AusBiotech CEO outlines key topics affecting industry

Biotech News: Lorraine Chiroiu, CEO of AusBiotech shared important insights on the R&D tax incentive, changes to employee share schemes (ESS) and the announcement of a Patent Box for Australia during the recent ARCS conference 2021.

“The refundable component of the R&D tax incentive is the most critically important support for companies. I would argue that it’s been the biggest lever in the growth of our clinical trials in Australia. It needs a long-term bipartisan commitment to its stability and certainty,” she said.

The ESS tax incentive is little known to many but it’s very important for small business, particularly businesses that are pre-revenue. It is there to support start-ups and SMEs to attract and retain leading talent, without necessarily paying the salary that is commensurate with such skills. It enables companies to offer company shares and make salary packaging more substantive and attractive.

Previously employees would be taxed on their shares when they left the organisation that they were working for. They will now only be taxed when the owner of those shares actually received a profit. This makes the offer far more desirable and will strengthen Australia’s position to attract the best and brightest employees.

AusBiotech was very pleased to see this change announced as they advocated for it for many years.

“Last month’s Budget also delivered an important commitment to supporting biotech manufacturing through the announcement of a Patent Box policy for the sector. The new policy will offer lower tax rate for locally developed IP and thereby creating an incentive to stay in Australia as the benefits from manufacturing pay back into the economy,” Ms Chiroiu continued.

“It’s key to Australia being globally competitive for its own knowledge and innovation and to build our capability in skills, manufacturing and clinical trials,” she added.

AusBiotech and the industry have long identified that while Australia holds world leading research, more work is needed to encourage university research commercialisation. Extracting technology from universities into the start-up environment is hampered by lack of experience and knowledge available in Australia, specifically around commercialisation.

“The point of greatest value is not when the research is spun out or becomes a company, but when the company has completed the journey to market. The greatest value comes at the point when it’s commercialised and reaches the ultimate beneficiaries, the patients. We’re looking forward to working with the government to progress this long identified issue,” she stated.

Lastly, Ms Chiroiu discussed TGA’s current operational model of a cost recovery model that recovers 100% from industry, while their remit is broader than just industry.

“What I wish for them is to receive additional government funding support to be able to broaden this important work,” she concluded.