Almost $17 Billion in Company R&D Spending Revealed by ATO Report

More than 13,400 Australian companies reported almost $17 billion in research and development spending under a federal tax break in 2023–24, with small businesses lifting their spend fastest, the Australian Taxation Office said in its annual transparency report released [DATE: CONFIRM].

Public and multinational companies still put in the most money, at $9 billion or 54% of the total. But small businesses, those turning over less than $10 million a year, recorded the biggest growth. They lifted R&D spending by 28% to $3.1 billion.

Why this matters to you

This is public money. Companies doing eligible R&D get a tax offset, so the government collects less tax. Policy analyst John H Howard has argued that a dollar of revenue forgone through an R&D offset has the same effect on the budget bottom line as a dollar spent on a research grant.

The report shows who is claiming and how much they spent. It does not show what taxpayers paid. The ATO says the data leaves out the R&D activities conducted, the amount of tax offset each entity received, whether that offset was refundable, and any past or ongoing audit or compliance activity.

If you're studying or job hunting in tech, science or manufacturing, it's also a rough map of where companies put research money. Professional, scientific and technical services led spending again, followed by manufacturing.

What is the R&D tax incentive?

The R&D tax incentive (R&DTI) cuts the tax bill of companies doing eligible research. Smaller companies can get part of it as a cash refund. The ATO and the Department of Industry, Science and Resources (DISR) run it jointly, and companies register and assess their own claims.

To qualify, the work generally has to involve genuine technical uncertainty that can only be resolved through systematic investigation based on established science, Howard wrote. The scheme replaced the R&D Tax Concession in 2011.

The ATO must publish claim data by law, two years after the end of the financial year the data relates to, a delay meant to protect commercially sensitive information.

How it started

The ATO published its first transparency report on 3 October 2024. It covered 2021–22, when 11,545 companies claimed a total of $11.2 billion in R&D expenditure.

The turning point

The second report, updated 25 September 2025, covered 12,956 entities for 2022–23, with $16.2 billion in eligible R&D expenditure.

Meanwhile, the government ordered a review of the whole system. The Strategic Examination of Research and Development, commissioned in December 2024 and chaired by Robyn Denholm, released its final report, Ambitious Australia, on 17 March 2026. It made 20 recommendations, and the May 2026 federal Budget followed with the biggest RDTI shake-up since 2021, according to accounting firm Grant Thornton.

What changed in 2023–24

The 2023–24 report covers 13,490 entities. Of those, 6,920 are small businesses, 4,116 are privately owned and wealthy groups, 2,449 are public and multinational companies, and five are not-for-profits.

Compared with the year before, the mix shifted. The 2022–23 report listed 6,016 small business entities, 4,507 privately owned and wealthy group entities, and 2,428 public and multinational entities. That means about 900 more small businesses claimed, while privately owned groups fell by about 390. The ATO's release did not explain the drop.

Perspectives

The tax office says publishing the data keeps claimants honest. "Transparency helps build confidence in the R&D tax incentive by showing the community where public support is being directed, while encouraging businesses to take care and ensure their claims are accurate," ATO Deputy Commissioner Louise Clarke said.

Clarke said the ATO would keep "making it easy for those who comply and harder for those who seek to cheat the system," and pointed to "strong, stable engagement from businesses across all industries."

The government says its reforms will get more research out of each dollar. Treasurer Jim Chalmers released draft laws in September. The government estimates each dollar of tax offset will generate around 20% more business R&D, and that R&D by young firms will rise by around $400 million a year.

Critics question the cost and who benefits. In an April 2026 analysis of the review's recommendations, Howard, executive director of the Acton Institute for Policy Research and Innovation, argued that the proposals would expand eligibility beyond genuine research, concentrate benefits among a narrow group of firms, and proceed without clear costings. He also noted that the 46% of Australian businesses that innovate but do not conduct formal R&D receive nothing from the scheme, current or reformed.

Industry advisers see a trade-off. Pattens, a consultancy that prepares R&D claims, said the package pairs more generous core rates and a higher $50 million refundable turnover test with cuts to what qualifies and who gets cash.

What's next

Public feedback on the draft laws is open now. Consultation opened on 10 September and closes on 28 September 2026.

Under the draft, supporting R&D activities would no longer be eligible, the minimum spend would rise from $20,000 to $50,000, and cash refunds would generally be limited to firms incorporated for less than 10 years. The changes start on 1 July 2028. Until then, the current rules apply.

On the ATO's two-year publishing lag, data for 2024–25 would be due around September 2027.

What you can do: Look up any company's reported R&D spend in the full dataset, which the ATO publishes on data.gov.au. If you run a business that claims, check your figures. Anyone can make a submission to Treasury before 28 September.