The federal government have announced a cap on the R&D tax incentive program, following a review of the $3 billion incentive aimed at encouraging Australian companies to invest in technological advancement.
Adrian Griffin from Lithium Australia says the $4 million cap on R&D refunds has the potential to extinguish the current opportunity for Australian companies to design and manufacture lithium batteries within the state. It is estimated that a potential 93 000 jobs and $56 billion in economic benefits could be at risk, should the government hold their stance on the current tax offset rulings.
ASX-listed Lithium Australia is the first non-Chinese producer of rare earth dysprosium and relies heavily on the grant, stating “a large proportion of the funding package revolved around the R&D rebate”.
Resources and Northern Australia Minister Matt Canavan dismissed Mr Griffin’s doubts, stating that the majority of companies that utilise the incentive would not reach the cap. He also said that the government is committed to supporting the lithium and battery industry in Australia, however the decision to establish a battery manufacturing capabilities could only go ahead if it was financially viable.