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Bio Technology : July 2009
AusBioWELCOME CEO & Chair Report The hard work pays off as refundable tax credits are delivered in the Federal Budget… Drs Anna Lavelle and Deborah Rathjen, AusBiotech’s CEO and Chair, briefing the media. Image provided courtesy of Ian Sharp, Australian Life Scientist. While still smarting over the abrupt loss of the Commercial Ready program in last year’s federal budget – the biotech sector this year has much reason to be hopeful of a bright and prosperous future. Heeding AusBiotech’s call, the Government has delivered a resounding win for biotechnology with significant tax reforms. The Government’s long-awaited response to the Innovation Review came in the May budget with a raft of announcements for science and innovation, with the most important change for AusBiotech members being the R&D tax credits. Australia is now one of only five countries around the world to introduce a refundable tax credit and one of only 15 to offer a tax credit regime. The 45% refundable tax credits (for companies with turnover up to $20m) represents the most significant reforms to tax-based innovation policy since the R&D tax concession was introduced in 1986. Estimates (based on 103 listed companies only) suggest that biotech companies with turnover of up to $20m together stand to benefit from around $187m* in refundable tax credits annually, equivalent to $62m* in cash flow support. It is further estimated that benefits to unlisted companies may at least double these figures in terms of benefit back to the sector. The Government’s announcement of $196.1m for the Commonwealth Commercialisation Institute has prompted much speculation, with the articulated aim of “making the most of home grown innovations” and its intention to develop the model in consultation with industry. AusBiotech will now work with the Government to ensure the institute delivers optimal value for the biotech industry. The $8.58b budget package was an appropriate – albeit belated – response to AusBiotech’s year-long campaign for government support for industry, in these unprecedented and difficult times. Our Government was asked to look at countries around the world, where governments recognise the value of the industry and have responded with budget and stimulus package dollars to support biotechnology. In the final week before the Budget, BIO President and CEO, Jim Greenwood, backed us with a letter to Prime Minister, Kevin Rudd, urging him to support “this critical industry in these critical times”. AusBiotech’s success is testimony to dedication, and the commitment and mobilisation of its 4 Australasian BioTechnology Volume 19 • Number 2 • July 2009