Medicines Australian warns government on R&D tax credit

Winding back the R&D tax credit, which was introduced by the Australian Federal Government last year, would discourage investment in the country and cost high-value research jobs, Medicines Australia chief executive Brendan Shaw warned yesterday, responding to recent media reports of possible changes to the R&D tax credit in the Federal Budget.

“Scaling back the R&D tax credit would be extremely damaging to R&D investment in Australia,” Dr Shaw said, adding: “Such a move would put a brake on investment at the very time when policy makers are trying to stimulate growth. It would effectively add up to 10 per cent to the cost of investing in Australian R&D and would put at risk hundreds of high-skill, high-wage research jobs. Australia currently attracts more than A$1 billion a year in pharmaceutical R&D investment. That investment would diminish if there were any winding back of the tax credit. There would be some companies that would simply stop bringing R&D investment dollars to Australia.”

Tax credit only operating for less than a year