The Saint is not backward in coming forward to bash the pollies. And let’s be honest, they do little to prevent themselves being an easy target. For example, your correspondent recently lambasted the SA Government for cutting funding to Innovate SA - an organisation dedicated to providing mentoring and training for startups and mature companies alike.
But this week comes evidence that Prime Minister Julia Gillard - who, according to the Sydney Morning Herald, “faces the fight of her political life to try to reconcile the public to her deeply unpopular [carbon] tax” that was launched on 1 July – is doing something positive to assist the country’s non-mining industrial sector. That help comes in the form of a revised scheme for R&D support.
Electronics News reports that Australian clean-tech company Dyesol will be one of the firms to benefit from the scheme. The company is due to receive a tax rebate valued at around $3 million in the next few months. The cash comes from the Australian Government’s R&D tax incentive that replaced the earlier R&D tax concession just over a year ago.
The R&D tax incentive provides a refundable offset for smaller companies (with under $20 million turnover) for eligible activities that improve the range and competitiveness of their goods or services. Larger companies can also get the offset, but at a lower rate.
Some independent industry experts say that Prime Minister Gillard is doing the right thing with the incentive scheme.
“Australia is a world leader in R&D tax incentives,” claims David Gelb , Lead Partner, R&D Tax Incentives, KPMG in Australia. “[The scheme that was introduced on 1 July 2011] is looked at by many other governments. [For example] the Singapore Government introduced a scheme modelled on the Australian version and very quickly [saw benefits].
“The [new Australian] scheme now offers a higher rate and an additional incentive for multinational companies to invest in R&D in Australia,” says Gelb.
(It’s seems churlish to mention that Gelb says in passing that Singapore has recently increased the offset to 400 percent, but your correspondent has done so because that generosity does tend to make Australia’s 45 percent rate look a little miserly.)
However, not everyone agrees with KPMG’s Gelb. The South Australian Government’s ‘Thinker in residence, Professor Goran Roos, for example, says the R&D tax incentive scheme is flawed and open to abuse.
“None of the top performing R&D countries in the world have R&D tax credits,” said Prof Roos in an article in The Australian.
“One of the reasons is that, with the exception of very few companies, most companies actually see the way it works and look at it as free money. They then reclassify overheads and other things to call it R&D and then they get some free money. It is a very common practice. What happens when they do that is, of course, they report more R&D, they don't do more R&D.
“It basically doesn't work,” concludes Prof. Roos in the item.
Perhaps Treasurer Wayne Swan has been listening to Prof. Roos, because even as Julia Gillard looks to shore up her support from industry, Swan is moving the sentiments of larger firms in the other direction by considering cutting their R&D tax incentives.
Or perhaps Swan is just reverting to type. State and Federal politicians alike have an unenviable track record of giving with one hand and very soon after taking away with the other. One only has to look at the rapid reversals on solar power subsidies for a prime example.
Despite Prof. Roos negativity about the R&D tax incentives scheme, the Saint is keeping his fingers crossed that Wayne Swan will at least avoid tinkering with the parts that are targeted at companies with a turnover of less than $20 million, such as Dyesol. In the current economic environment, and with Australia’s non-mining industrial sector in turmoil, these smaller firms need all the help they can get.
Your correspondent just hopes that, like Dyesol, recipients of tax payers funds actually use them for the purpose intended – investing in R&D to make better Australian products and services that’ll improve the country’s balance of payments.
What’s in a name? (Part 2)
In a recent column your correspondent had some fun at the expense of a few companies that perhaps could have thought a little harder about their product names before releasing them to a disingenuous public.
An item published in Electronics News week brought the subject back to the Saint’s attention. But this time it’s not about amusing interpretations of product names (for example, Barf from Paxan), rather the “i” prefix naming phenomenon.
The report notes that Apple has been forced to stump up US$60 million ($58.5 million) for the legal rights to use the iPad name in China.
Apparently, the California-based consumer electronics company was in a legal battle with Shenzhen Proview Technology, which had trademarked the iPad name in the country before Apple announced the tablet product.
Apple (which has thus far avoided any unusual product names – unless you count the Lisa) has also considered litigation against products that sport the i-prefix, but has been told it has no legal right to exclusive use of its vaunted prefix.
It seems the prefix is just too generic to trademark. According to a popular online encyclopaedia, for instance, the i-prefix “[is added] to a wide range of existing words to form new, Internet-related flavours of existing concepts”. (According to the same source, Apple itself said that the “i” stood for “Internet” when it launched the iMac.)
The prefix shows no sign of fading away in the near future. In 2009, for example, “i” was chosen by the BBC website’s Magazine readers as one of 20 words that defined the last decade.
The Saint, always one to look for ways to keep his image meeting the expectations of Electronics News tech-savvy readership, has approached the Editor for an update to this column’s title. But somehow he doesn’t think the boss will be letting “iSaint Solder” feature here anytime soon.