[LINK] Gittins on the IT record...

[Tim Josling]

Two other problems here:

1. R&D creates benefits for the company and for the wider
community. But without tax concessions the company pays all the
cost, and we will under invest in R&D. The classic economic
problem of externalities. 

2. The tax dept has a very aggressive attitide to writing of R&D
even with normal depreciation. If the R&D is for a new line of
business the costs are not deductable. Ever. Any profits that
result are fully taxable of course.

People do respond in pretty straightforward ways to the
incentives you place in front of them,

Tim Josling


Glen Turner wrote:
> 
> richard@auscoms.com.au wrote:
> > I have to agree here. When I hear arguments that governments should pay business
> > to become more profitable (by investing in "innovation"), I ask "isn't that what
> > the business should be doing already?"
> 
> >From my experience in working in public sector research and
> private sector electronics and software development, the
> problem usually isn't government failing to foster innovation,
> but the government actively being hostile to innovation.