A survey of companies aged 6 to 15 years shows that nearly 100 per cent expect moderate or significant impacts from the proposed capital gains tax changes, with many citing reduced Australian investment, job losses, and fewer clinical trials.
The survey found that 82 per cent of biotech companies six years and older agreed they would experience a significant impact. 36 respondents (61 per cent) said the proposed changes to the Capital Gains Tax (CGT) would negatively affect them.
The concern over CGT changes is compounded by proposed changes to the Research and Development Tax Incentive that would eliminate the cash refund component for companies over 10 years old.
Under the proposed CGT changes, a minimum 30 per cent tax rate will be applied from 1 January 2027.
AusBiotech chief executive Rebekah Cassidy said the survey adds to growing evidence that the proposed changes will do harm and must be reversed to restore certainty and confidence in the sector.
“The results send a clear message – companies already know they will be worse off under these changes, and if implemented as proposed, many will choose to leave,” Ms Cassidy said.
Ms Cassidy warned of wide-reaching consequences if the proposals proceed. She said, “The changes could cause irreversible damage to our vibrant and world-leading biotech, medtech and health tech sector.”
“Decisions about where clinical programs are located, where investment is deployed and where companies establish long-term operations are being influenced by perceptions of Australia's future competitiveness," she said.
“The proposals are at odds with existing Government policy, which is confusing for the sector. For example, ‘Biotechnology’ is one of the Australian Government's seven Critical Technologies in the National Interest and a priority sector for the National Reconstruction Fund, while ‘Health and Medical’ is the first pillar of the Ambitious Australia: Strategic Examination of R&D report.
“Biotech is a major economic success story, supporting more than 350,000 jobs across almost 3,000 organisations. It makes no sense to jeopardise a sector which contributes so substantially to our economy and prosperity.
The AusBiotech chief executive also stressed the sector’s economic importance, highlighting that it supports more than 350,000 jobs across almost 3,000 organisations, and urged the government to act. “We have been working with the sector on options to help Government to urgently fix the unintended outcomes of these poorly conceived proposed policy settings and get them right so that the sector can continue to grow, thrive and save lives. We just need Government to urgently meet us at the table,” she said.