The Government’s "shock deal" with the Palmer United Party and Independent Senator Xenophon over changes to the R&D Tax Incentive is a "further blow" to Australian innovation, according to AusBiotech.
Under the changes, the Government has effectively capped claims under the tax incentive with associated savings in excess of $1 billion over the next four years.
According to AusBiotech CEO, Dr Anna Lavelle, “The R&D Tax Incentive has been the shining beacon of hope and support to the biotech industry and we have consistently praised its success and urged the Government not to limit or remove it, and to provide consistency and certainty to the sector to allow its development.â€
She continued, “This is a further blow to an industry seeking to take its rightful place as a pillar of the Australian economy and we call on the Government to match its rhetoric on supporting innovation and jobs, stop stripping vital supports and back Australia’s strength in pharmaceuticals and medical devices.â€
AusBiotech said that, while the changes ostensibly target large companies, many small companies will be impacted through their partnerships thereby undermining the policy intent of the R&D Tax Incentive.
“The unrelenting threat to the R&D Tax Incentive and efforts to trim and cap is unsettling for an industry that takes many years to develop each treatment, diagnostic, cure and medical device. The backdating of this latest amendment by seven months will cause havoc with planning, create even greater uncertainty and discourage the industry from investing,†Dr Lavelle said.
AusBiotech also said that it fully supported the Australian Greens’ proposed amendment that would revive quarterly payments for small and medium size businesses eligible for a R&D Tax Incentive.
“This is another missed opportunity for the Government to demonstrate real support for biotech innovation and the creation of ‘smart’ jobs and another example of how the rhetoric is failing to match actions,†said Dr Lavelle.