CSL is one of Australia’s greatest business and technical success stories and its shares have provided one of the best returns on the ASX among listed companies over the past decade.
CSL has also been a very strong advocate of the R&D Tax Incentive and lobbied for maintenance of a strong and stable incentive to encourage local investment in R&D.
In an article published in The Australian Financial Review, Paul Perreault, the CEO of CSL, says a bipartisan approach is needed to innovation policy, after it was revealed recently that The Labor Government plans to not legislate the medical and biotech patent box scheme which was proposed, but not passed into law by the former Coalition government.
The proposed policy would have seen profits from a medtech or biotech patent taxed at 17%, and was backed by CSL as well as other medical giants like hearing implant company Cochlear.
Perreault told The Australian Financial Review that consistent policy on innovation would be “the best thing for Australia”, and that there were many ways to encourage ground breaking medical research, but the key for Australian governments was to pick a policy and “stick to it”.
“I think what the government needs to do is continue to support innovation. If that’s in terms of tax credits, or if it’s in terms of other schemes… you need an innovation policy that is sustainable through every administration and every party.”
“I keep saying this, but I’m not sure they’re listening to me.”
CSL, a leader in the plasma and immunoglobin spaces, released its half year results this week and has delivered a US$1.6 billion profit.
The company invested more than 8% of its revenue into R&D in the first half of the 2022-23 year, with Perreault noting “our R&D pipeline is in great shape and we look forward to bringing more innovative therapies to patients in the future”.
However, he says, “if Australia wants to innovate, and they [the government] want people to understand what is coming out of Australia, and to actually do translational medicine from the innovation that stems from Australia, you need to have policies that support that and don’t go away”.
“You can do that through patent boxes, through incentives, rebates, tax credits – it doesn’t really matter. Just pick one and stick to it.”
CSL’s statements align with Swanson Reed’s previous submissions calling for stability on innovation and R&D Tax Policy.
On a positive note, at this stage, The new Labor Government does not appear to propose any changes to the R&D Tax Incentive, and hopefully none are forthcoming in the May 2023 Federal Budget.
Swanson Reed’s view is that if a patent box tax incentive were to be forgone by Australian companies in exchange for a stable R&D Tax Incentive, that would be a much better outcome for industry at this present time.