The R&D Tax Incentive is the single largest program supporting startups in Australia, but shifts in the way the RDTI operates have increasingly made it unreliable for software companies. This is undermining a bedrock platform of government support for the sector. A growing number of companies are facing serious financial challenges as a result, breeding uncertainty about the future of the program for startups.
This problem has developed in part because the model used in the RDTI assessment process is not well adapted to the process of software development. This has led to a situation where, despite support for software R&D being one of the main reasons for introducing the scheme in 2011, it is becoming increasingly difficult for companies to claim for software development activities.