The treasurer has announced Australia’s manufacturing sector will play a key role in securing Australia’s recovery and additional government support will be provided.
In his budget speech yesterday, Josh Frydenberg stated that the government has backed manufacturing with the Modern Manufacturing Strategy and will continue to support the sector.
“That is why we have already committed $1.5 billion to expand manufacturing activity and create jobs across six priority areas, including medical products and clean energy. We backed in our Modern Manufacturing Strategy with an additional $2 billion in R&D tax incentives,” said Mr Frydenberg.
Innovation was a key focus of the budget, with the treasurer announcing the ‘patent box’.
“With an additional $2 billion in R&D tax incentives. Australia has led the world with innovations like WI?FI, the bionic ear and a vaccine for cervical cancer.”
“We want to see more innovation commercialised in Australia… And so tonight, we are launching a new ‘patent box’ starting on 1 July next year… Under the patent box, income earned from new patents that have been developed in Australia will be taxed at a concessional 17 per cent rate – almost half the rate that applies to large companies,” Mr Frydenberg added.
According the Sydney Morning Herald, the “patent box” tax breaks are similar to those offered by more than 20 countries including Britain and France, and are expected to cost $100 million a year. The government is also considering to expand the scheme to clean-energy technologies, including large-scale batteries, hydrogen or renewables.
The patent box will apply to the medical and biotech sectors and we will consult on expanding it to the clean energy sector.
“Mr. Speaker, a resilient Australia requires diverse and reliable supply chains. That is why we are providing additional support for Australian manufacturers of critical products,” Mr Frydenberg added.