Global gamble: Survey exposes how proposed R&D cap could harm life sciences


Loss of life science jobs, access to direct investment, clinical trial losses and risk to Australia’s global competitiveness were shown to be significant issues in AusBiotech’s recent survey of Australian life science companies, conducted in response to the recent proposed changes to the R&D Tax Incentive.

With concerns mounting, life science leaders have launched a ‘postcard petition’ to alert the federal government to the potential damage from the proposed changes to the R&D Tax Incentive.

Key findings of the survey:

  • 76% of companies said the proposed $2 million cap on the R&D Tax Incentive would reduce their ability to employ staff.
  • 65% said the proposed changes would impact the time it would take to reach the next value inflexion point (such as a clinical trial end point).
  • 47% said the proposed changes would delay revenue from exports.
  • 59% said it would reduce intern/STEM graduate employment.
  • 76% said the incentive helps attract investment.
  • 71% said exempting clinical trials would be beneficial.
  • 100% said the cap would impact their ability to compete globally.

In contrast, the majority of respondents to AusBiotech’s annual CEO survey conducted before the release of the R&D Tax Incentive Review in February 2016, said they planned to hire more staff throughout 2016 and 41 per cent of respondents said the environment was conducive to growing a biotechnology company, the highest result ever recorded.

Respondents contend the proposed cap would jeopardise R&D plans, affecting both the long-term strategy of life science companies, clinical trials and employment opportunities in the sector.

“A reduction in the cap may put our whole research program at risk, impacting all employees,” said one respondent, while another company indicated the proposed cap would reduce their ability to employ staff by up to 50 per cent.


More than three-quarters of respondents said the R&D Tax Incentive helped attract both foreign and domestic investment, and warned changes to the program were a “global gamble” that would deter potential investors and compromise Australia’s global competitive advantage in the life sciences.

“Reduction in funding will impact the speed of programs and competitive advantage - ultimately reducing international competitiveness,” said one respondent.

Instead of losing their competitive advantage in the sector, other life science organisations indicated they would be moving their operations offshore “We would have to seriously reassess if we could continue to function as an R&D entity in Australia. We may need to export our technology and develop it elsewhere,” said another respondent.

“It [the proposed changes] neutralises the benefit of the R&D Tax Incentive and may prevent larger projects being conducted in Australia.”

Life science leaders launch postcard petition

Life science industry organisations AusBiotech, BioMelbourne Network and Research Australia have united to launch a ‘postcard petition’ to alert the federal government to the potential damage from the proposed changes to the R&D Tax Incentive.

“The R&D Tax Incentive supports Australia’s current and future capacity to meet the increasing global demand for healthcare and innovation,” they said.

“We strongly oppose the introduction of a $2 million cap on the annual cash refund payable under the R&D Tax Incentive. We believe the proposed cap will negatively impact Australia’s ability to be globally competitive in public and private medical research, clinical trials, advanced manufacturing, STEM jobs and other areas critical to the development of the life sciences industry.”

AusBiotech urges members to complete the postcard, available now by contacting AusBiotech or print the card and include it in a letter outlining how the proposed changes to the R&D Tax Incentive will impact your company, or joint the conversation on Twitter: #NoRandDcap