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Seventeen Australian medical and science organisations have written to the Albanese Government raising concerns about proposed changes to the research and development tax incentive (RDTI) outlined in the Federal Budget.
The organisations, spanning biotech, medtech, health tech, pharmaceuticals, science and research, have co-signed a letter to Treasurer Jim Chalmers requesting a meeting and calling for an industry consultation process. The groups argue the proposed changes are already affecting business investment decisions despite not being scheduled to take effect until 2028.
The proposed changes
Two changes to the RDTI sit at the centre of the dispute.
The first would limit the refundable RDTI offset to companies less than 10 years old. The second would remove eligibility for “supporting” R&D activities from the incentive.
AusBiotech CEO Rebekah Cassidy warned the proposed changes would have a lasting impact on Australian science, including the biotech, medtech and health tech sector.
“Australia’s growing biotech, medtech and health tech sector is dedicated to improving and saving lives, but has been at a crossroads since Budget night,” Ms Cassidy said.
“Limiting the refundable RDTI offset to companies less than 10 years old does not align with the reality of what are well documented, lengthy development timelines to bring new health and other STEM innovations to market. Ten years is not a long period in life sciences and other science-based industries.”
Development timelines at odds with the age cap
Ms Cassidy pointed to the lengthy regulatory and development processes that Australian biotech, medtech and health tech companies must navigate.
“Australian companies are developing products that are by necessity highly regulated. They navigate long, R&D intensive phases of pre-clinical development, clinical trials, clinical manufacturing and scale up, regulatory approval and market access. There are simply no short cuts, and nor should there be,” she explained.
“While the intent of the RDTI change is understood, company age is a poor proxy for commercial maturity, growth potential or R&D intensity in science-based sectors like life sciences.”
Risk of pushing development offshore
The coalition of organisations argues the changes could have the effect of pushing later-stage development activity out of Australia.
“The proposed changes risk encouraging early-stage research in Australia while pushing later-stage development, manufacturing and commercialisation activities offshore. The latter part is where the most economic opportunities and potential lies, and we don’t want to lose it,” Ms Cassidy noted.
She also raised concerns about the second proposed change, arguing that changes to the treatment of “supporting R&D” activities could unintentionally exclude work from RDTI eligibility that is critical to developing technologies onshore, such as the manufacture of products for clinical trials.
Investment decisions already being shaped
Ms Cassidy stressed that while the changes are not due to take effect until 2028, they are already influencing investment decisions across the sector.
“This is a globally mobile and connected sector where major markets are actively seeking to attract the talent and capability we have fought so hard to build over decades in Australia,” she observed.
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“Decisions about where clinical trials are undertaken, where investment is deployed and where companies establish long-term operations, including manufacturing, are made years in advance and are now being influenced by perceptions of Australia’s future competitiveness.
“Let’s be clear, while the changes aren’t due to take effect until 2028, they are already influencing decisions. Our sector is urgently seeking a meeting with the Treasurer and a consultation process to bring forward a resolution.”
A pathway forward
Ms Cassidy called on the Government to engage with industry on the proposed changes, arguing there was still room for a workable outcome.
“There is a pathway forward. We want to work collaboratively with Government to get these policy settings right, so that Australia’s life sciences and science-based industries can continue to grow and prosper,” she added.
The signatories
The 17 organisations that co-signed the letter to the Treasurer 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.
AusBiotech represents more than 3,500 members across Australia’s life sciences sector.
Last Updated on July 5, 2026 by Nick Ross
