Action urged to capitalise on opportunity as Budget tables reveal loss of support

The release of the federal government’s Science, Research and Innovation Budget Tables this week reveals the losses of almost $400m to science, research and innovation, prompting AusBiotech to reinforce its calls for urgent and specific action that will drive growth in the biotechnology industry and, therefore, the Australian economy.

AusBiotech is urging federal government action to capitalise on the opportunity that Australian biotechnology represents, acknowledging the critical role public policy plays in the development of the industry and, in turn, industry’s ability to deliver to the economy with jobs of the future, as well as the new technologies that enhance and extend our lives.

By incentivising desirable behaviours to build Australia’s innovation ecosystem in a global context, such as providing globally competitive tax policy, and in providing support where the ecosystem currently has gaping holes, the government can make a pivotal difference to our economic prospects.

Australia has a strong comparative advantage in its burgeoning biotechnology and life sciences industry that is globally impressive by any comparative measure, current ranking fourth in the world. However, as the cuts bite and the problems continue, the window of opportunity to take advantage of our momentum in innovation and biotechnology is closing. 

As noted in its submission to the Senate Inquiry on Australia’s innovation system, AusBiotech (#131) advocates for:

• Tax reform to make incentives an asset for innovation and business in Australia, with four pillars:

1. Retain the R&D Tax Incentive intact, introduce quarterly payments for the refundable component and lift the $20 million cap for the refundable component to $50 million in line with the Cutler recommendations of 2008;
2. Introduce the Australia Innovation and Manufacturing Incentive - a patent-box style incentive to enable Australian innovation to be internationally competitive - and retain the associated benefits once our research reaches commercialisation;
3. Introduce fiscal incentives for investors in pre-revenue and start-up companies, to encourage ‘patient’ venture capital; and
4. Restore the Employee Share Scheme to its pre-2009 form, especially for start-up companies.

• Addressing Australia’s recognised problem in translating our world-class research by dedicating a material portion of research funds to the translation of research into therapeutic products, in line with the McKeon Review recommendations. A key element of the report was the strengthening of commercial pathways to ensure the translation of research outcomes into health and economic benefits for the Australian community, recommending that funding address the twin ’valleys of death’ in commercialising research and calling for the establishment a Translational Biotech Fund.
  The McKeon Review recommendations were made before Commercialisation Australia and the Innovation Investment Fund were cut in the May Budget. This removal of the remaining support for commercialisation means there is now an even greater need for the Translational Biotech Fund if we are to see benefits flow from the proposed nation-building Medical Research Future Fund.
• Reforming clinical trials by delivering on the 11 recommendations of the Clinical Trials Action Group (CTAG) and implementing the recommendations of the McKeon Review. 

As Australia’s window of mining-driven prosperity begins to close, and car manufacturing phases out, it is widely acknowledged that building Australia’s capacity as a technologically innovative country is vital for our economic future. With the right policy settings for innovation, Australia’s biotechnology industry has the capacity to be major contributor to our economy as well as our lives.