R&D Tax Incentive cap to hamper commercialisation, industry says
Australian biotech and medical associations have come together to urge the government to “not devastate” the Australian MTP (medtech, biotech and pharmaceutical) sector “by gutting the Research & Development (R&D) Tax Incentive”.
The measures proposed by the ‘Ferris, Finkel, Fraser’ Review threaten the commercialisation of Australian medical research, according to a joint statement issued by AusBiotech, Research Australia, Medicines Australia, Medical Technologies Association of Australia and BioMelbourne Network.
The changes proposed, especially the $2 million cap and the ‘intensity threshold’, will have significant, disproportionate and negative impact on Australia’s medical technology, biotechnology and pharmaceutical (MTP) sector, according to the statement.
According to the 2017 AusBiotech CEO Industry Position Survey (due for release 1 May) of 46 member companies, implementing a $2 million cap will impact the ability to employ staff for 58% of companies, while 45% of companies will be have a reduced capacity to employ STEM graduates, 81% will be affected in their capacity to attract investment and 75% will be less able to compete globally. Companies were on average able to leverage the non-dilutive capital provided by the R&D Tax Incentive at $8 for every dollar spent.
“We understand the need for the Government to ensure that the tax incentive is sustainable during challenging budgetary conditions; however, the scheme must be viewed as a tool to encourage long-term investment in Australia that creates highly-attractive jobs, attracts clinical research and grows the local economy.
“The R&D Tax Incentive is the most critical centre-piece program in the translation of Australia’s world-class research into treatments, cures, diagnostics, medical devices and vaccines. The program has been successful in helping attract more investment in R&D and fostering a strong Australian life sciences clinical trials and R&D sector.
Ensuring that any redesign of the tax incentive does not act as a handbrake on this investment is imperative, so that Australia can continue to thrive as a home for some of the world’s most talented scientists and medical researchers, improve its position as a centre for high-quality R&D in medical science and receive the related spill-over benefits,” the statement says.
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