R&D tax credit system to encourage investment
The Federal Government’s decision to replace the R&D tax concession with a new R&D tax credit will provide an important boost to investment in Australian clinical research, Medicines Australia chief executive Ian Chalmers said tonight.
However, Mr Chalmers said he was extremely disappointed that, for the first time since 1988, there will be no Government support program for Australia’s pharmaceutical industry.
“I do welcome the measure to replace the R&D tax concession with a new R&D tax credit, and the Super Science support for biotechnology,” Mr Chalmers said.
For most Medicines Australia member companies, the tax credit will be equivalent to a 133 per cent concession and, significantly, will be open to foreign-owned companies with a turnover of more than $20 million per annum.
The tax credit is decoupled from the corporate tax rate and therefore creates certainty in the level of assistance.
Meanwhile, Mr Chalmers said Medicines Australia would seek dialogue with the Government to explore opportunities to enhance Australia’s competitiveness as a destination for R&D investment.
“The absence of budgetary support for the Pharmaceutical Industry Strategy Group’s recommendations is extremely disappointing,” Mr Chalmers said.
“This will be the first time for 21 years that there will be no dedicated industry support program to promote investment in this valuable knowledge-based industry. The PISG proposals were part of the solution to the current economic crisis.
“We need to find other means to demonstrate the Government’s commitment and priority for the innovative pharmaceutical industry.
“The PISG’s clinical trials recommendations are a clear example of an initiative that would benefit the healthcare sector. This measure would cost the Government very little.
“Medicines Australia is very keen to work with the Government to secure Australia’s position in the global innovative pharmaceutical industry.”
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