A government-led Senate committee has called for the research and development tax incentive to be paid quarterly, and for a new standalone scheme for software-related claims to be considered.
The Senate Select Committee on Financial Technology and Regulatory Technology tabled its second report on Wednesday with 23 recommendations to government around taxation, the Consumer Data Right, blockchain and visa issues.
The committee was established in late 2019 and is chaired by Liberal Senator Andrew Bragg.
The research and development tax incentive (RDTI) was a central issue through the committee’s inquiry, and was a core focus of its first report last year.
In the latest report, the committee has recommended that the government amend the RDTI to allow for different assessment methodologies to be used, and for quarterly payments to be made to applicants. Currently, applications to the RDTI are paid yearly.
Significantly, the committee has called on the government to consider the establishment of a new scheme which would handle only software-specific R&D claims.
“The committee is recommending that different assessment methodologies be allowed under the RDTI scheme, and that consideration also be given to a standalone scheme for software development,” the committee’s report said.
“The timing of RDTI payments was also raised with the committee, with the suggestion that payments be changed from annual to quarterly to assist with cash flow for businesses without increasing the overall cost of the scheme. This is a sensible measure that would provide important support to new startups.”
The committee also made a number of recommendations around Australia’s skilled visa systems, including for a review into the global talent visa and Hong Kong visa arrangements to “ensure international competitiveness”.
This review would consider salary caps, age thresholds, turnover requirements and key criteria.
The government should also provide “clearer policies and guidelines” on the target sectors for these schemes, and consider introducing more permanent residence visa options for employees of high-value businesses relocating to Australia, the government-led committee said in its report.
The government’s approach to promoting Australia as a destination for international talent in fintech should also be reviewed, it said.
In terms of the Consumer Data Right, more efforts need to be made to increase international participation in the scheme and ensure interoperability with other regimes, the Senators said.
The government should also look at establishing a “rules as code” innovation hub and regulatory sandbox for legal coding approaches to Commonwealth legislation and regulation, the committee said.
The report marks the end of the fintech inquiry. In late March the Senate voted to expand the committee’s scope and length and rename it to the Select Committee on Australia as a Technology and Financial Centre.
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