What the government is doing for biotech
Much has changed since the 2008 BIO International Convention. Economies around the world have been hit hard by the global financial crisis, which has now mutated into a global recession.
Australia has fared better than many other countries, but we are not immune. The effects of the downturn are being felt by many Australian industries, and biotechnology is no exception.
In September last year, the Australian Government acted decisively to restore stability and liquidity to the financial system, and this produced immediate benefits.
By year’s end, only twelve of the world’s top 100 banks were rated AA or above, and four of them were Australian.
Our financial institutions are sound and activity has held up better in Australia than in most comparable countries.
Nevertheless, there is a shortage of credit across the economy, and finance for biotechs and other innovators has largely dried up.
Existing government programs are providing some relief.
Two new fund managers have been licensed through the Innovation Investment Fund. Each has $20 million from the fund and an equal or greater amount from the private sector, and both are investing now.
In September last year, I invited three more prospective fund managers to apply for licences.
Climate Ready supports the research, development and commercialisation of green technologies. This is a $75 million program, and it has attracted considerable interest from agricultural and industrial biotechnology companies.
The R&D Tax Concession remains our biggest innovation support program for business. It is expected to be worth more than $750 million in 2008-09, and of course it is open to biotechs.
We are also pursuing an industrial biotechnology strategy to promote awareness of biotechnology in the manufacturing sector and drive demand for biotech solutions.
In addition to these existing programs, we have also responded to the crisis with new measures to help businesses ride out the storm.
These include a $3.8 billion business tax break, which allows firms to make additional deductions for spending on new capital assets.
In March, I announced the establishment of an $83 million Innovation Investment Follow-on Fund to provide much needed support for innovative companies requiring capital for growth.
Follow-on funding will be available to companies participating in the government’s existing early-stage venture capital programs. Our aim is to ensure that these companies remain viable and remain in Australia.
The Australian Government will continue to monitor the effects of the global crisis on our economy and on specific industries, including the biotechnology sector.
The Prime Minister has made it clear that we will take whatever further action is necessary to steer Australia through these difficult times.
We are also planning for recovery. Last year’s Review of the National Innovation System made many recommendations of interest to the biotechnology sector.
The government has articulated ten ambitions in response to the review. They include lifting the level of collaboration between public sector researchers and private industry, increasing the proportion of businesses engaged in innovation by 25 per cent over the next decade, and ensuring that the number of businesses investing in R&D continues to grow.
We are preparing a detailed response to the review as part of the budget process.
Biotechnology is critical to Australia’s future. It promises us better health, more nutritious food, a cleaner environment, sustainable energy, and new pathways to prosperity.
That’s why my portfolio is spending around $390 million on biotechnology research and industry support this year.
We are determined to capture the benefits of this enabling technology for Australia. This is also the goal of our wonderfully creative biotechnology sector.
Together, I’m confident we can achieve it.
Senator Kim Carr is the Australian Minister for Innovation, Industry, Science and Research
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