Driving innovation

AusBiotech welcomes the federal government’s Plan for Australian Jobs, which will aid innovative companies and help support the biotechnology sector.

We at AusBiotech, along with the wider biotechnology industry, have welcomed the federal government’s release of its long-awaited Industry and Innovation Statement, ‘A Plan for Australian Jobs’, which promises a venture capital boost and a raft of programs for innovative companies. Venture capital funds of $350 million, 10 Industry Innovation Precincts worth $500 million and support for pharmaceutical clinical trials are amongst the top-billing items of interest to the biotechnology sector.

The 76-page policy document outlines the Labor Government’s plan to spend $1 billion to “boost Australian innovation, productivity and competitiveness … to support and create jobs.” Funded by a $1 billion cut for large corporations (over $20 billion in turnover) under the R&D Tax Incentive, the policy allows for new and revamped programs.

The industry’s reaction was upbeat, and I commend the government on a comprehensive top-level policy. I was pleased to see the positioning of innovation as central to jobs, productivity and a thriving economy, which is where it belongs. It’s also good to see the government has been listening to the concerns of industry, and I note the policy responds to many of the initiatives that have been well articulated by industry and AusBiotech for some years.

While the statement is very welcome, I look forward to clarifying the details of many of the policy planks and hope that the positive elements of the policy can enjoy an expedited and rapid implementation after the election is decided.

One of the pillars of the policy is to improve access to finance for innovative start-ups through Venture Australia via a $378 million package. This includes a new $350 million round of the Innovation Investment Fund (IIF); changes to venture capital tax concession programs to provide clarity for investments and facilitate ‘angel’ syndicates; a new platform to market the successes of our start-ups; and a commitment to reinvest all government returns from the package into venture capital support.

AusBiotech applauds the continuation of the IIF, especially in light of the imminent cessation of the current final round. The program has been critical to the biotechnology industry to date. Access to capital, and at the right price, is a serious bottleneck to innovation, as Australia has substantially more innovation than capital. It is fantastic to see that IIF money generated by the sector and returned to the government will be reinvested to support new innovative enterprises.

We are pleased to see a commitment to venture capital tax concession programs and would be pleased to engage with government to explore at length what is being considered in terms of preferential tax treatment for investors to ensure a suitable outcome for the sector, which will generate more investment in Australian innovation.

The government also says it will invest more than $500 million in establishing up to 10 Industry Innovation Precincts to drive business innovation and growth in areas of Australian competitive advantage. The notion of clusters was recommended by AusBiotech in its 2012 submission to the Prime Minister’s Science, Engineering and Innovation Council (PMSEIC), Chaired by Professor Chubb, and is therefore supportive of the concept. Innovation precincts can be extremely valuable in leveraging expert critical mass; however, they don’t always succeed. There needs to be a level of sophistication that takes account of natural synergies, linkages and attributes of the contributors. AusBiotech looks forward to more details about how these can be developed and where they will be located.

In acknowledgement of the Australian pharmaceutical industry’s positive outlook - exporting around $4 billion per year, employing over 40,000 people and investing more than $1 billion a year in R&D - and the current pressures it faces, the government says it will spend $9.9 million over five years to expedite the recommendations from the Clinical Trial Action Group (CTAG) Report. The recommendations are aimed at advancing Australia’s position as a leader in clinical research and improve our attractiveness as a destination for clinical research investment.

Australia has traditionally been a destination of choice for the conduct of clinical trials; however, our competitive advantage has declined over the last five years. Rising and varying costs between clinical trial sites and jurisdictions, delays in approving trials and difficulty recruiting patients are some of the causes.

We applaud the government’s support to act on the recommendations of CTAG, while noting that implementation is well overdue. The CTAG recommendations are good policy, for which the industry has been advocating for many years.