AusBiotech has congratulated the federal government for its partial back down on proposed cuts to the R&D Tax Incentive (RDTI) program.
"The announcement demonstrates the Government understands how Australia’s post-COVID-19 recovery will be supported by business expenditure for research and development (BERD) and has provided a welcome change of position on the RDTI that will support and incentivise growth in R&D and manufacturing as we recover from the pandemic," said the association in a statement.
AusBiotech CEO Lorraine Chiroiu said, “This is excellent news for our industry, and will preserve the highly-skilled STEM-based jobs in Australia. Tonight’s RDTI announcement, together with the support for medical manufacturing, is a recognition of the economic and social value research and development in life sciences delivers to Australia, particularly in response to the current pandemic.
“While the calculations for companies will be dependent on the applicable corporate tax rate, the announcement tonight signifies is an importance and positive shift in the appreciation of the benefits brought by R&D.”
AusBiotech welcomed a five per cent increase in the refundable component of the RDTI and the decision to scrap the $4 million cap on annual cash refunds. The government has also chosen not to simplify the proposed intensity threshold measure by reducing it from three tiers to two.
"Compared to the reforms before the Senate, the Government is investing a further $2 billion in the RDTI over the forward estimates, that’s $240 million over the forward estimates compared to current policy settings," said AusBiotech.
“As the most critical policy for the industry, the announcements tonight will support our leading sector by giving companies and investors the certainty they need to commercialise and deliver new, innovative treatments to Australian patients,” said Ms Chiroiu.
“As long-time supporter of the Incentive, AusBiotech has been committed to the RDTI’s preservation and ensuring that it continues to deliver benefits to the Australian economy, the development of new medical products and to the creation of highly-skilled jobs.
“Government support through the RDTI for this sector can provide critical defence against some of the health impacts arising from this and future pandemics. Decade-long investment into the industry has prepared these companies to act swiftly in response to the pandemic, pivoting to fast track COVID-19 vaccines, treatments, diagnostics and digital health solutions."