Seventeen of Australia’s leading medical and science organisations have come together to warn the Albanese Government that proposed changes to the Research and Development Tax Incentive risk hollowing out the country’s life sciences and medical technology sectors.
In a letter to Treasurer Jim Chalmers, sent following the 2026-27 Budget, leaders across biotech, medtech, health tech, pharmaceuticals, science and research urged urgent consultation, saying the Budget proposals are already affecting investment decisions and commercial planning.
The changes of greatest concern to the sectors limit the refundable Research and Development Tax Incentive (RDTI) offset to companies less than ten years old and remove eligibility for so-called supporting R&D activities.
The groups say those shifts would be poorly aligned with the realities of developing regulated health technologies, which require long development timelines, extensive clinical trials and complex regulatory approvals.
AusBiotech CEO Rebekah Cassidy said the measures could encourage early-stage research to remain in Australia while later-stage development, manufacturing, and commercialisation move offshore, where the biggest economic opportunities exist.
Ms Cassidy said, “Australia’s thriving and growing biotech, medtech and health tech sector is dedicated to improving and saving lives, but has been at a crossroads since Budget night.
“Limiting the refundable RDTI offset to companies less than 10 years old does not align with the reality of what are well-documented, lengthy development timelines to bring new health and other STEM innovations to market. Ten years is not a long period in life sciences and other science-based industries."
She continued, “While the intent of the RDTI change is understood, company age is a poor proxy for commercial maturity, growth potential or R&D intensity in science-based sectors like life sciences.
“The proposed changes risk encouraging early-stage research in Australia while pushing later-stage development, manufacturing and commercialisation activities offshore. The latter part is where the most economic opportunities and potential lie, and we don’t want to lose it."
Ms Cassidy said there was an urgent need for the Government to engage industry constructively on the proposed changes.
“This is a globally mobile and connected sector where major markets are actively seeking to attract the talent and capability we have fought so hard to build over decades in Australia.
“Decisions about where clinical trials are undertaken, where investment is deployed, and where companies establish long-term operations, including manufacturing, are made years in advance and are now being influenced by perceptions of Australia's future competitiveness.
“Let’s be clear, while the changes aren’t due to take effect until 2028, they are already influencing decisions. Our sector is urgently seeking a meeting with the Treasurer and a consultation process to bring forward a resolution," she said.
Ian Burgess, CEO of the Medical Technology Association of Australia, said, “Australia is brilliant at inventing medical technology, but too often the commercialisation, investment and jobs end up overseas. We cannot afford policy reforms that make it even harder to keep the economic benefits of Australian innovation here at home."
ANDHealth CEO Bronwyn Le Grice framed the issue as one that affects both patient outcomes and national economic strategy. She said, "Australia’s health and medical technologies sector delivers drugs, [vaccines, diagnostics] devices and digital health solutions which benefit patients here and around the globe each and every day. They also require significant, sustained and patient capital over many years to succeed. Policy change which creates uncertainty or materially alters the risk-reward ratio for investors places both our future health and wealth at risk.
"Australia has invested significantly in diversifying its economy with our health technologies sectors being a beacon for world-class innovation, at scale. It takes many years to generate the clinical evidence, regulatory approvals and commercial partnerships needed to succeed. Policies that unintentionally disrupt that complex commercialisation pathway risk slowing one of Australia's fastest-growing knowledge sectors."
