Thanks to COVID-19, early October saw the first Australian federal budget delivered in a recession in 30 years.
The Treasurer said personal income tax cuts, infrastructure spending, and business incentives would create jobs and boost consumer spending.
The government is clearly signalling a shift to high technology by announcing the following priorities areas for investment:
- Resources technology and critical minerals
- Food and beverages
- Medical products
- Recycling and clean energy
Support for the refundable component of the Research and Development Tax Incentive has been increased 5 percentage points from earlier proposals and the much feared $4 million cap that had been proposed on annual cash refunds won’t be implemented.
The R&D expenditure threshold has also increased from $100 million to $150 million (previously announced).
The budget retains the current level of support for Small and Medium-sized Enterprises (SME’s) providing certainty and investment confidence.
2020 Budget Secures Industry Wide Support
The budget has been welcomed by the Biotech, Pharma and Medtech industries, who had all submitted their policy priorities to the Government.
AusBiotech has stated that they believe the Research and Development Tax Incentive (RDTI), alongside support for medical manufacturing, will incentivise R&D and manufacturing growth.
Medicines Australia has welcomed the guaranteed funding commitment, worth at least $2.8 billion over 4 years, which will bring greater certainty for Australian patient access to new and innovative medicines.
An important point to note is that this guarantee removes the requirement for a cost offset for new medicine listings on the Pharmaceutical Benefits Scheme (PBS). This will allow medicines to be listed for reimbursement faster, without the need to find additional savings from other parts of the health budget.
The Government has also committed to maintaining the transformation of health delivery seen with COVID-19, including home delivery of medicines, tele-health and digital reforms to the TGA.
An allocation of $12 million has been recommended for upgrading the TGA’s IT systems, which were developed in the late 1990s, and will ensure the TGA is in a position to track applications and be better placed to approve life-changing and lifesaving medical technology innovations.
Medical Technology Association of Australia (MTAA)
The Medical Technology Association of Australia (MTAA) has also praised the budget.
The budget includes $3.3 billion for the COVID National Medical Stockpile, which includes $9.2 million for increasing onshore mask manufacturing capability. MTAA made a recommendation that the government replenish and build the stockpile with a portion of locally manufactured essential items, which will ensure the industry cements its place in the ongoing provision of healthcare to Australians.
Medicines Australia CEO, Ms Elizabeth de Somer , summed up the budget well –