The body representing Australia's life sciences workforce says it supports the Government's push to simplify the Research and Development Tax Incentive (RDTI), but also warned that one planned change could move the regulatory and safety work behind clinical trials out of the country.
LifeSciences Australia, which represents more than 38,000 professionals across the sector, has lodged a formal submission to Treasury on the exposure draft of the Treasury Laws Amendment (Tax Reform No. 5) Bill 2026. The organisation said its submission draws on consultation with members working in regulatory affairs, clinical research, pharmacovigilance, medical affairs and quality and manufacturing.
It said larger sponsors, medtech companies and contract research organisations broadly supported the headline changes. These lift the maximum expenditure threshold from $150 million to $200 million and raise the turnover threshold for the refundable offset from $20 million to $50 million.
However, the concern is the draft's removal of RDTI eligibility for 'supporting' R&D activities. Pharmaceutical and medtech companies are legally required to do this work, which includes regulatory submissions to the Therapeutic Goods Administration, pharmacovigilance and safety reporting, and manufacturing compliance for clinical trial material.
"This isn't a case for unwinding the reform," LifeSciences Australia chief executive Dr Tim Boyle said.
He said members see "genuine value in the rate and threshold changes in this package", but the organisation's objection was "narrower and specific".
"Removing the tax offset for statutorily required supporting work doesn't remove the need for that work, it just removes the incentive to keep doing it in Australia," Dr Boyle said. "That's a real and underappreciated risk to Australian jobs in regulatory, pharmacovigilance and quality roles, at a time when global sponsors are reviewing where to locate these functions against other jurisdictions."
The consultation also raised concern about a restriction that ties access to the refundable offset to the age of companies that invest heavily in research. Dr Boyle said this still fits poorly with how long clinical development takes for biotechnology founders in their early years, even though the current draft improves on earlier versions.
The submission recommends that Treasury narrow the definition of ineligible supporting activities so legally required work stays eligible. It also asks Treasury to phase in the changes gradually over several years rather than impose them all at once from 1 July 2028, and to scrap the age restriction for companies running active clinical trials.
"We support a fiscally sustainable RDTI, and we want to work constructively with Treasury to get the design right," Dr Boyle said. "Our ask is that the settings don't inadvertently thin out the workforce that keeps Australia's clinical trials sector globally competitive."
