Small Business Minister Bruce Billson has defended changes to employee share schemes that will see the bulk of the biotechnology sector largely excluded from any benefit.
Under the recently announced changes, to qualify for the new ESS companies must be less than ten years old, unlisted, and have turnover of under $50 million.
While it has welcomed the Government's commitment to reform, AusBiotech says that the criteria excluding listed companies from eligibility will impact around 100 Australian biotechnology companies.
According to AusBiotech CEO, Dr Anna Lavelle, Australian-based biotechnology companies often list early because of the limited availability of venture capital.
“In a global environment where competition for specialist talent is intense, employee share schemes can be a highly effective way of attracting people into the sector," Dr Lavelle recently told BiotechDispatch.
Mr Billson told BiotechDispatch that the announced reforms address the key areas of concern arising from Labor’s 2009 changes.
However, while acknowledging that the reforms do not go as far as many had hoped, Mr Billson says he fought hard for the reforms and that the Government's tight fiscal circumstances made further change very difficult at this time.
"We did extensive consultation in the lead up to drafting the ESS changes, and concerns were raised with the eligibility rules for our proposed start-up concession, particularly their application to bio-tech and other companies with potentially long commercialisation lead times.
"Any expansion to the concessional treatment of employee share schemes needs to be weighed against our commitment to budget repair," he said.
Mr Billson did not rule changes in the future, telling BiotechDispatch that, once the legislation is in place, the policy will be monitored to see how it operates in practice, with the potential for "refinements if it is not achieving all that we want it to."