Good Morning, Archer welcomes the Australian Government’s fiscal response to the COVID-19 pandemic in its Budget 2020-21, with refinements to the R&D tax incentive (RDTI) being positive. The Government forecasts economic activity to pick up strongly from late 2020 and into early 2021. The reform package would commence on 1 July 2021.
Some key benefits that may directly apply to Archer in the Budget 2020-21 include the Government’s $2 billion investment through the RDTI, and involves:
- Lifting of the $4 million cap on RDTI cash refunds
- An 18.5% refundable R&D tax offset above the Company’s tax rate, which is a 5% increase in the refundable component of the RDTI to 48.5%.
Some key benefits that may indirectly apply to Archer in the Budget 2020-21 include:
- $1.5 billion Modern Manufacturing Strategy focused on bringing business research collaboration at scale
- An additional $1 billion injection of funding in 2021 to support research at Australia’s universities hit badly by the pandemic
- A further $965.6 million for Australia’s national science agencies, in particular CSIRO, BOM and ANSTO over four years
- Larger companies incentivised to raise their R&D investments beyond 2 per cent of their expenses
The Australian Government Budget policies will support early-stage tech companies like Archer to grow and be even more resilient as the Australian and global economies roll out responses to counter the economic impacts of COVID-19.
The announcements made by the Government last night provide Archer and its shareholders with certainty and confidence to continue moving forward with our strategy to develop and commercialise innovative deep tech.
Dr Mohammad Choucair, FRACI FRSN GAICD
Chief Executive Officer
Archer Materials Limited (ASX:AXE)