Tax breaks for investors in early stage innovative companies and a new Biomedical Translation Fund to support commercialisation were among the long-advocated-for highlights delivered today as AusBiotech welcomed the Turnbull Government’s launch of its National Innovation and Science Agenda (NISA).
The NISA, which is titled ‘Welcome to the ideas boom’, aims to “drive Australia’s economy and will drive prosperity and competitiveness” and was announced on Monday by Prime Minister Malcolm Turnbull and the Minister for Industry, Innovation and Science Minister, Christopher Pyne, to “support innovative businesses, grow private sector investment in research commercialisation and increase the flow of venture capital to high potential startups.”
The Prime Minister has raised the prominence of innovation within the Government, by establishing the new Innovation and Science Committee of Cabinet, which he will Chair.
CEO of AusBiotech, Dr Anna Lavelle, said: “It is indisputable that innovation is firmly on the agenda, where it ought to be, as a key driver of productivity for our country. We are keen to see this positive policy transformed into action that makes a difference to Australia’s ability to commercialise and benefit from our world-class research and development (R&D).
“The message is ‘loud and clear’ that Australia needs innovation to be the big winner for our quality of life and economy. AusBiotech is pleased to see the Government has been listening to its calls for capital gains tax breaks for investors in early stage companies, the ‘same business test’, the Biomedical Translational Fund and improvements to Employee Share Schemes.
“The introduction of the patent-box style incentive remains an important, but so far overlooked opportunity, to keep home-grown intellectual property in Australia once it nears and reaches commercialisation and AusBiotech will continue to advocate for the Australian Innovation and Manufacturing (AIM) Incentive. We look forward to furthering discussions with the Minister,” said Dr Lavelle.
The NISA says a new independent board, Innovation and Science Australia (ISA), will replace the current function of Innovation Australia and will be responsible for strategic coordination and advising government on all science, research and innovation matters.
ISA will be chaired by Mr Bill Ferris AC, with Australia’s next Chief Scientist, Dr Alan Finkel AO, as deputy chair.
According to ‘Welcome to the ideas boom’, “ISA will empower government to think differently, ambitiously and on a global scale; growing a stronger, more entrepreneurial innovation system. It will complement the Commonwealth Science Council, which will continue to advise the government on high level science challenges facing Australia.”
One of the ISA’s first responsibilities will be to review the R&D Tax Incentive, to “sharpen its focus on encouraging” additional R&D spend. AusBiotech will seek to participate in the review, as the industry organisation has with the previous reviews if the R&D Tax Incentive. Unfortunately there is no mention of abandoning the 1.5% cut to the R&D Tax Incentive, which remains on the notice paper.
AusBiotech has also welcomed bipartisan support for innovation with the launch of several new measures by Labor. If elected, Labor will establish a new independent agency called Innovate Australia charged with accelerating economic growth, delivering critical innovation programs and providing expert advice to governments modelled on the highly-successful innovation agency in the UK, Innovate UK.
A Shorten Labor Government will build on its previous announcements, including measures to increase access to venture capital to commercialise great Australian ideas and support local start-ups, including backing great ideas through co-investing in early stage and high potential companies through the $500 million Smart Investment Fund.
Dr Lavelle said: “AusBiotech has welcomed the convergence of views and bipartisan support for innovation in the recent raft of announcements.”
Both of the major parties are committed to many policies in common, including:
- Innovation as key driver of our economy;
- Tax incentives to encourage investment in early stage and start-up companies;
- Increased support to foster collaboration between industry and researchers;
- Support for the STEM (science, technology, engineering and maths skills);
- Support for incubators and accelerators; and
- Safe ‘landing pads’ as part of global engagement for companies.
Among the new measures, Labor proposes to “help supercharge the formation of startups in Australia” by delivering tax relief for angel investors through a new Australian Angel Investment Scheme and through changes to the existing Early Stage Venture Capital Limited Partnerships.
The plan also includes “backing our best overseas” and boosting commercialisation of Australia’s R&D and support Australian entrepreneurs in the United States by setting up a dedicated innovation and commercialisation ‘landing pad’ in San Francisco – as well as a plan to accelerate innovation in our regions with rural and regional incubators.