RDTI shows increasing returns from foregone tax revenue, says new report

Industry organisation AusBiotech has released a new report calculating the return from the federal R&D tax incentive reached $3.14 for each dollar of forgone tax revenue.

The Economic impact of the Research & Development Tax Incentive for the biotech industry report (linked here) was developed with Deloitte Access Economics, and estimates that the RDTI for the biotech sector boosted Australian GDP by $9.1 billion for the period 2011-2021, 

The economic impact of the incentive increased from $308 million in 2011 to more than $1.6 billion in 2021, reflecting “a substantial expansion in company numbers and compounding productivity gains” according to AusBiotech. 

The return on RDTI increased over the ten-year period from $1.32 per dollar in 2013 to $3.14 in the last year measured. The increase was described through “compounding productivity gains”, and of particular relevance given the life science sector’s long lead times.

“This new report demonstrates the value of sustained investment in the sector over time,” AusBiotech CEO Lorraine Chiroiu said in a statement on Wednesday. 

“It also showcases what is possible when policy design is fit for purpose and supports the needs of industry. The foresight of the Federal Government to implement such a scheme in 2011 has led to a significant uptick in economic activity which will be felt for decades to come.”

The report’s release coincides with AusBiotech’s 2023 conference, running from Wednesday to Friday this week at the Brisbane Convention & Exhibition Centre.

Picture: credit Picture: Antara Life Sciences