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A panel tasked with reviewing the impact of Australian research and development could seek changes to tax offsets offered to businesses, after years of complaints from the university lobby.

Submissions to the?Strategic Examination of R&D?have been published and reveal a ¡°common thread¡± in discerning the ¡°enormous potential for Australia to make its R&D system more efficient, effective and ambitious,¡± according to a?.

The 471 submissions to the review also betrayed ¡°frustration¡± at the ¡°proliferation of fragmented initiatives¡± and the ¡°excessive and cumbersome rules and regulations¡±.

¡°Our progress as a nation is hindered by the barriers, silos and cultural divides across academia, business and the investment industry,¡± the panel write in a foreword to the document, which offers ¡°high level insights and analysis¡± of the submissions. ¡°Incentives need to be better directed. We need public subsidies to be targeted to highest impact.¡±

Sources say the Research and Development Tax Incentive (RDTI) ¨C a mechanism that absorbs easily the most government R&D funding ¨C features heavily in the panel¡¯s deliberations, and the government is open to changes.

The RDTI provides tax offsets worth more than A$11 billion (?5.4 billion) ¨C more than double the combined annual allocations through the Australian Research Council, National Health and Medical Research Council, Medical Research Future Fund and research block grants ¨C for companies that undertake R&D.

The Australian Academy of Science says this largesse rewards companies for R&D that most intended to do anyway. ¡°Multiple reviews have shown that it is not meeting its strategic objectives,¡±?said?chief executive Anna-Maria Arabia.

In a recent?book, humanities doyen Graeme Turner said there was little evidence that the RDTI had done much to improve Australia¡¯s ¡°poor record¡± of business investment in R&D.

¡°It is not hard to imagine how the reallocation of A$12 billion to other parts of the research budget, every year, could make more of a difference than this incentive appears to have done,¡± Turner wrote.

The new document says the scheme is universally considered to be both ¡°vital¡± and riddled with shortcomings. ¡°All suggested that the incentive was not as effective as it could be. Despite its national reach, the current RDTI framework is widely regarded as administratively complex, particularly for emerging or resource-constrained firms.¡±

Suggestions for improvement included aligning the scheme with national priorities and allowing offsets for social sciences and humanities research. Others included a ¡°collaboration premium¡± to foster partnerships between businesses and research institutions, tax breaks for businesses that employ PhD students, and personal tax offsets for industry professionals undertaking PhDs.

A ¡°review of eligibility criteria¡± could broaden the scope of R&D fostered by the scheme, the document says. ¡°This would ensure genuine collaboration rather than merely outsourcing to consultants.¡±

The summary document also notes ¡°differences in views between sectors on the utility of the RDTI¡±.

There are also differences in views over the scheme¡¯s application. The Australian Taxation Office is auditing a prominent poultry producer over some A$50 million of RDTI offset claims for R&D related to chicken feed,?.

The government has also??most of the submissions. In the coming weeks, the panel intends to release ¡°issues papers further exploring the evidence and the possible future directions for reform¡±. The?final report?and recommendations are due to be handed to the government later this year.

john.ross@timeshighereducation.com