The proposal is to include a collaboration premium of an additional 10 per cent in the calculation of research and development (R&D) tax offsets. This premium rate would be applied to expenditures for R&D undertaken in collaboration with public universities or Commonwealth Government‐funded research organisations (such as the Commonwealth Scientific and Industrial Research Organisation), and to the costs of employing new science, technology, engineering and mathematics (STEM) PhD or equivalent graduates in their first three years of employment to conduct R&D.

The collaboration premium rate would be applied to eligible expenditure in addition to the existing calculation of a company’s R&D offset.

The proposal would apply to companies from income years on or after 1 July 2019.