be capped, so why should we be looking to cap the R&D incentive?
    In Nuheara’s case, our revenue is directly correlated to our R&D. It’s a no-brainer.
    We invest in R&D so we can transform the way people hear by creating game-changing hearing solutions that are accessible and affordable.
    The significant revenue we generate — the majority of which is derived through exports — can be directly linked to the R&D investment we were able to make because of the incentive.
    This is a win-win. We’re conducting R&D in Australia, generating revenue offshore, growing the Australian economy and creating Australian jobs. Based on our success today we see ourselves conducting a hell of a lot more R&D and generating more revenue.
    We invest in research with Australian universities and we believe in unlocking Australia’s technological potential. So I come back to the question: we have no intention of capping our revenue so why would we want to cap our R&D?
    Strong policy increases R&D investment. This shouldn’t be seen as a cost to the government but an investment in revenue generation.
    Scott Morrison made clear his concern when the Treasurer said “this incentive has been taken for a ride by some and integrity needs to be restored”.
    But surely the answer isn’t a cap — it’s about finetuning the rules or the eligibility requirements that are in place. There’s no point throwing out the baby with the bath water.
    If the government is concerned about the program being exploited, it should fix the eligibility rather than cap it.
    The capping will have long-term consequences for R&D in Australia — especially for technology companies that could easily be based elsewhere.
    Capping the incentive sends a signal the R&D incentive is always at risk. This is bad for investment.
    The Australian Advanced Manufacturing Council is clear on this point: “There is a vital need to provide certainty for companies’ long-term planning; continually cutting and changing the incentive sends an unfortunate signal to companies both here and overseas that the R&D concession is always at risk. The review accepts empirical research showing that countries investing significantly in R&D see better economic outcomes, particularly among small to medium enterprises.”
    Nuheara has just received more than $1.2 million for the year ending June 2017.
    Sure, the proposed cap won’t immediately affect us, but we have strong aspirations to exceed the cap based on our current trajectory.
    Even now, when we speak to manufacturing partners and competitors they question why we are based in Perth.
    When we respond by saying the government provides incredible support for R&D and provides 43.5c back for every eligible dollar invested in R&D, they get it.
    Cochlear, a fantastic Australian company with which we share technology, summed it up in its submission to the review of the R&D tax incentive: “The R&D tax incentive is critical to Cochlear’s overall R&D program and our predisposition to conducting this work in Australia. The incentive itself does not determine what we do as far as our innovation and R&D activities are concerned but it does have a significant influence on where we conduct these activities.”
    So my question to the government and the Australian people is: do we want to have jobs and investment in R&D in Australia, or overseas?
    Justin Miller is CEO of Nuheara.
 
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