It has been said “Brazil is the country of the future and always will be.“. Let us hope that a similar sentiment is not expressed of the MedTech sector in twenty years hence! The Biotechnology and Medical Device sectors in Australia have an incredible potential to create growth, jobs and tax dollars for Australia. Create opportunities, not displace these opportunities from other sectors.
We have world class research, healthcare system and medical professionals, yet the commercialisation track record is chilling. In terms of intellectual property it is as if we dug up all our iron ore and sent it overseas without bothering to include an invoice. We are throwing away these opportunities.
Barry Thomas, the Vice President and APAC Managing Director of Cook Medical Australia, recently wrote of the great opportunity presented by the G20 meeting this year, to be held in Australia. A chance for Australian industry in general to shine and for the Medical Device space in particular. Barry has been a groundbreaking promoter of AIM, or “Patent Box” as it is known in the UK, for several years now. Along with AusBiotech and the MTAA, Barry has been pressing the case for this essential innovation in our tax system.
The push for the AIM system has also been voiced by Lorraine Chiroiu, the Communications and Media Manager at AusBiotech, who has noted the decision by CSL to locate their new facility in Switzerland rather than Australia, citing the absence of the AIM Tax Incentive as critical in this LinkedIn Blog. In the AFR report on the decision, CSL explains that $500M worth of investment and 500 Jobs have gone to Switzerland rather than Australia.
This shows that a tax break for IP related manufacturing investment does not lose tax dollars, but rather creates tax dollars. Instead of nothing, which is what we get now from this CSL investment, we would have the profits of the manufacturing taxed at, say, 10% rather than the normal 30% PLUS the PAYG tax earnings from 500 jobs. The flow on effects from having hi-tech manufacturing in science and technology do not even have to be calculated to make the AIM proposition compelling.