The Claim
“Scrapped a body which provides advice on over $1 billion in tax breaks that are designed to encourage Research and Development, despite promising during the election to improve incentives for Research and Development investment.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The claim is PARTIALLY TRUE but contains significant inaccuracies and misleading framing.
What actually happened:
The body was abolished: The Coalition government did abolish the R&D Tax Incentive Advisory Committee in April 2014, as confirmed by SBS News and news.com.au reports [1][2].
The committee was established by Labor: The committee was created by the previous Labor government, not an independent or long-standing body [1][2].
The $1 billion figure: The R&D tax incentive program involves approximately $3 billion annually in tax breaks (as of 2014), not merely $1 billion [3][5].
The Coalition's election promise: The Coalition's 2013 election policy did include a promise to "examine the effectiveness of existing tax incentives and develop recommendations for improving the incentive regime for innovation and R&D investment" [1].
Key factual issues with the claim:
The claim states the body was abolished "despite promising...to improve incentives" - but the Coalition did introduce R&D tax incentive cuts in the 2014-15 Budget, proposing a 1.5% reduction in offset rates (from 40% and 45% to 38.5% and 43.5%) [4][6]. These cuts were projected to save $550 million over four years [6].
The Abbott government's 2014 budget cut the R&D Tax Incentive scheme by 1.5%, meaning an estimated $70 million per year less would be available for Australian companies to claim [7].
ABC Fact Check confirmed in October 2014 that government spending on science, research and innovation had been cut to an "historic low" of 0.56% of GDP - equal to the record low from 1988-89 and lower than when records began in 1978-79 [3].
Missing Context
1. The committee was a recent Labor creation
The claim omits that the R&D Tax Incentive Advisory Committee was established by the Labor government, making its abolition a political decision to remove an advisory body created by the previous administration. The Coalition argued it was reviewing the entire R&D system rather than maintaining a committee established by its political opponents [1][2].
2. The Coalition's rationale
Industry Minister Ian Macfarlane stated that "operating within a difficult fiscal environment, the government committed substantial new funding in support of science, research and innovation" while highlighting the Medical Research Future Fund, dementia research funding, and continued R&D tax incentives [3]. The government positioned this as fiscal responsibility rather than abandonment of R&D support.
3. Broader budget context
The 2014-15 budget included widespread cuts across government programs as part of the Coalition's budget repair strategy. The R&D changes were part of broader austerity measures, not isolated attacks on research [6][7].
4. The cuts were later blocked
The proposed 1.5% cuts to R&D tax offsets were defeated by the Senate in March 2015, meaning they were never implemented [6]. This critical context is missing - the "cuts" were proposed but not enacted due to parliamentary opposition.
Source Credibility Assessment
The original source is news.com.au, a News Corp Australia outlet. While a mainstream media source, news.com.au has faced criticism for sensationalist headlines and coverage. The article appears to be a straightforward news report of the committee's abolition, but the framing as presented in the claim is more negative than the original article likely intended.
The archived link (web.archive.org) suggests this is being presented as historical evidence, but the claim adds interpretive framing not present in the original reporting.
Labor Comparison
Did Labor do something similar?
Yes - Labor also made significant changes to R&D tax policy, and in some cases, more substantial ones:
Labor's 2012 R&D reforms:
The Gillard Labor government introduced major reforms to the R&D tax concession in 2012, replacing the R&D Tax Concession with the R&D Tax Incentive. These changes:
- Reduced the general R&D tax concession rate from 125% to 100% (plus a 30% tax offset for large companies and 45% refundable offset for small companies) [8]
- Were projected to save approximately $1.8 billion over four years [8]
- Faced significant criticism from business groups and the innovation sector
Irony of the claim:
The Labor government that established the advisory committee also implemented larger cuts to R&D tax benefits than those proposed by the Coalition. The Coalition's proposed 1.5% reduction (which was blocked) was smaller than Labor's 2012 reforms.
Labor's 2016 position:
In a notable reversal, Labor leader Bill Shorten announced in June 2016 that if elected, he would implement the Coalition's stalled R&D tax incentive cuts - the very same cuts he had previously opposed [6]. Shorten projected this would have a positive budget impact of $2.8 billion over 10 years.
Pattern across both parties:
Both Coalition and Labor governments have sought to reduce R&D tax expenditure when facing budget pressures. This is a bipartisan pattern of treating R&D tax concessions as a budget line item that can be adjusted for fiscal purposes, rather than a sacrosanct innovation policy.
Balanced Perspective
The full story:
The Coalition did abolish the advisory committee established by Labor, and this can be seen as dismantling oversight mechanisms for over $3 billion in annual tax incentives [1][2][5].
However, the Coalition proposed relatively modest changes compared to Labor's 2012 reforms. The proposed 1.5% cut was smaller than Labor's previous reductions, and ultimately was blocked by the Senate [6][7].
The claim's framing is misleading in suggesting the Coalition uniquely undermined R&D support. ABC Fact Check confirmed the Coalition cut science and research spending to historic lows [3], but Labor also implemented significant R&D tax concession reductions when in government.
The advisory committee's abolition can be viewed either as:
- Removing oversight for billions in tax breaks (critical view)
- Streamlining government and reducing bureaucratic overhead (supportive view)
- Eliminating a body created by political opponents (cynical view)
Both parties have treated R&D tax policy as negotiable when budgets are tight. This is not a unique Coalition failing but a systemic issue in Australian innovation policy where research funding is often the first target for savings.
International context:
Australia's government R&D spending as a percentage of GDP (0.441% in 2013) ranked 18th out of 20 OECD countries, ahead of only Greece and the Slovak Republic [3]. This underfunding predates the Coalition government and reflects long-term underinvestment by both major parties.
PARTIALLY TRUE
5.0
out of 10
While factually accurate that the Coalition abolished the R&D advisory committee, the claim omits critical context that:
- The committee was established by the previous Labor government
- Labor itself implemented larger R&D tax cuts when in government (2012 reforms)
- The Coalition's proposed 1.5% cuts were blocked by the Senate and never implemented
- Both parties have treated R&D tax policy as adjustable for budgetary purposes
The claim presents this as a unique Coalition failing, when in reality it represents bipartisan treatment of R&D policy as a budget adjustment mechanism. The framing is designed to portray the Coalition as uniquely hostile to R&D, when Labor has implemented similar or larger reductions.
Final Score
5.0
OUT OF 10
PARTIALLY TRUE
While factually accurate that the Coalition abolished the R&D advisory committee, the claim omits critical context that:
- The committee was established by the previous Labor government
- Labor itself implemented larger R&D tax cuts when in government (2012 reforms)
- The Coalition's proposed 1.5% cuts were blocked by the Senate and never implemented
- Both parties have treated R&D tax policy as adjustable for budgetary purposes
The claim presents this as a unique Coalition failing, when in reality it represents bipartisan treatment of R&D policy as a budget adjustment mechanism. The framing is designed to portray the Coalition as uniquely hostile to R&D, when Labor has implemented similar or larger reductions.
📚 SOURCES & CITATIONS (8)
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1
Govt axes tax break oversight body - SBS News
A committee set up by Labor to oversee research and development tax breaks has been abolished by the coalition government.
SBS News -
2
Govt axes tax break oversight body - news.com.au
News Com
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3
Fact check: Science, research and innovation spending cut to 'historic low' - ABC News
Greens deputy leader Adam Bandt says the Federal Government has cut spending on science, research and innovation to an "historic low". ABC Fact Check finds his claim checks out. It's estimated research and development spending will be 0.56 per cent of GDP in 2014-15, which is the lowest level in decades.
Abc Net -
4
Shorten to resuscitate Abbott's 2014 R&D tax incentive cuts - ZDNet
If chosen as Australia's next prime minister, Bill Shorten has promised to pass the Liberal Party's stalled R&D Tax Incentive, originally announced as part of the 2014-15 Budget.
ZDNET -
5
Research and development tax incentive - Australian Taxation Office
Ato Gov
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6
Cuts to Australian R&D tax offset voted down by Senate - ZDNet
A proposal by the government to cut Australia's R&D tax offset rate by 1.5 percent has been defeated in the Senate, with the Labor opposition calling the move a win for innovation among local small and medium-sized enterprises.
ZDNET -
7
Startups urge the Abbott government to stay away from the R&D tax incentive - SmartCompany
The Abbott government shouldn’t reduce the R&D tax incentive if it is serious about growing the startup ecosystem, according to the founder of a
SmartCompany -
8PDF
Taxation deductions available for R&D expenditure in Australia: Past and present - ANU Crawford School
Crawford Anu Edu • PDF Document
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.