A recent report commissioned by AusBiotech sheds light on the substantial economic impact of the Research and Development Tax Incentive (RDTI) on the Australian biotechnology sector. Pivotal role of government policy The report, entitled ‘Economic impact of the Research and Development Tax Incentive (RDTI) for the biotech industry’, was developed in collaboration with Deloitte Access Economics and unveiled at the AusBiotech 2023 conference in Brisbane. It highlights the pivotal role of government policies in fostering long-term growth and innovation in the biotech industry. Over the span of a decade, from 2011 to 2021, the RDTI program yielded strong results, generating an average return of $2.18 for every dollar of tax revenue spent. By 2021, this figure had risen to an even more impressive $3.14, showcasing the compounding benefits of sustained policy support. Australia’s biotech landscape consists of more than 1,400 companies – primarily small and medium-sized enterprises, many of which are in the pre-revenue and pre-market stages. The report highlights the sector’s high research and development (R&D) intensity. For many smaller biotechs, the R&D expenditure to revenue ratio is sizeable, at up to 43% in 2022. The stability of the RDTI program over the past decade has provided confidence to industry players, enabling them to plan and execute R&D initiatives in Australia effectively. Quality of life for Australians AusBiotech CEO Lorraine Chiroiu underscored the significance of policy continuity: “This report reiterates that the policy is appropriate and working for the sector, underscoring that long-term commitment from governments to retaining the RDTI program without change has enabled such industry and economic success.” The report estimates that between 2011 and 2021, the RDTI contributed to an increase of $9.1 billion in Australian GDP. The economic impact has grown consistently, from $308 million in 2011 to over $1.6 billion in 2021, reflecting a significant expansion in company numbers and compounding productivity gains. The RDTI’s benefits extend beyond economic metrics, fuelling innovations that have enhanced the quality of life for Australians. Case studies in the report highlight breakthroughs in cancer detection, diagnosis and treatment, as well as advancements in addressing hearing loss and antibiotic resistance, underscoring the far-reaching impact of the biotech industry. AusBiotech has been a staunch advocate for the RDTI program, championing its importance since 2012 and successfully advocating for its retention in the face of proposed amendments in 2019. The report aligns with AusBiotech’s Biotechnology Blueprint and its emphasis on return on investment as a key metric, demonstrating the substantial value that the biotech sector contributes to the Australian economy.
This content was originally published here.
