Australian Patent Box a bold measure for extraordinary times

By Dr Samih Nabulsi

Cook Medical Australia has long been a vocal supporter of a patent box style tax regime for Australia and therefore welcomes the government’s 2021 Budget announcement. 

Standing shoulder-to-shoulder with our industry peers and sector peak bodies, over the last eight years we have highlighted the benefits of such an incentivised tax system and its proven ability internationally to encourage investment and drive innovation.

Over the last year, COVID-19 has demonstrated the importance of investing in local manufacturing and securing Australia’s supply chains. 

And extraordinary times call for bold measures.

The government’s recognition of the critical role manufacturing has in our economic recovery, through the establishment of the Modern Manufacturing Strategy in the 2020 Budget and now the patent box, is to be commended. 

These actions show the government is both listening to industry and understands that economic recovery relies on long-term investment in Australian innovation.

It was also particularly pleasing to see bi-partisan support for the proposed patent box regime. While the benefits are prolonged and sustainable, income and derived benefits from investment in locally developed and held patents could take years to materialise, particularly in the highly regulated medtech and biotech sectors. 

A long-term commitment to an Australian patent box regime, along with a stable R&D tax incentive program, will be key to deriving the maximum economic and social value from the resulting investment in innovation. 

And the industry is ready to demonstrate that the decision to establish the patent box scheme will be rewarding.

Perhaps a patent box’s greatest attribute is that it efficiently incentivises those contributing to sustainable economic growth by investing in and retaining local innovation. It ensures that home-grown ideas can have a significant and ongoing impact here, where they are needed most.

The proposed Australian model on first blush looks similar to the UK version, and Cook Medical would welcome the opportunity to be part of the industry consultation. The proposed tax relief incentive is significant and opens the door to a world of additional benefits for Australia and Australians, including increased investment and job opportunities. In turn, it will increase Australian exports through greater participation in global value chains.

As part of a global medical technology company, we are constantly and intrinsically looking to identify the optimal markets for innovation and investment. Robust regulatory regimes, partners for the journey to commercialisation and access to world-class talent are among the key investment considerations, and the introduction of the patent box now provides the right economic environment for Australian innovation to prosper.

Dr Samih Nabulsi was appointed to lead Cook Medical Australia in 2016 and has over 20 years’ experience in the medical device industry in Australia and globally. Samih holds a PhD in engineering and has been at the forefront in the development of innovative medical solutions and technologies working with in-house R&D teams as well as through collaborations with industry and university research partners.

Picture: Samih Nabulsi

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