Don't sideline digital: FinTech Australia calls for AI, cybersecurity and fintech to be named in R&D Tax Incentive review
FinTech Australia is urging the federal government to explicitly recognise digital technology - including fintech, AI and cybersecurity - in the Strategic Examination of Research and Development (R&D) now underway.
The peak body has lodged a submission to the expert panel led by Tesla chair Robyn Denholm, with LaunchVic CEO Kate Cornick also on the panel. The review released six discussion papers this year; the final two focused on foundational research and government as an exemplar. The panel received 471 submissions.
Why it matters for government
Digital technology is absent from the current list of five priority areas for long-term R&D focus: defence, health, agriculture, energy and resources. FinTech Australia warns this could crowd out innovation in software-led sectors where Australia is competitive.
CEO Rehan D'Almeida cautioned that standout fintech work unique to Australia may not fit neatly under the proposed settings. His message: if "digital" isn't named, it risks being overlooked in funding and policy decisions.
The R&D Tax Incentive is doing heavy lifting
The R&D Tax Incentive (R&DTI) provides refundable offsets for small businesses and non-refundable offsets for larger companies to encourage work that wouldn't otherwise get funded. It has become a critical bridge for early-stage development and a material support for scale-ups.
Recent data shows Atlassian again led Australian claimants with more than $220 million in eligible R&D expenditure in FY2023, with Seek, Technology One and Cochlear among the top 20. More than 6,000 small businesses - around half of 12,956 claims - shared in $16.2 billion of eligible spend, with an average claim of $403,232. Program details: Research and Development Tax Incentive.
What FinTech Australia is asking for
- Name digital technology - including fintech, AI and cybersecurity - as a national R&D focus area.
- Modernise the R&DTI to reflect software-led, agile R&D methods and outputs.
- Introduce sector-specific eligibility settings for high-growth digital startups.
- Reform the Early Stage Venture Capital Limited Partnership (ESVCLP) program to improve domestic capital formation.
- Ensure enabling sectors like fintech aren't squeezed out by narrow definitions or funding allocations.
- Keep RD&I policy predictable and simple so founders and investors can plan with confidence.
ESVCLP friction points are well known
Many angel and seed investors view ESVCLP settings as too complex, with heavy reporting, rigid eligibility and limited flexibility on key rules. FinTech Australia's position is that these frictions reduce the flow of local capital to early-stage tech - exactly where Australia needs more momentum.
What policymakers can do next
- Explicitly recognise digital as an enabling focus area across all priority domains.
- Publish clear software R&D guidance and examples to reduce uncertainty in claims.
- Test sector-specific criteria that better capture modern, iterative software R&D.
- Streamline ESVCLP compliance and widen eligibility to attract more domestic early-stage capital.
- Coordinate settings across R&DTI, investment programs and procurement so signals are consistent.
The core issue is simple: software is now the engine inside every priority sector. If policy doesn't name it, funding and capability follow elsewhere. Recognising digital explicitly - and updating the rules to match how modern R&D actually happens - will help protect Australia's edge in fintech, AI and cybersecurity while strengthening outcomes in defence, health, agriculture, energy and resources.
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