New R&D tax legislation offers some welcomed changes, but still risks pushing Australian clinical trials and advanced manufacturing offshore
AusBiotech
28 October 2026
Proposed legislative changes to the R&D Tax Incentive (RDTI) risk pushing more Australian clinical trials and advanced manufacturing offshore.
Although the Government has made genuine improvements since the May 2026 Budget, the Treasury Laws Amendment Bill, introduced in the House of Representatives this week, does not meet industry expectations, with further amendments needed.
The new 15-year refundable RDTI cap fails to recognise the long timeframes needed to develop medicines and treatments, especially for complex diseases, which require long clinical trials and investment in advanced manufacturing.
The risk of this change is the loss of young Australian companies that work across some of the nation’s greatest areas of unmet medical need and the clinical trials that these companies invest in.
Some 90,000 Australians participate in around 1,850 clinical trials each year, contributing $1.6 billion to the economy and employing more than 7,700 skilled people.
AusBiotech CEO Rebekah Cassidy urged Government to amend the legislation to ensure Australian scientists and clinicians undertaking R&D in complex disease areas were not penalised simply because they are working to overcome the hardest of medical and health challenges.
“We welcome the Government’s commitment to extend the eligibility of R&D to activities 'integral' to core R&D and commitment to get this right for the sector via targeted industry consultation in early 2027,” Ms Cassidy said.
“Supporting activities play an invaluable role in the R&D process. We have been prosecuting this case since the proposals were first announced in May, and we acknowledge the willingness of Government to listen to the concerns of our members and industry.
“While we also recognise that Government has extended refund eligibility for companies in our sector to 15 years, this age limit remains unrealistic. It will penalise Australian scientists and clinicians who are working to address some of our nation’s greatest areas of unmet medical and health need.
“Therapies for complex diseases can take well in excess of 15 years to research and develop due to the intensive nature of R&D and clinical trials required. When these companies stay in Australia, they can invest in advanced manufacturing to support their late-stage trials.
“Australia has long wanted these late-stage clinical trials and advanced manufacturing to happen onshore. For companies now doing this, the new 15-year limit will impact a number of mid-clinical trials at their most capital intense stage.
"If the legislation is passed in its current form, the new 15-year time limit risks encouraging early-stage research in Australia while pushing more later-stage R&D including clinical trials and associated manufacturing activities offshore. The cumulative impact could be long-lasting damage to our growing medical innovation and clinical trials industry.
"Globally, major markets are actively working to bring biotech capability, clinical trials and advanced manufacturing onshore. Australia cannot risk changes that will remove a long-standing pillar of our market attractiveness at a point when other markets are enhancing theirs.”
Magellan Stem Cells
Melbourne based biotech Magellan Stem Cells is researching and developing a new treatment for osteoarthritis, a condition that affects more than 2 million Australians, causing pain and restricting movement.
CEO Dr Julien Freitag said the 15-year age limit will impact the company’s ability to retain its cutting-edge R&D, clinical trials and advanced manufacturing in Australia.
“Magellan Stem Cells is 17 years young. Some 1000 Australians have already participated in our clinical trials; we have invested in advanced manufacturing at our Melbourne facility and will soon embark on a pivotal Phase 3 trial of our proprietary stem cell therapy,” Dr Freitag said.
“We are a proudly Australian innovative company and have worked hard to keep our R&D and manufacturing onshore. As a practicing clinician, I see the pain that osteoarthritis causes my patients every day. Our work has always been built on a foundation of wanting to deliver for those Australians.
“Our R&D, clinical trials and advanced manufacturing rollout and timeline is reflective of the true development timelines required for innovative therapies like ours.
"We are now at the point of greatest capital investment and greatest potential patient and economic impact. It is bewildering why a company like ours would suddenly be excluded from R&D tax incentive refund eligibility.”
Ms Cassidy said that if an age limit is retained, eligibility must at the very least be retained past that point for companies like Magellan Stem Cells who are undertaking important clinical trials in Australia. AusBiotech has already provided this targeted solution to Government.
“We will continue to work constructively across the Parliament to ensure we get these final policy settings right,” Ms Cassidy said.
ENDS
Media: William Sparling [email protected] 0416 628 276
About AusBiotech
AusBiotech is Australia's leading national and global advocate for life sciences, working to help its more than 3500 members thrive by shaping policy, creating connections, and fostering knowledge sharing. With an unrivalled national convening power, AusBiotech supports its members’ growth by building an Australian life sciences ecosystem that leads in development and commercialisation, creating high-quality, innovative life sciences companies.