The Gaming Technology Association (GTA) has expressed disappointment over the “arbitrary exclusion” of the gaming sector from the Australian government’s scheme that provides tax incentives for companies to do R&D.
On Wednesday, gambling and tobacco companies were excluded from the R&D tax incentive scheme following the recent publication by the Australian Tax Office of its first transparency report, which included information on which companies benefit most from the R&D incentive scheme.
The report revealed that Tabcorp said it would spend A$39.5 million on local R&D in the 2021-22 financial year, while Aristocrat said it would spend A$22.1 million and Ainsworth A$15 million.
Gambling opponents pounced on the figures – despite them dwarfing the tax breaks claimed by other sectors – suggesting the industry was taking advantage of “loopholes” in the program. Against this backdrop, the government bought into the hype.
In its mid-year budget update, the government said that removing gambling companies from the program would save about A$10 million a year, with Treasurer Jim Chalmers saying it was wrong for taxpayers’ money to be used by industries that exacerbate addiction.
“Excluding these activities will ensure that the government is not subsidising this type of research and development,” Chalmers said.
In a lengthy statement following release of the budget update, GTA CEO Jinesh Patel said, “The Gaming Technologies Association (GTA) is disappointed in the Government’s decision to exclude the gaming sector from the Research and Development Tax Incentive (R&DTI) program. This decision will affect Australian businesses that have historically invested heavily in local research and development and job creation.
“The R&DTI program was established in 2011 by the Gillard Labor Government to encourage Australian businesses to invest R&D dollars locally to create jobs and maintain an R&D skills base, rather than investing offshore. The gaming sector has delivered on these benefits as the policy intended.
“No so-called ‘loophole’ was ever being exploited. All applicants for R&D tax credits are assessed independently by the Australian Tax Office and AusIndustry.
“The GTA and its members are working with all governments and regulators on harm minimization initiatives and reforms underway. Some technologies that were recently trialed in licensed venues have been developed through R&D dollars invested by GTA members.
“We note the Mid-Year Economic and Fiscal Outlook (MYEFO) statement which notes that activities relating to harm reduction will remain eligible for support. It is our expectation that the GTA and industry be consulted by the Treasurer to ensure all harm minimization initiatives are supported.
“At a time when the government has established a review into R&D to ‘enhance global competitiveness and secure future prosperity’, we are surprised that a decision would be made which works in the opposite direction. GTA believes that all Australian industries should be given the same opportunity under the R&DTI scheme without arbitrary exclusions.”
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