AusBiotech welcomes support for medical manufacturing as the Prime Minister, Scott Morrison, announces its manufacturing plan ahead of next week’s Federal Budget. However, the industry advocate remains concerned that overall support will be reduced if the Bill to cut the R&D Tax Incentive (RDTI) moves ahead.
AusBiotech has been actively advocating for policy to complement the RDTI and directly incentivise advanced manufacturing, for more than 10 years - most recently in its pre-Budget submission.
The “modern manufacturing initiative” funding will be focused on six priority areas, including “medical products”, and was announced at a Press Club pre-budget speech today. It will invest in projects to help manufacturers “scale up” and create jobs.
More than $107 million has been identified for “supply chain resilience” within the national sovereignty aspect of the manufacturing plan.
Lorraine Chiroiu, CEO, AusBiotech, says, “We are pleased to see that advanced manufacturing in life sciences is being recognised for the economic and social value it delivers Australia, and we welcome more details of the announced Initiative. This is not a ‘standing start’; Australia already has strong life science foundations upon which to grow, which as a smart nation we can leverage and accelerate.
“Investment in this sector is not only is important for recovering from the COVID-19 recession and for building our economy for the future, but also can provide critical defence against some of the health impacts arising from this and future pandemics.
“AusBiotech is the national voice of more than 3,000 life science members for 35 years. We engage with parties across the sector, including governments, investors, and our scientific and research community. We facilitate the growth of the sector by enabling the ecosystem to collaborate, translate, and integrate, and we ensure that we are ‘pulling in the one direction’.”
In order to identify growth opportunities, barriers to scale and what is needed along the value chain in each area, AusBiotech has already begun advancing the sector-wide decadal framework ‘Biotech Blueprint: a vision for biotech beyond COVID-19’.
The map will articulate a shared vision and agreed actions as a guide to continue to grow and strengthen Australia’s biotech sector through its recovery and beyond. Looking to the future, the plan will address research and development, investment, jobs, and regulation for the Australian biotechnology industry and discuss opportunities and barriers within the sector to achieve the best growth when delivering improved health and economic outcomes for all Australians.
Maximising the Australian manufacturing sector, as it relates to R&D of “medical products”, will also largely depends on the existing RDTI being complemented with a tax regime that can secure Australia’s competitiveness for the future.
AusBiotech continues to urge the Government to revisit plans to reduce the RDTI, and remains concerned around the proposed ‘intensity measure’ and its impact on bio-medical manufacturing.
Larger companies in the sector are grappling with the impacts of the suggested intensity measure that will see a reduction in support for almost every claimant, particularly those who are undertaking manufacturing in Australia, and a significant layer of complexity and uncertainly about eligibility added.
AusBiotech contends that the calculation will disadvantage companies that have expenditure (and invest in) advanced manufacturing in Australia. This expenditure should be encouraged, rather than discouraged – and AusBiotech finds it another unwelcome consequence of the proposed intensity measure.
AusBiotech actively advocates on behalf of the life sciences sector, and believes that Australia needs a business tax regime to support the innovation ecosystem, both at start-up phase and throughout the lifetime of a company, to retain international competitiveness. Read AusBiotech submissions here.