AUSTRALIA’S INNOVATION SECTOR CALLS FOR URGENT RETHINK OF RDTI REFORMS

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Seventeen of Australia’s leading innovation, science and technology organisations, including the Medical Technology Association of Australia (MTAA), have united by signing a joint letter to Treasurer Jim Chalmers calling for urgent consultation on proposed changes to Research and Development Tax Incentives (RDTI), warning the reforms could discourage investment and drive research, development, manufacturing and jobs offshore.

As the peak body for Australia’s medical technology industry, MTAA has led engagement with senior Government representatives to highlight the potential impact of the proposed reforms on companies commercialising Australian innovations and the Australian economy.

While welcoming the Government’s broader commitment to research and development, the industry has raised concerns about two proposed changes:

• limiting refundable RDTI offsets to companies less than 10 years old; and
• changes to the treatment of supporting R&D activities.

MTAA CEO Ian Burgess said the reforms risk undermining Australia’s ability to turn world-class research into successful Australian companies.

"Australia is world-class at inventing new technologies but too often the investment, commercialisation and jobs end up overseas. We should be strengthening incentives to build and scale companies here, not introducing changes that make it harder for innovative businesses to secure the capital they need to grow."

“For many MedTech companies, the ten-year mark is not the end of the innovation journey—it is when investment in clinical evidence, regulatory approvals and commercialisation is accelerating. Removing support at this point could push investment and opportunities offshore.”

The sector’s concerns echo findings in the Government’s own Ambitious Australia agenda, which identified higher levels of private-sector R&D investment as critical to future economic growth and productivity.

The proposed RDTI reforms also come at a time when the MedTech sector continues to engage with Treasury on proposed Capital Gains Tax (CGT) reforms. As a result of MTAA’s engagement, Treasury’s consultation paper acknowledged the need for MedTech-specific carve outs, however, work on those reforms remains ongoing.

Mr Burgess said the combined impact of the two policy changes risked creating further headwinds for investment in Australian MedTech innovation.

“Treasury has recognised that MedTech faces unique commercialisation challenges, but significant concerns remain. When considered together, the proposed CGT and RDTI changes create a difficult investment environment for an industry that already faces constrained access to capital.”

According to MTAA, the proposed reforms could have implications for the broader economy.

“Australia has world-class researchers and innovators. The challenge is ensuring we have the policy settings needed to turn those ideas into successful Australian companies and industries.”

The joint signatories have requested an urgent meeting with the Treasurer and stand ready to work collaboratively with Government to ensure Australia’s tax settings continue to support investment, innovation and national productivity.

“We support the objective of reform and welcome the opportunity to work with Government on solutions that strengthen Australia’s innovation ecosystem and long-term economic competitiveness.”

Letter signatories are:

AusBiotech, ANDHealth, Association of Australian Medical Research Institutes, AUScelerate, Australian Academy of Technological Sciences and Engineering, BioMelbourne Network, BioNSW, Cicada Innovations, Jumar Bioincubator, Life Sciences Australia, Life Sciences Queensland, Life Sciences WA, Medical Technology Association of Australia, Medicines Australia, Pathology Technology Australia, Research Australia and Science & Technology Australia.

For more information, contact:

Justin Foster

Associate Director, Advocacy and Government Relations, MTAA

media@mtaa.org.au 

ENDS

About MTAA: 

The Medical Technology Association of Australia (MTAA) is the peak association representing companies in the medical technology industry. MTAA aims to ensure the benefits of modern, innovative and reliable medical technology are delivered effectively to provide better health outcomes to the Australian community.

MTAA’s membership spans Australian start-ups through to global MedTech leaders. Our members develop, manufacture and supply medical technologies used in the diagnosis, prevention, treatment and management of disease and disability. The range of medical technology is diverse, with products ranging from familiar items such as syringes and wound dressings, to high technology implantable devices such as pacemakers, defibrillators, and orthopaedic implants. Products also include hospital and diagnostic imaging equipment such as ultrasounds and magnetic resonance imaging machines, as well as digital health technologies such as remote monitoring devices and digital therapeutics.
 
MTAA members distribute the majority of non-pharmaceutical products used in the diagnosis and treatment of disease and disability in Australia. Our member companies also play a vital role in providing healthcare professionals with essential education and training to ensure the safe and effective use of medical technology.