Revelations of rorting raise doubts about the integrity and effectiveness of the federal government's biggest industry innovation scheme, and highlight the overall need for rigorous regulation of spending and taxing.
An investigation by Fairfax Media shows the Research and Development (R&D;) Tax Incentive program, which delivers about $3 billion in tax offsets to businesses each year, transferred large amounts of taxpayers' money to people who distorted and/or concealed their circumstances, and whose subterfuge was readily discoverable.
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A federal government scheme introduced to encourage Australian companies to invest in R&D; has had millions of dollars have been rorted through the program.
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Millions rorted from government R&D; scheme
A federal government scheme introduced to encourage Australian companies to invest in R&D; has had millions of dollars have been rorted through the program.
To be sure, the primary problem is people making false claims on a publicly funded program. That suggests administration can be improved. Our investigation also indicates improvements, to say the least, are needed in vetting and grant criteria.
The uncovered rorting is egregious, and merits official consideration, public debate and perhaps policy and legislative changes. Attempts should be made under the law to recoup misappropriated money.
The R&D; scheme rorting is also a reminder of the need for potent enforcement of probity – on the part of those who pay tax, those who receive taxpayer-funded payments, and of lawmakers and regulators. Dishonesty and desperation are inevitable in some measure, but their effects can be minimalised by well-considered, assiduously applied laws and policies.
Our social, economic, political and judicial systems are underpinned by trust, and most people are honourable. But, as appears to be the case with the R&D; scheme rorting, people do manipulate state-sponsored investment incentives, and do break tax laws, enriching themselves at the expense of those who end up having to pay more than their fair share.
Photo: Jessica Shapiro
The R&D; rorting story is ultimately one of citizens ripping off other citizens via a government program. Vigilance, and perhaps regulatory adjustment, is required at many levels. There has been ample evidence of lawmakers abusing their taxpayer-funded entitlements, of inappropriate political funding, of a massive black economy, of multinational corporations dodging tax, of union officials ripping off their members, and of tax  avoidance via superannuation, family trusts, property speculation, offshore financial havens and premium financial counsel.
Trust, again, is fundamental to our lives. It would be appropriately buttressed by a federal anti-corruption commission, we have argued. Such watchdogs are proving beneficial at the state level. We do not necessarily need more laws – and could perhaps do with fewer – but we do need to constantly monitor that we have appropriate laws, and that they are well enforced.
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