AusBiotech submits to Senate Inquiry into Australia's Innovation System

AusBiotech’s substantive submission to the Senate Standing Committee on Economics’ Australian Innovation System inquiry has called for tax reform, support for commercialisation, incentives for commercial thinking and clinical trial reform.

AusBiotech said that public policy plays a critical role in the development of the biotechnology industry: by incentivising desirable behaviours/choices 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.

AusBiotech said that with the right policy settings for innovation, Australia’s biotechnology industry has the capacity to be a major contributor to our economy as well as our lives. The submission recommended:

• Reforming tax to make incentives an asset for innovation and business in Australia. As R&D and patent box incentives become more commonplace around the world, a number of governments have demonstrated that to stay competitive, it is necessary to offer a competing tax and business environment. AusBiotech advocates for four pillars:
  - Retain the R&D Tax Incentive intact and lift the $20 million cap for the refundable component to $50 million in line with the Cutler recommendations of 2008.
  - Introduce the AIM Incentive, to enable Australian innovation to be internationally competitive, and retain the associated benefits once our research reaches commercialisation.
  - Introduce fiscal incentives for investors in pre-revenue and start-up companies to encourage ‘patient’ venture capital.
  - Restore the Employee Share Scheme to its pre-2009 form, especially for small companies.

• Address Australia’s recognised problem in translating our world-class research, by supporting commercialisation via:
  - The dedication of a significant portion of the Medical Research Future Fund proceeds, material to achieving the policy intent, to the translation of research, in line with the McKeon Review recommendations.
  - The establishment a Translational Biotech Fund to manage and deliver the abovementioned funds.
  - Providing measures as incentives for researchers and early researchers to think commercially, such as commercial measures of success such as patents as well as publications.

• Reform processes related to clinical trials to enable Australia to retain a healthy clinical trial component to its innovation ecosystem by:
  - Delivering on the 11 recommendations of the Clinical Trials Action Group (CTAG).
  - Achieving this by implementing the recommendations of the McKeon Review to create a national clinical trials office within the health and medical research leadership body to drive clinical trial reforms and establish and manage 8-10 national ethics committees.

AusBiotech made the submission in the belief that biotechnology is a core element of our future, both in social and in economic terms, globally and for Australia. The mapping of the human genome marked the opening up of a whole new world of bioscience and of its potential to underpin innovative and knowledge-based economies and industries. Australia, recently ranked fourth in the world for its biotechnology achievement, has the opportunity to exploit its strength by investing in a sustainable ecosystem - or to waste the momentum it has built.

A number of the Terms of Reference to the inquiry align with AusBiotech’s recent advocacy; in particular, the industry welcomes the inquiry’s focus on translation of research into benefits for Australians, an often-overlooked problem in Australia’s innovation ecosystem, and supports the creation of “a seamless innovation pipeline”.

AusBiotech also welcomed the spotlight on the relationship between advanced manufacturing and a healthy innovation system, and the role of public policy in nurturing a culture of innovation.

Submissions to this inquiry are published here and AusBiotech’s submission can be found at Number 131.