New R&D tax credit to boost Australian research
New legislation passed by the Senate will help make Australia more globally competitive as a destination for pharmaceutical investment in research and development, Medicines Australia chief executive Dr Brendan Shaw said today.
Dr Shaw said the Tax Laws Amendment (Research and Development) Bill 2010 will introduce a tax credit that will reduce the cost of eligible R&D by up to 10 per cent.
“This legislation will give companies a real incentive to boost their R&D investment in Australia,” Dr Shaw said. “This is a big step in the right direction to ensure Australia remains competitive in the face of strong overseas competition.
“The medicines industry is one of Australia’s key high tech manufacturing industries, employing 14,000 people in high-skill jobs. It exports $4 billion annually, putting it ahead of the car and wine industries.
“Although Australia has strong capability in developing medicines, there’s no doubt Australia’s medicines industry, like much of the manufacturing sector, is under increasing pressure from overseas competition.
“Medicines Australia has consistently supported the Federal Government’s changes and it has been a complex debate over the last two years. Thankfully the R&D tax credit will finally become law. It brings Australia’s R&D tax incentives into the 21st century.”
Last year a KPMG report found that implementing the tax credit would place Australia at the top of the KPMG ranking of the most competitive locations for R&D investment, ahead of countries such as Canada, the UK, Germany, France and the United States.
Dr Shaw said the new R&D tax credit will help keep Australia at the forefront of medical research globally and will help secure high-value research jobs.
“It will help encourage companies to conduct R&D in Australia and attract greater investment to our universities and other research institutions,” Dr Shaw said.
“R&D sustains Australia’s medicines industry and provides thousands of high-paying jobs.
“I congratulate the Parliament for passing this landmark legislation and for making this important change.
“I particularly congratulate the Minister for Innovation, Industry, Science and Research, Senator Kim Carr for patiently championing this important Bill for over two years.”
The medicines industry is Australia’s largest manufacturing investor in R&D, attracting more than $1 billion in R&D investment in 2008-09.
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