Gambling Activities to Be Excluded from Australia’s R&D Tax Incentives Starting 2025
The Australian government has confirmed a policy change that will exclude gambling and tobacco-related activities from eligibility for the Research and Development (R&D) Tax Incentive, effective 1 July 2025.
Key Policy Changes
Outlined in the Mid-Year Economic and Fiscal Outlook, the amendment aims to disqualify activities tied to gambling and tobacco from receiving tax offsets under the R&D Tax Incentive program. According to government statements, the exclusions are intended to mitigate the risks of addiction, associated harms, and health challenges posed by these industries.
Eligible harm-reduction research, such as addiction treatment studies, will remain supported by the program. The financial impact of the changes is projected to include AU$12 million in additional government receipts and AU$8 million in reduced payments over a five-year period starting from 2023–24.
Current Program Management and Legislative Next Steps
The R&D Tax Incentive currently provides tax offsets to Australian companies undertaking qualifying research and development activities to foster innovation and economic growth. While the exclusions await legislative approval, the Department of Industry, Science and Resources and the Australian Taxation Office will continue managing the program under its existing framework.
Industry Response and Criticism
Responsible Wagering Australia (RWA), a leading industry body, has criticised the government’s decision. RWA CEO Kai Cantwell warned that the policy could have far-reaching consequences for Australian jobs, innovation, and the economy.
Cantwell described the exclusion as a potential shift away from sector neutrality in tax policy:
“The government’s announcement sets a dangerous precedent for how tax policy could be misused in the future. Today it is gambling companies, but any industry could be next if it’s used as a bargaining chip or horse-traded in future political deals.”
He also highlighted concerns that the move could encourage R&D investments to shift to countries with more favourable tax policies, potentially stifling local innovation.
Calls for Engagement
The RWA has urged the government to consult with gambling industry stakeholders to explore balanced solutions that safeguard both consumer protection and economic growth.
“We will continue to invest in consumer protections, with or without government support. Australian technology and innovation are world-leading, driving local growth and being adopted by global companies,” Cantwell added.
The government has yet to respond to the calls for dialogue or to clarify whether further adjustments to the policy may be considered.