Over the past week, The Australian has featured articles quoting Australia’s two leading medical technology companies, CSL and Cochlear, calling on the Australian government to deliver consistent R&D Tax incentives after four years of policy review and uncertainty.
The article comes at a time when Parliament and the Senate are again considering an R&D Tax Reform bill, which was not enacted as law during a previous attempt following concerns raised by the Senate Economics Committee, largely due to complexity of the proposed intensity threshold.
Key points raised in the recent article include the following:
Global pharmaceutical giant, GlaxoSmithKline, was also quoted expressing concerns around the proposed intensity threshold, stating the definition could be a disincentive to manufacturing in Australia. “There is a high cost base involved with advanced manufacturing. As a result, GSK has higher levels of annual expenditure in Australia than other companies that also conduct R&D in Australia, without a manufacturing presence.”
It is also important to note that Cochlear and CSL may be one of the very few companies that may actually benefit from the proposed R&D Tax Reforms due to the proposed increase in the cap on R&D Expenditure from $100M to $150M, yet they still express concerns regarding the broader impact of the proposed changes on the framework for encouraging businesses to undertake Australian R&D Activity.
Swanson Reed calls on all sides of policy to commit to a stable R&D Tax Policy, and to particularly reconsider the unworkable proposals around the Intensity Threshold reform.