R&D Tax Incentive
The R&D Tax Incentive is one of the most significant policies to the Australian life sciences ecosystem. It offers a refundable tax offset to eligible entities to accelerate growth in Australian life science innovation, and supports the translation of medical research.
The policy’s benefit to the Australian life sciences industry is at risk due to constant tweaks, threats and reviews. As biotechnology is a long-term activity that requires large investment, with products typically taking 10 to 15 years to market, the changeability of policy undermines business confidence.
As one of the pioneers of the Incentive, AusBiotech is committed to its preservation and ensuring that it continues to deliver benefits to the Australian life science industry.
2019 Reintroduction of the Research and Development Tax Incentive (RDTI) Bill
Despite a Senate Inquiry’s recommendation to examine the impacts before actioning, newly proposed cuts to the RDTI Bill were tabled without notice in December 2019, astonishing the biotech industry. The vast majority of SMEs and companies in life sciences will be disadvantaged in their claims if the proposed changes go ahead.
As the most critical policy for the industry, the proposed changes have the potential to significantly damage the sector, and ultimately impact its capacity to deliver new, innovative treatments to Australian patients.
R&D Tax Incentive: Additionality and spillovers for the life sciences industry
A new report shows the life sciences industry will be more seriously impacted than other sectors of R&D by cuts proposed in a new Bill on the new RDTI.
In response to a Senate Inquiry’s (February 2019) recommendation to fully understand the impacts before proceeding with any proposed RDTI changes, AusBiotech commissioned new research to examine, analyse and understand the additional benefits that the RDTI brings to Australian life sciences. This research is fundamental to informing decision making.
The available dataset in the original Centre for International Economics (CIE) report – on which the previous recommendations for making changes to the RDTI were based – lacked the granularity needed to capture the particular sensitivities of life science research and product development.
The new data captured in this report is markedly different from those captured in the CIE Report, clearly illustrating the significant impact on the biotech sector in comparison to the broader innovation happening within Australia.
“For the first time biotech has hard evidence that the benefits that the industry’s R&D environment brings is different, and this distinction needs to be acknowledged and mitigated before any proposed changes to the RDTI go ahead. The sector brings significant social and economic contributions to Australia, and the impacts of the proposed changes will be felt across the ecosystem – from bench, to business, to bedside.”
Ms Lorraine Chiroiu, CEO, AusBiotech