Australian Biotech Industry Receives Boost in Budget
The Australian biotechnology industry had a significant win in the budget, with the introduction of a research and development tax credit. While this offers local biotech’s some much-needed relief, it also places responsibility on the biotech industry and government to work together to cement Australia’s R&D position in comparison with our competitors around the world.
Australia is one among the five nations that have launched a tax-refundable credit (and one of only 15 to provide a tax-credit method) to help foster local biotechnology. It’s an indication that the Government acknowledges the role technology and innovation will play in leading an economic recovery and driving job development for upcoming generations.
Australia already stands sixth in the world in innovative biotechnology, and we are considered as the No.1 location for conducting clinical trials. Medical breakthroughs, such as the Cochlear hearing implant and cervical cancer vaccine (Gardasil), have improved the quality of health for millions of people across the world.
Impressively, for a small nation, nine Australians have been awarded Nobel prizes for work in medicine and related platforms.
Now, following months of speculation about how the Government would respond to Dr Terry Cutler’s Venturous Australia report, the sector has finally been taken into consideration for the capacity it represents. The $8.58 billion budget package for science and innovation, including small business-friendly refundable tax credits for research and development companies, was a clear nod to the industry. If completely realized, these measures will run a long way towards assisting Australia to maintain its competitive edge in biotechnology.
The budget package made 25 percent growth on last year’s measures and is the largest annual increase in spending on science and innovation since records started in 1978-79.
Furthermore, the 45 percent refundable tax credits for research and development represent the most significant reform to tax-based innovation policy since the R&D tax concession was launched in 1986.
The scene is now created for Australian science and innovation to firmly identify its position as a world leader in R&D.
The industry publication BioTechnologyNews.net traced the R&D spend of 103 companies last year, and preliminary estimates suggest that biotech companies with group turnover of up to $20 million together stand to benefit from about $187 million in refundable tax credits annually. This is equivalent to $62 million in cash-flow support with $1.4 billion to the broader innovation sector.
If passed, the R&D tax credits will help in significantly easing the burden of capital for local companies and allow them to focus on what they do best – research and development.
The next challenge is for industry and government to turn these budget policies into reality, and create the conditions for Australian biotechs to successfully commercialize their science on our shores. The future of Australian biotechnology remains a bipartisan issue and one that demands support from both sides of the political divide. To ensure the benefits of such a package are seen in real terms, two things are imperative.
Comments are currently closed.