Tuesday, June 29, 2010

R&D tax break farce: Business seeks clarification as Government fails to get new scheme in place for July 1 start date

Tuesday, 29 June 2010 10:24 James Thomson Smartcompany

Business groups are calling on the Federal Government to urgently clarify whether its controversial R&D tax credit scheme will come into force as planned on July 1, after the legislation backing the new scheme failed to pass the Senate last week.

But while the Australian Industry Group wants the Government to officially delay the implementation of the scheme until July 2011 and spend the next 12 months revising the scheme, Industry Minister Kim Carr says he is determined to press ahead with a July1 start-date, suggesting that he will introduce retrospective legislation when Parliament next sits.

The new R&D tax credit scheme, which will replace the current R&D tax concession scheme, was supposed to be debated and passed by the Senate late last week in order for the scheme to start as planned on July 1.

But the debate never occurred, leaving businesses in limbo.

In a short statement released yesterday, Carr laid the blame for the delay at the feet of the Coalition.

"The Opposition deliberately prolonged debate on other Senate business to prevent debate on the R&D legislation. It did this because it knew the Government was close to securing minor-party support for passing the legislation."

However, Australian Industry Group chief Heather Ridout praised the Opposition and Family First Senator Steve Fielding for standing against the changes.

The AIG argues the "draconian and ill-considered restrictions on eligibility" under the new scheme will reduce business innovation.

"Clearly the R&D tax incentive Bill didn't pass muster with its failure to pass through the Senate before the winter recess. The delay is a chance to get core concerns resolved and the sooner we start working through this the better."

However, the AIG and tax experts want clarification on what will happen in the short-term, given the next possible sitting of Parliament does not happen until late August, but could potentially be much later if an election is called.

Do the current rules stand for now? Or does Carr's promise to have the new system in place by July1 through retrospective legislation mean companies should make investment decisions based on the fact the new system could come into place?

Tracey Murray, partner at accounting firm BDO, is advising clients that they should take a "business as usual approach and follow the current scheme.

"We're advising clients that you deal with the legislation that is in front of you," she says.

Murray, whose analysis of the new credit scheme shows many firms who currently receive R&D support would be ineligible under the new arrangements, says the Government needs to take the year to get things right.

"There would complete public outcry if they introduced retrospective legislation. Hopefully the might take the next year to have a look at what those issues are and address them."

Tax counsel for the Institute of Chartered Accountants, Yasser El-Ansary, has written to the Treasurer and Industry Minister saying they have no choice but to put the new system off for a year and "accept that timing got away from them on this occasion".

"Given Parliament was not able to pass the legislation it would be sensible and appropriate for the Government to announce a one-year deferral of the regime," he says.

"These changes are so significant that it would not be appropriate for the Government to expect that taxpayers would assume that the draft is final law."

El-Ansary says such a big legislative change would usually involve government departments – in this case, Australian Industry Group – providing taxpayers with guidance notes and other information products explaining in detail how the new system works.

"They simply won't be able to issue that guidance when that legislation is still in a draft form before Parliament. This is not a minor change where businesses can operate on the basis of press release announcements."

SmartCompany has contacted the Minister's office to find out whether there is any official advice as to whether companies intending to undertake R&D in the next few months should do so on the basis of the current system or the proposed tax credit system.

Thursday, June 24, 2010

Ark Launches 2 Properties

Ark Total Wealth : taking you beyond what you thought possibleYour Exclusive Invitation to View 2 Exciting Properties

In the previous Ark Informers (May and April ), we highlighted the property markets we believe possess great fundamentals for strong capital growth.

We are now proud to launch two development projects we have sourced from the areas mentioned previously via a webinar on Wednesday 30 June 2010.

The Majestic Theatre Apartments, Petersham, NSW

A boutique 27 dwelling conversion of the historic Majestic Theatre set in the heart of Petersham’s ‘Little Portugal’ district.

With the vibrant Petersham restaurant and cafe scene at your doorstep, and only minutes away frothe historic Majestic Theatre set in the heart of Petersham’s ‘Little Portugal"; Norton Street - Leichhardt and King St - Newtown.

This development exemplifies the funky buzz of inner city Sydney living. Petersham train station lies a short stroll away and whisks you to the heart of the CBD in just over 10 minutes.

The discussion will include:
• Why the inner-west is the engine room of the Sydney Property Market

• Why the location of this development ticks all the boxes from a retail, transport, and employment infrastructure perspective

• An in-depth look at the strong potential yield, low running cost, excellent value for money, and distinctive point of difference this heritage listed building conversion offers.

The ‘Buffalo Apartments’, Brunswick, VIC

Buffalo is an exciting new boutique development at 3-5 Union Street, Brunswick. A new community will be created within a 4 storey sculptured building designed to feature a range of architect designed 1 and 2 bedroom apartments.
Living at Buffalo will offer a rich cosmopolitan lifestyle. Public transport is at the doorstep with tram services directly out the front; Jewel railway station a walk away and bus routes close by, not to mention direct freeway access is only a few minutes’ drive away.

The discussion will include;
• Why Brunswick is perfectly positioned for capital growth based on the key fundamentals of property growth

• Why The ‘Buffalo Apartments’ represent great value with Brunswick

• An in-depth look at the specific project from a holding cost and capital growth perspective

Please click here to register for the webinar at

Time: - 10am
Date:- Wednesday the 30th of June.

Following the webinar we will send out the specific research reports for each individual project and the slides.

Monday, June 07, 2010

In this Ark Informer "Investing in Equities", we discuss a short term strategy utilising specifically designed instalment warrants, as well as a long term stratgey of regular investing in quality equities.

This enables you to take advantage of the potential short term recovery in the market over the next year, without risking large amounts of capital or making long term commitments. (Maximising your upside using leverage, and minimising your cash flow downside).

If you believe that the share market will increase by more than 6% in the next 12 months, I encourage you to learn more about the RBS Global Access Instalments (GAS).

For those of you who haven't downloaded the ebook "Investing in equities", please feel free to do so.

There is also an excellent whitepaper written by Russell Investments and the ASX analysing asset classes over the past 10 and 20 years.

We are holding 2 Webinars in the next few weeks explaining this strategy
Thursday 10th June 10am and Tuesday 15th June 2pm.
If you require any further information, please don't hesitate to contact me.

Thursday, June 03, 2010


If you are unsure about interest rate increases over the next 2 or 3 years, we have an option to lock your rate in for 2 years at 6.99% or for 3 years at 7.19%

The offer is with one of the top five banks in Australia and is currently the cheapest 2 and 3 year fixed rate in the market.

This offer is only available for a limited time, so please call Michael or Danny at Liquidity Finance on
02 9290 2777 for a home loan health check and to see if this offer is right for you. (their details are below).

If you pass this on to a friend, which results in a referral, lunch is on me!!



Michael Luca and Danny Luu
Mortgage BrokersLevel 1
34 Hunter Street, Sydney NSW 2000
PO Box 54, Millers Point NSW 2000
P: +61 2 9290 2777
D: +61 2 9216 4023
M: 0405 113 543
F: +61 2 9262 5788
E: michael.luca@liquidityfinance.com.au