CSIRO research indicates that for every $1 spent on R&D, the economy receives $3.50. Photo: Tatiana Mara.
The Business Council of Australia (BCA) has outlined a path to improve Australia’s lagging productivity, with a broad strategy that includes industry and government.
In recent months, the BCA has been urging the newly re-elected Albanese Federal Government to make productivity a focus of the next three years, a sentiment echoed by Treasurer Jim Chalmers just days after his government’s victory.
The BCA has outlined numerous methods to increase productivity, stating that businesses want to improve efficiency, invest more and generate growth.
At the core of this strategy is a call for research and development (R&D) to become a national strategic priority, an increase in private and public investment to 3 per cent of GDP and the creation and development of a new 10-year R&D strategy.
“Supercharging research and development investment in Australia presents a significant opportunity for business and the government to lift productivity and raise living standards for all Australians,” BCA chief executive Bran Black said.
“We need a new approach to R&D that starts with incentivising businesses to invest more, otherwise investment opportunities will go overseas and we will fall further behind.”
In support of these broader goals, the BCA has outlined the following priorities:
- Create tailored incentives to attract new R&D activities to Australia from abroad and further incentivise the commercialisation of R&D outputs domestically, including through preferential tax treatment for income derived from Australian intellectual property.
- Alter tax settings regarding R&D, review the definition of R&D and abolish the tax incentive threshold or increase it to $250 million.
- Develop a public, open and accessible National Researcher Directory to help connect industry with research expertise.
- Establish a coordinated network of industry-led R&D centres, modelled on the Catapult Network, a British initiative which contributes £5.50 in GDP uplift for every £1 invested.
The OECD average for R&D development is 2.7 per cent of GDP, while Australia’s investment is just 1.7 per cent. The BCA has cited CSIRO analysis indicating that for every $1 spent on R&D, the economy receives a return of $3.50.
The BCA said in the same statement that the strategy should build upon Australian strengths such as resources, health, renewables and agriculture, while also breaking into relatively new fields like AI, battery tech, cyber and quantum.
“R&D is crucial to ensuring we have a future made in Australia, expanding our current industries and opening up new sectors like quantum, advanced manufacturing, cyber and artificial intelligence,” Mr Black said.
“We need a national R&D strategy that helps incentivise businesses, researchers, investors and government to work together to overcome our biggest challenges, like the energy transition.”
