AusMedtech responds to the TGA's review of the low value turnover exemption scheme

AusMedtech has told the TGA’s review that it is concerned that only a very low number of small businesses are taking advantage of the low value turnover exemption (LVT) scheme, despite the eligibility of their products.

AusMedtech said it believes that, while the use of the current scheme has drifted from the original policy intent, there remains a contemporary policy need for an LVT scheme. Therefore, AusMedtech said it does not support the cessation of the scheme, which was one of the options posed by the review, and instead supported an alteration to the scheme to realign the actual use of the scheme with desired policy aims.

The main reasons cited for AusMedtech’s small businesses not using the scheme were:

• When eligible for the scheme, the administrative burden of applying for the exemption under this scheme can outweigh the benefits.
• A lack of awareness that the scheme exists.
• Even when made aware of the scheme, they have not actually been eligible due to the threshold being below their first year’s anticipated revenue.

The opinion conveyed by AusMedtech members suggests that the threshold has been set too low to compensate for the investment that has been made. If it were higher, this would assist greatly in getting these companies through the critical first year of business and the exemption would likely only be needed for that first year.

AusMedtech proposed that the objectives of the amended scheme should be primarily to:

• Support the provision of therapeutic goods that might otherwise not be viable in the market.
• Support equivalent access to the program for small companies.

Ideally, both of these objectives can be achieved within the framework of a least-burdensome approach to administering such a scheme. Specific comments were provided in the AusMedtech submission in response to each option proposed by the TGA’s consultation paper.

The full submission can be found here.