Tax reform story not over for biotech industry in Australia

Building on the success of the Research and Development (R&D) Tax Incentive in Australia, industry leaders are calling for further tax reform to provide incentives for innovative manufacturing and investment, according to the Biotechnology Industry Position Survey 2013. Appropriate support from the Federal Government was the top-line issue for respondents, who urge the government to support access to capital via policy instruments and programs, says trade body AusBiotech.

The R&D Tax Incentive remains a top priority for the industry, with 66% of respondents having already seen the benefits of the policy or identify that it will have a positive impact in the future. Amongst the most pressing public policy issues, respondents repeatedly expressed concern that the R&D Tax incentive would be reduced or withdrawn - and the industry urges further tax reform to provide incentives for manufacturing and to encourage long-term investment in home-grown technologies.

Of the 24 companies that raised capital in 2012, an overwhelming 87.5% did so by issuing (diluting) equity. The capital raised was for the dominant purpose of research and development, working capital or commercialization – all critical to the survival of a biotechnology company. The industry is keen to see the Government support non-diluting forms of capital, especially the in-tact preservation of the R&D Tax Incentive, and to continue beyond that with tax reform.