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Biotech tax cut and trachoma feature in Federal Budget

A tax cut for medical and biotech companies generating income from new patents developed in Australia, a further expansion of a traineeship wage subsidy and $19.1 million towards trachoma elimination are the main 2021-22 Federal Budget announcements affecting the ophthalmic sector.

Treasurer Josh Frydenberg’s big spending budget, unveiled on Tuesday 11 May, committed major investment towards aged care ($17.7 billion) and mental health ($2.3 billion), but also delivered a further boost to Australian businesses and Indigenous health.

Josh Frydenberg.

Among the main business tax incentives was a one-year extension to the temporary “full expensing” scheme, which now allows businesses with a turnover or income of less than $5 billion to immediately write-off the cost of assets they first use or install by June 30, 2023. Many optometry and ophthalmology practices have already capitalised on this scheme for big ticket equipment purchases in the past 12 months.

“Over 99% of businesses, employing over 11 million workers, can write off the full value of any eligible asset they purchase,” Frydenberg said.

“This has seen their spending on machinery and equipment increase at the fastest rate in nearly seven years.”

Also, the government unveiled a ‘patent box’ regime, meaning that income earned from new patents that have been developed in Australia will be taxed at a concessional 17% tax rate – almost half the rate that applies to large companies.

Certificate IV optical dispensing trainers have experienced a massive uptick in enrolments with a traineeship wage subsidy scheme that has now been extended for a second time.

It will apply to the medical and biotech sectors, and is likely to be available to companies developing novel ophthalmic therapies.

Frydenberg said Australia’s effective COVID-19 management has made it an even more attractive place for some of the world’s brightest minds.

“To take advantage of this, we are [also] streamlining visas to target highly skilled individuals when circumstances allow,” he said.

Trainee wage subsidy – optical dispensing 

The government is also spending an additional $2.7 billion to extend the Boosting Apprenticeship Commencements (BAC) program.

The scheme – which involves a 50% wage subsidy of up to $28,000 for new or existing employees enrolled into appropriate courses – has triggered hundreds of enrolments into Certificate IV in Optical Dispensing courses in Australia and is expected to have a transformational impact on the sector.

Overall, the demand-driven program is expected to support more than 170,000 new apprentices and trainees for newly commencing students signed up by 31 March 2022. The subsidy will be capped at $7,000 per quarter per apprentice or trainee.

Indigenous eye health

The Federal Government has set aside $121.4 billion for health in 2021-22, with $503 billion to be invested over the next four years.

In a joint statement, Federal Health Minister Greg Hunt unveiled $19.1 million to continue to improve Australia’s trachoma elimination program, supporting the elimination of the blindness-causing infection in 2022. This comes after Australia failed to meet its 2020 elimination target.

Australia is the only developed nation in the world to still have endemic trachoma.

This money will also contribute towards 30 workplace training packages allocated to Aboriginal Community Controlled Heath Organisations – out of 90 places worth $9.6 million – through the Allied Health Rural Generalist Pathway.

In total, $781.1 million will be spent to prioritise Aboriginal and Torres Strait Islander health and ageing outcomes.

Public hospitals and PBS 

Public hospitals will continue to receive much needed investment, with $135.4 billion over five years, including funding under the 2020–25 National Health Reform Agreement (NHRA) and the National Partnership on COVID-19. This is up from $13.3 billion in 2012-13 to $25.6 billion in 2021-22 and $29.9 billion in 2024-25.

Although there was no specific mention of increasing public cataract surgery capacity – which Vision 2020 Australia strongly advocated for – it’s hoped this funding will trickle down.

For the Pharmaceutical Benefits Scheme, $43 billion will be spent over four years to make medicines more available and affordable.

Aid cuts fail Australia’s neighbours

According to The Fred Hollows Foundation, official development assistance (ODA) expenditure has fallen from $4.48 billion in 2020-21 to $4.34 billion in 2021-22.

Australia will now spend 21 cents for every $100 of national income on foreign aid. This is down from 33 cents in 2011 and by 2024-25 will fall to 19 cents.

Ian Wishart.

CEO Mr Ian Wishart said last year the government showed flexibility in enabling The Fred Hollows Foundation and other development organisations to pivot resources to supporting the global pandemic.

“The government has supported the sector’s calls to ‘End Covid for All’, with increased funding and vaccine support for our neighbours like Papua New Guinea (PNG). It’s also encouraging to see the two-year support package of $37.1 million to India,” he said.

“But I would have hoped that Australia’s time of crisis would make us more sympathetic to the needs of others overseas, some of them our closest neighbours, beyond just the pandemic.

“Weak health systems anywhere in the world are a threat to all of us. Unless we protect the health of others overseas, Australia can’t be assured of our own health security.”

In its pre-budget submission, Vision 2020 Australia called on the government to spend $26.2 million over four years to tackle some of the highest blindness rates in the world in PNG through a targeted program of workforce, infrastructure, and outreach services. However, there was no specific mention of funding for PNG eyecare programs in the budget.

More reading

Major boost for optical practices with expansion of wage subsidy program

Sector lays out $280 million public cataract surgery plan

‘Largest ever’ business incentives unveiled in Federal Budget

 

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