RDTI24 An analysis of the Research & Development Tax Incentive Transparency Report data from FY2023-24

This is the third year we have published what the Transparency Report data truly shows. But this year, it matters more than usual.

Treasury's exposure draft of the 2026-27 Budget R&D changes closes for comment on 28 September. This report is the most recent view of the program they will reshape.

The RDTI program is showing signs of consolidation. Claimants grew just 3% and expenditure 1% in FY24, and 40% of returning claimants reduced their claim.

Beneath that, the data shows that innovation runs on a longer clock than the policy assumes. The median claimant is now 7.3 years old. The biggest spend growth came from companies aged 9 to 12. Companies past year 10 carry 54% of all R&D expenditure. For those under the turnover threshold, the refund pays for engineers and funds the next stage of R&D.

Australia needs more companies doing a variety of R&D, for longer. Participation is less than half of Canada's and slipped this year. The UK shows the risk of policy change. After reforms tightened its scheme, participation roughly halved in two years, and first-time claimants fell 45% in 2023-24 alone. Refundability should not be set by company age.

If these changes affect you or your community, make a submission while the draft is open.

Thank you to those in the community who contributed to this report. I hope it is useful.

Alex Simmons, Co-Founder & CEO, Kashcade

From the ATO RDTI FY24 Report Findings

*The ATO's reported 3% expenditure growth compares FY24 data against FY23 as first published (incomplete); like for like, true growth was 1%.
Note: FY23 figures are restated from the 12,956 claimants and $16.2B published in Kashcade’s FY23 report, as companies lodging after the ATO's cut-off have since entered the dataset.

The proposed 10-year refund limit reaches the program's core

• Companies more than 10 years old make up 37% of claimants, but carry 54% of all R&D expenditure.
• >10 year-old company claims are also larger: a median of $474k against $318k for companies aged 10 or under.
• The proposed rule restricts the refundable offset to a company's first 10 years (15 for therapeutics) from 1 July 2028. These figures describe today's cohort, not a forecast, but they show the 10-year cliff lands where the bulk of expenditure comes from.

FY23 data shows many industries engage in R&D well beyond 10 years

• Manufacturing's R&D sits with companies a median 19.1 years old, and more than two thirds of its spend comes from companies past year 10. Mining (16.5 years), hardware (11.4) and agriculture (10.9) also sit past the line.
• Biotech and medtech have one of the youngest medians, at 6.6 years. Their older companies still spend heavily, with claim sizes peaking around years 15 to 17.
• The policy exposure draft extends refundability to 15 years for therapeutic-goods R&D only. The median age of manufacturing and mining R&D sits beyond even that line.

Note: Data represents the FY23 RDTI claimant population from the original FY23 ATO transparency report, matched to company age and industry. Top 100 claimants by R&D spend excluded to limit outlier distortion. Industry classifications are Kashcade’s own.

Companies past year 10 make up 37% of claimants and hold 54% of the program's R&D expenditure. How many currently receive the refundable offset cannot be read from the data, but the exposed group is not marginal: these are the program's largest and most established claimants, and for those under the turnover threshold the change converts an annual cash refund into a tax credit that only has value once they turn a profit.

The Budget also lifts the refundable turnover threshold to $50 million, but with refundability limited to those in their first 10 years, the wider door opens only for the very rare young, hyper-growth companies. The 15-year carve-out for therapeutics companies concedes the core problem: R&D cycles run long. Mining, manufacturing, agriculture and hardware run on the same clocks, without the exemption.

The 2026 Budget proposes lifting the minimum expenditure threshold from $20,000 to $50,000. ~7% of FY24 claimants fit that bucket, but made up only 0.17% of claimed expenditure.

• NSW (36%) and VIC (28%) remain home to most claimants and 69% of all R&D expenditure. Combined spend across the two was flat, with NSW up slightly and VIC easing.
• The largest dollar rise was in SA, up 20% to $859M with claimant numbers up 9%, leaving it just short of joining NSW, VIC, QLD and WA above the $1B mark.
• Median expenditure per claimant fell in NSW, VIC, WA and the ACT, consistent with the flat typical claim across the program.

Note: State is assigned per companies’ main business location listed on the ABR; excludes claimants whose ABN does not map to a state. Medians per claimant by state. FY23 comparisons use the restated complete dataset.

• VIC ($400k), WA ($394k) and NSW ($384k) again posted the highest medians among them, each easing marginally on FY23.
• SA was the standout of the larger states, with its median up 7% to $380k on 9% more claimants, the only mainland state to record meaningful median growth.
• TAS (▴35%) and NT (▴36%) posted the largest rises, but on 116 and 36 claimants these medians move on a handful of claims.

RDTI activity remained centralised to city centres:

• The majority (54%) of RDTI expenditure came from companies registered in the top 10 areas, easing from 56% in FY23.
• The top 3 areas, Sydney Inner City, Melbourne City and Perth City, accounted for 36% of expenditure and 21% of participants.
• Sydney Inner City alone held $3.1B across 1,455 companies, 19% of all program expenditure from a single area, though its total eased 3% on FY23.
• The distribution is thin-tailed beyond the capitals: outside the top 10 areas, no single SA3 reached $270M.

• Only 1 out of every 163 companies in Australia participated in the RDTI program in FY24 (down from 1 in 159).
• This is the first decline in the report's coverage: company registrations grew 5% while claimant numbers grew 3%.

Note: Participation is claimants over all registered Australian companies, by state of main business location listed on the ABR. FY23 restated to the complete dataset (previously published as 0.62%, 1 in 161).

The refundable component of the program continues to grow while non-refundable stagnates.

• All growth in the program's cost came from refundable offsets, up 8% to $3.6B, while non-refundable held flat at $780M for a second year.
• The RDTI cost the budget $4.4B in FY24, around 0.16% of GDP and roughly a third of all government investment in R&D. For that outlay, claimants reported $16.7B of R&D expenditure, nearly four dollars of business R&D for every public dollar of program cost.

Source: DISR Science, Research and Innovation budget tables, cost to the budget by income year. A separate source from the ATO transparency data; figures for recent years may be estimates subject to revision. Refundable offset eligibility: aggregated turnover under $20 million.

The RDTI made up 32% of all government investment in R&D in FY24 ($4.4B of $13.9B). Total government R&D spend was 0.52% of GDP, well below the 2022 OECD average of 0.73%.

But participation remained low and slipped: 0.61% of Australian companies claimed in FY24, versus roughly 1.6% in Canada, where participation is still rising.

UK participation roughly halved in two years to about 0.85% after reforms cut rates and added mandatory reporting. Claims fell 26% in 2023-24 alone, with small-company claims down 31% and first-time claimants down 45%. The parallel for Australia is direct. The UK's added friction led to its smallest claimants exiting first.

Canada: SR&ED program statistics, 2023-24 program year, 21,537 claimants. 1.36M companies per Statistics Canada.
UK: HMRC R&D tax relief statistics, September 2025 release, 2023-24 tax year (46,950 claims, ~5.5M registered companies); first published estimates, subject to revision.
Participation rates are indicative; company-base definitions differ across countries.