"We will invest this rebate in growing the business,"he said.
Chief executive of lobby group AusBiotech,Lorraine Chiriou,said uncertainty over the research offsets policy in recent years has tempered enthusiasm for investments.
"All Australians – from bench,to business,to bedside – will benefit when this declining trajectory is reversed. Supporting[research] supports the country’s overall GDP,and will facilitate an environment that encourages businesses to invest in additional R&D to retain and grow Australian innovation,"she said.
Investors and industry experts says the Australian government should also brace for an increase in research and development tax incentive claims over the next two years as research investment and pent-up demand from trials paused throughout the pandemic leads to a boost in projects.
Managing partner of Australian venture capital firm OneVentures,Dr Paul Kelly,believes policymakers should be preparing for an increase in claims for offsets from biotech companies in the coming years.
"There have been delays in clinical trials,including across borders. There is going to be significant catch-up in 2021-2022,"he said.
When considering the price tag of that research to governments,however,the flow-on effects of this research have to be considered,he said.
"That substantial increase is also funding jobs and increasing expertise. The contract research organisations are really doing very well out of this."
Prime Minister Scott Morrison at the University of Queensland. Medical research has been front and centre throughout the COVID-19 pandemic.Credit:Darren England/AAP (pool)
In the 2020 financial year,reported spending across the top 10 ASX-listed companies by market cap was $1.9 billion,up from $1.7 billion in 2019.
This is led by blood plasma giant CSL,which spent $US921.8 million ($1.3 billion) in 2020. CSL,which has a broad pipeline of research projects including its work on coronavirus treatments,told investors last year it expects to spend between 10 and 11 per cent of its revenues on R&D into the next year.
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Australia's research and development incentives scheme has also proved critical for small cap biotechs and unlisted firms,because many are yet to generate any revenue and receive direct refunds or cash offsets for their spending.
For businesses in the commercialisation stage,these refunds ticked upwards in 2020. COVID nasal spray developer Starpharma received a $5.7 million refund for costs over the past financial year,up from $4.9 million the year prior.
Cancer imaging startup Telix Pharmaceuticals reported a $5.8 million offset for the half,up from $5.3 million the same time last year.
Cash has been splashed throughout2020 in hopes that Australia's medical research prowess can help power the post-COVID economic recovery,particularly in Sydney and Melbourne.
When asked whether there will be greater scrutiny over research tax claims amid as R&D accelerates,a spokesman for the department of industry,science,energy and resources said the onus was on companies to ensure any claims they made were for genuine research activities.
"The department will continue to take a risk-based approach to reviewing applications and may examine registrations to ensure they comply with the eligibility requirements of the program,in line with standard practice,"they said in a statement.
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