Albanese government cuts research tax breaks for startups after 10 years
Federal government will cut research tax breaks for small businesses after ten years, saving $590 million by 2030.
From June 2028, the federal government will stop small firms accessing generous research tax offsets once they turn ten years old. Medicine companies get fifteen years.
About more than 13,000 Australian companies currently claim the R&D tax incentive, costing the budget $4.3 billion a year. The new rules also raise the threshold for larger firms from $20 million to $50 million turnover.
The government plans to stop firms claiming tax breaks for support activities like equipment maintenance. Startup companies and life science firms developing medicines would be hit hardest.
Some face tax offset cuts of up to 60 per cent. The bill passed the lower house and faces a Senate vote this month.
Coalition MPs are expected to vote against it.
- 13,000+
- Companies claiming incentive
- $4.3 billion
- Budget cost per year
- $590 million
- Proposed savings by 2030
- 10 years
- Age limit for small firms
Why it mattersIf it passes, Australian startups and early-stage research companies will lose crucial tax-funded support when they are scaling up and most need it, potentially slowing innovation.
AustraliaAustralian research spending is already below the OECD average; these cuts could further discourage innovation investment and slow the growth of Australian biotech and science startups competing globally.
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