2.1.2 Government Support, Investment
and Research and Development
During the last decade, the life sciences industry in Queensland
has been fuelled by significant support and investment from
both the Queensland State Government and the Australian
The Australian Government is providing businesses with the right
conditions for growth and investment through greater labour
market flexibility, trade liberalisation, industry deregulation,
reductions in tariff barriers and the development of a better tax
In the 2017-2018 Budget, the Australian Government invested
heavily in research and experimental development (R&D),
providing AU$10.3 billion, the highest ever Budget Estimate of
total Australian Government investment in R&D.
Funding of AU$642.9 million will be made available in 2020–21,
bringing total investment in health and medical research over the
first five years of the MRFF to AU$1.4 billion. This is in addition
to Australian Government’s funding of around AU$900 million
per year for the National Health and Medical Research Council.
In order to drive innovation the Australian Government is
providing almost AU$3 billion of assistance to Australian
companies to invest in new products, services and processes,
to keep them competitive in the global marketplace.
In December 2017, Queensland had a change of State
Government. The incoming Government released its plan
to further grow the Advance Queensland initiative, to help
"reinvigorate the state's research sector and provide the
foundations for developing new industries in the future". The
framework, which supports the role of innovation in economic
development, was established for the ongoing development of
sustainable, worthwhile jobs for current and future generations.
Of course, it is not simply the Government and global companies
investing in Australian R&D. In FY2016, the life sciences and
healthcare sector received AU$590 million of VC investment,
and accounted for 13 per cent of all venture capital amounts
invested. This equates to 32 per cent of the VC investments
2.1.3 Research and Development Tax
The Research and Development (R&D) Tax Incentive was
introduced with the aim to boost competitiveness and improve
productivity across the Australian economy, encourage industry
to conduct R&D activities, provide business with simple and
predictable support and improve the incentive for smaller
entities to engage in R&D.
The R&D Tax Incentive provides refundable or non-refundable
tax offsets for eligible R&D activities and applies to expenditure
incurred and the use of depreciating assets in an income year.
A 43.5 per cent refundable tax offset is available to eligible
small companies with an annual aggregate turnover of less than
AU$20 million, provided they are not controlled by income tax
exempt entities. These companies can receive a refundable tax
offset of 43.5 per cent of their R&D spending as part of the
processing of their income tax return.
A 38.5 per cent non-refundable tax offset is available to all other
eligible entities. Unused offset amounts may be carried forward
for use in future income years.
Several Members of LSQ are able to provide assistance in
relation to the R&D Tax Incentive and can be located using this
Figure 2: % of estimated global growth (2017-2019) in real GDP.*
Source: Based on 2016 GDP estimates from IMF, and 2017-2019 growth projections from World Bank
Section 2: Overview – Queensland, Australia
Life Sciences Queensland Limited – www.lsq.com.au 19