The AusBiotech annual survey of industry leaders says the policy environment is “tough and unsupportive”, capital is the life-blood of the industry and Australia is badly lacking, but improved policy is all about tax reform – leaving companies that are doing great work in growing jobs and revenue sources for the post-mining boom economy to go in search of a better business environment.
Taking the annual pulse of Australia’s biotechnology and medical technology industry, supported by Grant Thornton, the survey has revealed some key themes, perhaps none as stark as the need for local companies to work globally and, sadly, fight to keep their operations in Australia as the international environment gets more competitive and Australia’s policy environment fails to adequately respond.
Dr Anna Lavelle, CEO of AusBiotech: said: “The snapshot of 56 companies showed strong positive sentiment amongst biotech companies, but these same companies are preparing to leave home in search of an innovation-friendly environment with access to critical capital and/or competitive tax regimes."
Roundtable discussions (that supported the survey) demonstrated that CEOs are passionate about the benefit that the industry could add to Australia’s economy and want to keep and grow their companies in Australia. The R&D Tax Incentive was repeatedly cited as the only positive policy for biotechs, which was enabling reinvestment into research programs and bolstering clinical trial activity.
“Companies are developing exciting new technologies, which offer significant potential and current community benefit and spillover benefits to the economy with jobs and exports, but with a large appetite for capital. It would be a travesty if more of Australia’s world-class research ends up moving offshore, as companies are forced to consider the Australian innovation landscape and the advantages of leaving home," Dr Lavelle said.
She continued, “Cell therapies, specialised medial devices, biopharmaceuticals and other advanced manufacturing are precisely the sort of activity that Australia should excel in. We have all the ingredients of a comparative advantage - a highly-skilled workforce, world-class infrastructure, a good regulatory system and a healthy regard for IP - except we do not yet have a globally competitive tax environment.”
Dr Lavelle says the on-going lack of venture capital in Australia makes the right tax settings critical in keeping our innovation ecosystem alive.
According to Michael Cunningham, National Head of Life Sciences, Grant Thornton, “Compliance costs and a comparably small venture capital market continue to limit in a relative sense the funding options of junior biotechnology companies.”
“Now is the time for this industry to take its rightful place as a leading Australian industry. This will only happen in an environment that supports innovation and encourage biotechnology companies to operate in Australia.”
The full report is available at the AusBiotech website.