Australia’s life sciences competitive advantage at risk from Omnibus Savings Bill


AusBiotech Chief Executive Officer, Mr Glenn Cross, says the proposed cut to the Research & Development (R&D) Tax Incentive included in the Omnibus Savings Bill, which recently entered Parliament, risks Australia’s competitive advantage in the life sciences.

“Reducing the benefit of the R&D Tax Incentive will have a direct impact on an area of national competitive advantage, which has responded recently with growth, in large part due the effect of the R&D Tax Incentive,” said Mr Cross.

The proposal to reduce benefits to R&D-engaged companies was originally linked to a promised corporate tax reduction of the same magnitude, thereby effectively neutralising the reduction. However, the corporate tax decrease was not implemented.

The Opposition has long defended the need to retain the existing R&D tax rebates, thereby optimising encouragement for the small enterprises, making up the bulk of the Australian life science sector. This position changed in the last election campaign.

Mr Cross said: “The Opposition has also contradicted its clear statement of support regarding innovation and entrepreneurs.

“AusBiotech calls for the Government to release the proposed changes that will result from the recent Review of the R&D Tax Incentive, consult with AusBiotech, and consider how these will mitigate or exacerbate the reduction in benefit that is currently proposed in Chapter 22 of the Omnibus Savings Bill.

“The chapter states that no concerns were raised during consultation. AusBiotech as the key industry representative body for a significant research and development sector, which has been identified by Government as deserving national focus with the medtech and pharmaceutical growth centre, was not consulted and has concerns.

“Given the articulated Government desire to promote innovation and given that a detailed review of the R&D Tax Incentive has been finalised and is on the Minister’s desk – it is difficult to ask people to agree with a measure in isolation, disconnected from the completed recommendations of the Review. It would be preferable for industry to see all the proposed changes and have an opportunity to engage with the Government before reverting to the original Abbot/Hockey measure.

“AusBiotech is fully aware that unless Government agrees, removing or editing a section of the Omnibus Savings Bill will not be practical,” he said.