The Australian Academy of the Humanities is urging the Federal Government to amend its proposed research and development (R&D) tax reforms, warning that the continued exclusion of humanities, arts and social sciences (HASS) research risks undermining collaboration and narrowing Australia’s innovation agenda.
The intervention follows the introduction into Parliament of the Treasury Laws Amendment (Tax Reform No. 4) Bill 2026, part of the Government’s response to the Ambitious Australia: Strategic Examination of R&D Final Report.
At the centre of the Academy’s concern is the Bill’s retention of an explicit exclusion for research in social sciences, arts and humanities under section 355-25(2)(d) of the Income Tax Assessment Act 1997.
The Academy argues that maintaining this distinction creates an arbitrary barrier to R&D eligibility, potentially discouraging investment and innovation in areas addressing complex social challenges, creative industries, social enterprises and First Nations knowledge and innovation.
It is also concerned that the proposed changes could undermine multidisciplinary research, effectively determining eligibility according to the academic discipline involved rather than the nature and substance of the research itself.
Academy President Professor Stephen Garton said addressing some of the most significant challenges facing Australia and the world requires collaboration between STEM and humanities, arts and social sciences researchers.
“As currently drafted, the Bill could create the perverse outcome that some research activities within a multidisciplinary team qualify for support while others are excluded because of their discipline,” Professor Garton said.
“This would discourage collaboration at a time when Australia needs it most.”
The Academy is not opposing efforts to simplify the R&D tax incentive. In its submission to the Bill’s exposure draft, it supported a streamlined, activity-based definition of eligible research, provided the test was genuinely discipline-neutral.
However, it wanted the legislation to explicitly confirm that HASS research could qualify where it met the substantive requirements for R&D, including practical examples of multidisciplinary, humanities-led and arts-led research.
The Academy argues the current Bill fails to deliver that outcome. Instead, removing the supporting R&D category while retaining the disciplinary exclusion risks reinforcing the very distinction the reforms should be addressing.
Its proposed solution is straightforward: determine R&D eligibility by the nature of the research activity, not the discipline in which the researchers are classified.
As the Academy argued in its submission, research involving experimental uncertainty, systematic investigation and the generation of new knowledge should be eligible regardless of whether it sits within STEM, HASS or across disciplinary boundaries.
The debate raises a broader question about how Australia defines innovation and, importantly, which forms of research it considers worthy of public support.
While STEM research is central to technological development and commercial innovation, the Academy’s intervention highlights the role of social, cultural and ethical research in understanding how new technologies are developed, adopted and applied.
There is also a practical consideration. Many of the challenges facing Australia, from artificial intelligence and social cohesion to climate adaptation and First Nations innovation, do not fit neatly within traditional disciplinary boundaries.
Creating different eligibility rules for researchers working on the same project risks complicating collaboration and potentially leaving important parts of the innovation process without support.
The Academy is calling on the Government to amend the Bill before it progresses, removing the disciplinary exclusion and ensuring that research eligibility is determined by the activity undertaken rather than its academic classification.
The question for policymakers is whether Australia’s R&D framework will recognise innovation in its broadest sense, or continue to privilege particular disciplines at a time when cross-disciplinary thinking is increasingly important.
