The Life Sciences industry in Australia will be hit disproportionately hard by proposed changes to the R&D Tax Incentive, putting smaller companies at risk and threatening the sector’s ability to deliver new trials, treatments and technologies.
Industry group AusBiotech has released new data that suggests the negative impacts on the biotech sector will more seriously impacted than other industries involved in research and development by the proposed cuts to the R&DTI.
The group commissioned new research to better understand the specifics impact on Life Sciences in response to the Senate Inquiry’s recommendations last February that a new Bill proposing changes to the R&DTI be significantly re-written.
AusBiotech says it felt blindsided by government’s re-introduction of a substantially unchanged Bill to the Parliament during the last sitting week of the year.
AusBiotech has now released its report R&D Tax Incentive: Additionality and spillovers for the life sciences industry and says the Life Science-specific data is significantly different to the more generalized dataset in the original Centre for International Economics (CIE) report.
The key findings in the report found 63 per cent on Life Science respondents said the R&D Tax Incentive materially influenced the decision to conduct research, and 61 per said the proposed changes would not only affect their spending on R&D but would threaten the sustainability of their business.
Some 57 per cent of Life Sciences respondents advise that proposed would have an impact on on the amount of R&D their companies undertook in the future, with 29 per cent anticipating a reduction in R&D.
AusBiotech has identified eight specific issues in the proposed changes to the RDTI that it says must be addressed.
In particular, it highlights the treatment of companies undertaking R&D as isolated operators without taking into account the broader ecosystem and horizontal relationships in which these organisations coexist and collaborate.
“For the first time biotech has hard evidence that the benefits that the industry’s R&D environment brings is different, and this distinction needs to be acknowledged and mitigated before any proposed changes to the RDTI go ahead,” AusBiotech chief executive Lorraine Chiroiu said.
“The sector brings significant social and economic contributions to Australia, and the impacts of the proposed changes will be felt across the ecosystem – from bench, to business, to bedside.”
The report said that whereas engineering and mining R&D have the potential to increase productivity or stimulate demand for employment, life sciences research offered significantly broader spill-over value, including expanded public welfare outcomes.
“Accordingly, additionality for the life sciences sector should include extra weighting for the health benefits (and their economic additionality) being delivered, and for activity being retained in Australia,” the report said.
“R&D in the biotechnology sector is unique, both in its development challenges and in its output products. It is IP-based, heavily regulated and R&D-intensive and a highly globally-mobile industry.
“Life sciences offers high value jobs and a growing and sustainable contribution to GDP. Its products provide the greatest public good; from cancer treatments to helping people hear, they are life-saving and life enhancing,” it said.
“Biotechnology has the capacity to address the big issues of our time, such as food security, alternative fuels, ageing populations, personalised gene-based medicines and diagnostics, climate change and access to clinical trials.”
Do you know more? Contact James Riley via Email.