A set of significant RDTI reform recommendations has been released as a part of the Ambitious Australia: Strategic Examination of Research and Development final report
https://www.industry.gov.au/publications/ambitious-australia-strategic-examination-research-and-development-final-report
Here's a summary of what's proposed and some observations:
Rec 5a — General simplification
Introduce a deemed rate for supporting activities, raise the minimum expenditure threshold from $20k to $150k, and remove clawback provisions. The $150k floor would exclude many smaller businesses that currently access the scheme which would be detrimental.
Rec 5b — Premium startup stream
A new stream offering a refundable offset at the corporate rate +23.5%, with quarterly advance payments and broader eligible expenditure (including commercialisation, deployment, and user testing). Eligibility is gated by a 100-point style test covering VC investment, accelerator participation, IP ownership, and university collaboration. Access is capped at 3 years, with reapplication available for long-cycle sectors like pharma. The eligibility criteria may effectively exclude bootstrapped or regionally funded startups that may be equally innovative but lack formal VC or accelerator backing.
Rec 5c — SME thresholds
Increase the refundable offset turnover threshold from $20M to $50M, and tie ongoing eligibility to revenue growth outcomes. Businesses in stable but R&D-intensive sectors — not characterised by high revenue growth — may find themselves cycled out of support under the proposed on/off-ramp conditions.
Rec 5d — Large company incentives
Remove the $150M R&D expenditure cap and the intensity premium, align the large-company offset rate with the current SME rate, make first-contract procurement from startups RDTI-eligible, and remove the RDTI offset from franking credit calculations.
Rec 6 — Collaboration vouchers
Introduce a voucher program for businesses ineligible for the RDTI, funding R&D projects up to $150k in collaboration with universities or public research institutions. Businesses already accessing the RDTI would be excluded.
Rec 7 — Production tax credit
Proposes a production and commercialisation credit or subsidy to retain advanced manufacturing activity in Australia following domestic R&D. The design detail here is thin.
These are proposals at this stage, not settled policy. The overall direction — concentrating support on high-growth firms and large corporates while raising the floor for general access — represents a meaningful shift in how the scheme distributes benefit across the business population and feels like it may disadvantage startups that rely on the R&D Tax Offset over a longer period. The government is now considering the recommendations and looking for industry reaction to the report before taking action.