The federal government has continued its pledge to innovation in the FY18/19 budget. In part, the government is funding the commitments via various changes to the R&D Tax Incentive scheme, which is projected to save $2.4 billion over 4 years.

Changes include a $4 million cap on annual cash refunds for companies with an annual turnover of less than $20 million, increasing the R&D spending threshold from $100 million to $150 million for larger companies, and a carve-out for clinical trials in the development of pharmaceuticals and medical devices.

The government has committed $40 million to assist Australian SMEs to expand overseas and export to global markets. The funding is also intended to ensure that Australian businesses trading overseas can access grants. $100,000 has been allocated to promote Australia internationally as a FinTech destination. IP Australia has received $600,000 to modernise Australia's patent management system and streamline access to its services through digital channels.

Significant funds were also set aside for Australia's research, technology and science capabilities – $2.4 billion for over the next 12 years. The research sector will receive the largest portion of this, with particular emphasis on new infrastructure. Notably, $4.5 million over four years will be invested in encouraging woman to participate in science, technology, engineering, mathematics and medicine studies.

The government has also allocated $26 million for the long anticipated creation of a dedicated Australian Space Agency and the implementation of the International Space Investment Initiative. Consistent with this increased commitment to the aerospace industry, $260 million has been allocated towards developing world-class satellite positioning infrastructure.

Of course, in the age of big data and super computers, the budget has not disregarded the need for extra funds for the Pawsey Supercomputing Centre and the nation’s capability in artificial intelligence and machine learning.

The government has also pledged to "ensure that innovation is accurately measured in Australia to guide evidence-based policy and better target investment in innovation as a driver of economic growth". This is, of course, essential if Australia is to compete internationally in growth industries and emerging technologies, with other international innovation hotspots such as Germany, US, Japan, Korea, Israel and the UK.