AusBiotech is commissioning research to quantify the additionality and spill-over effects of the R&D Tax Incentive (RDTI) and urgently calls on companies to help with information.
With Parliament resuming next week, AusBiotech is building the evidence base to demonstrate how the proposed changes to the RDTI will disproportionally and severely effect the life sciences sector, compared to other sectors.
The RDTI has been one of the most significant policies for the Australian life sciences ecosystem, offering eligible companies accelerated growth and supporting the commercialisation of medical research.
It helps to advance the life sciences industry and attract clinical trials, which benefits Australian patients and the domestic healthcare system as well as generating clear economic activity in science-based jobs. It provides additionality by retaining R&D activity in Australia that may otherwise have migrated to other countries with competitive tax regimes, and by attracting R&D activity into Australia from other countries. It also enables clinical trials to be fast-tracked.
AusBiotech believes that the rationale supporting the proposed changes has not taken into consideration the unique challenges that life science companies face. A comprehensive data set needs to be developed to demonstrate this; AusBiotech has commissioned research, including developing a survey, to help address this gap.
The Ferris, Finkel, Fraser Review (April 2016), on which the proposed changes to the RDTI are based, drew from a range of sources, including research from the Centre for International Economics (CIE). The Review claimed that the RDTI programme fell short of meeting its stated objective of additionality and spill-overs, and included a series of recommendations to improve Australia’s collaboration and commercialisation.
The questions in AusBiotech’s commissioned research have been designed to use some of the original CIE questions as a baseline. Not all questions are compulsory, enabling respondents to skip questions that are irrelevant to their company.
The research is being undertaken by an independent consultancy Evaluate, who holds over 20 years’ experience in the RDTI. Catherine McGovern, Principal, Evaluate, is available to speak to companies on the context of the survey, to help respondents through the questions if needed, or to interview companies in more detail.
The information gleaned from this survey will form a key part of AusBiotech’s advocacy efforts to retain the RDTI in its current form. Each of the proposed changes is highly problematic for the Australian life sciences industry, and together they will risk the industry’s future growth and the development of new life-saving and life-enhancing treatments for patients.