A coalition of nine leading health and life sciences organisations has warned that proposed 2026-27 Budget changes to the Research and Development Tax Incentive will disproportionately hit Australia’s life sciences sector and force more home-grown companies to consider relocating overseas.
AusBiotech, Pathology Technology Australia, MTPConnect, ANDHealth, Life Sciences Queensland, Life Sciences WA, BioNSW, BioMelbourne Network and ARCS Australia have co-signed a letter to Treasurer Jim Chalmers requesting an urgent review of the proposed changes.
While the sector has broader concerns about multiple tax measures, including changes to capital gains tax arrangements, the proposal to limit the RD Tax Incentive’s longstanding refundable tax offset for companies less than 10 years old is singled out as particularly unworkable.
Industry leaders say the change fails to recognise the long development timelines intrinsic to health innovation. It routinely requires more than a decade to progress life-changing and saving discoveries through rigorous clinical, regulatory and market access pathways.
AusBiotech CEO Rebekah Cassidy said the proposed changes were already creating uncertainty for Australian companies as they make long-range decisions about where to undertake clinical development programs. “The long timeframes required to translate and develop medical research into health products for patients are not new news. It is well understood by industry and government that bringing these critical health products to market routinely takes well beyond a decade,” Ms Cassidy said.
The AusBiotech boss outlined the multiple commercial hurdles companies must clear before any revenue is generated, noting they “bridge multiple commercial ‘valleys of death’ as they spin out of research into pre-clinical development, clinical trials, regulatory approval and manufacturing scale-up before revenue generation through market access is even possible.”
The sector highlighted recent government documents that acknowledge lengthy timelines.
The 2025 National Health and Medical Research Strategy Issues Paper averaged the timeframe at 17 years, while the 2024 Medical Science Co-investment Plan referenced a “decades-long" process.
Cassidy said the industry was blindsided by a change introduced without consultation. “Our sector has had a longstanding, collaborative working relationship with governments, so we were blindsided by this proposed change, which occurred with no consultation,” she said. “The proposed tax change doesn’t recognise commercial timelines or our sector’s significant contribution.
“Cumulatively, biotechnology has been Australia's largest value-add export industry outside primary industries since 2016 and it supports more than 350,000 jobs across almost 3,000 organisations.
“We are struggling to understand why the government would jeopardise that by making changes that are fundamentally misaligned with long-held understanding of the commercial, regulatory and market access realities of this important sector.”
AusBiotech says it has been engaging at the highest levels of government and across parliament since the changes were announced and is seeking swift policy clarity. “We want to work with the Government to get these policy settings right and at speed so we can give Australia’s biotech, medtech and health tech companies the policy certainty they need to continue to thrive. We just need Government to meet us at the table.”