Tax cuts on income from Australian patents, funding for AI centres in federal budget

Tax cuts on income from Australian patents in the federal budget and an AI network could mean big opportunities for Lot Fourteen.

Innovation in the medical and biotech sectors will be rewarded with tax cuts on income generated by Australian-developed patents – triggering a lucrative opportunity for Adelaide’s research precinct.

A “patent box” starting on July 1 next year will result in income from homegrown patents in the two sectors being taxed at 17 per cent – about half that applied to large firms.

Treasurer Josh Frydenberg said extending the concession to the clean energy sector, another major South Australian industry, would be considered.

“Australia has led the world with innovations like Wi-Fi, the bionic ear and a vaccine for cervical cancer,” he said, in his Budget speech.

“We want to see more innovation commercialised in Australia.”

In another potential boon, North Tce’s Lot Fourteen is well positioned to capitalise on a new national network of Artificial Intelligence Centres.

Lot Fourteen, the former Royal Adelaide Hospital site, is already home to a machine learning centre, the Australian Space Agency’s headquarters and other hi-tech firms.

A $1.2bn Digital Economy Strategy includes the Artificial Intelligence Centres, designed to spur business adoption of the new technologies, and a cyber security innovation fund to train the next generation of experts.

Treasurer Josh Frydenberg said people had adapted quickly to pandemic-induced changes in work, shopping and communication and these trends would only accelerate.

“Digital infrastructure and digital skills will be critical to the competitiveness of our economy, creating massive opportunities for growth and jobs,” he said.

More than $124m will be allocated to boosting research and industry capability in artificial intelligence, which also will include a National Artificial Intelligence Centre led by CSIRO’s Data61.

Premier Steven Marshall has positioned Lot Fourteen as a hothouse for artificial intelligence, data analysis, space and other hi-tech industries.

Adelaide’s North Tce biomedical precinct is centred on the SA Health and Medical Research Institute (SAHMRI), the nearby universities and Royal Adelaide Hospital.

Tax concessions also will be unleashed in a bid to grow Australia’s share of the $250bn global digital games development market.

The Digital Games Tax Offset, to apply from July 1 next year, will provide eligible game developers with a 30 per cent refundable tax offset for Australian games expenditure, up to a maximum $20m.