Multimillion dollar shortfall in FBR's R&D funding

As many of you are aware, the Federal Government recently announced a number of changes to the R&D Tax Incentive program. One of the major changes directly affecting FBR included capping refundable offsets at $4 million per income year.

The proposed changes were included in the Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures Bill 2018.On 18 October 2018, the Senate referred the bill to the Economics Legislation Committee for inquiry and report by 3 December 2018.

As a part of the inquiry process, stakeholders were invited to submit their views/opinions to the committee.

FBR was one of the companies to submit a response to the proposed changes. Of interest are the following quotes from FBR's submission;

• "Based on our latest modelling this will leave a multimillion dollar shortfall in Fastbrick’s R&D funding and retrospectively changed the nature of the investment proposition for approximately 12,000 Australian shareholders"
• "The proposed changes also brings into question for FBR whether Australia is still the most viable place for the R&D and commercialisation of FBRs Australian technology going forward."

It will be interesting to see what effect this has on the companies cash position and whether the "multimillion dollar shortfall" will necessitate further capital raises. Furthermore, will we see FBR move its operations offshore?

A public hearing on the proposed R&D Tax Incentive changes is taking place today in Canberra. FBR is not presenting.

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/TLABMultinationalsTax/Submissions