Treasurer Scott Morrison has delivered a federal budget described as good for science, with investments in genomics, medical research, digital health and critical IT infrastructure placing technology at the centre of Australia’s economic ambitions.

Biomedtech innovators were also exempted from changes to the R&D tax incentive, in news that came as a relief to industry groups.

But critics are concerned that funds have been put towards generating the advances of the future and supercharging industry rather than addressing immediate healthcare needs.

In his budget address last night, the Treasurer announced a new “21st century medical industry plan” to propel a sector that represents seven per cent of the economy and 14 per cent of jobs.

“Our plan will provide more support for medical research projects, new diagnostic tools, clinical trials of new drugs, scientific collaboration, and development of new medical technologies that can be sold overseas,” Morrison said.

“In particular we will back in Australian medical scientists through the largest single investment of the Medical Research Future Fund to date of $500 million over ten years for Australia to become a world leader in genomic research.

“This is about building another strong and competitive industry in Australia that will generate income and jobs, from the white coats in the labs to the workers making new medical devices on the shop floor.”

Within the budget, the 12-year National Research Infrastructure Investment Plan will contribute $1.9 billion to critical national research infrastructure, including $140 million for upgrades to the two most powerful computing facilities in the Southern Hemisphere, the Pawsey Supercomputing Centre in Perth and the National Computational Infrastructure facility at the Australian National University.

“Australia’s national supercomputers give scientists across government, industry and universities the processing power for the complex scientific computations needed in an advance society including accurate weather forecasts, drug development, and large-scale astronomy,” President of the Australian Academy of Science Professor Andrew Holmes said.

The government will also invest $1.3 billion over 10 years in a new National Health and Medical Industry Growth Plan to deliver long-term health and economic benefits, and establish Australia as a global centre for medical research and innovation.

Investments from the Medical Research Future Fund will include $500 million into the Genomics Health Futures Mission to develop the use of precision medicine.

A further $240 million has been committed to the Frontier Health and Medical Research program, $248 million will go towards clinical trial programs, and $94.3 million is earmarked for biomedtech programs and industry research collaborations.

The Australian Institute of Health and Welfare will receive $30 million over four years for ICT upgrades and data sharing capabilities to improve access to health information and statistics via My Health Record.

The Australian Medical Research Advisory Board will be provided with $20 million to develop strategies to boost health and medical research and innovation, and the Department of Health has been handed $2.8 million for administrative costs to support the work.

The budget also includes $4.5 million for new measures to encourage girls and women to take up STEM education and careers, and a $29.9 million research initiative to strengthen Australia’s artificial intelligence and machine learning capability.

An additional $5 million over two years will go towards the development of the previously announced national digital baby book, a project led by the National Children’s Digital Health Collaborative and designed to provide newborn Australians with a lifelong electronic health record.

A further $28.2 million was dedicated to a a national paperless eprescription system, which is scheduled to begin from 10 October 2019.

Meanwhile, the federal government will spend another $106.8 million on replacing its 30-year-old Medicare payments system.

“This is a good budget for science,” Holmes said.

[Read more: Plans for R&D tax overhaul in the federal budget could damage MTP sector, AusBiotech warns | eHealth NSW looks to expand its children’s electronic rec ord nationally as experts workshop digital health projects for Australian kids]

CEO of AusBiotech Glenn Cross expressed relief at the Federal Government’s decision to exempt clinical trials from the “much-feared” annual refundable amount in the R&DTI program.

“By exempting clinical trials from a $4 million cap and encouraging higher intensity in R&D, Australia will keep its hard-won momentum in clinical trials and continue its growth in commercialising medical research,” Cross said.

Since the program began Australia has seen a five per cent annual growth in clinical trials.

“We are pleased that the Government understands the role the R&DTI plays in the development of medical technology, biotechnology and pharmaceuticals, with the sector one of Australia’s strongest and most competitive opportunities for growth.”

“AusBiotech notes that the anticipated lifetime cap for companies claiming the refundable component did not eventuate and this too is a welcome development.”

For companies claiming the non-refundable offset, a graduating premium will be introduced to incentivise higher R&D intensity, and the $100 million cap will be elevated to $150 million.

The Medical Technology Association of Australia welcomed the government’s decision to exclude expenditure on clinical trials in its R&D Tax Incentive reform, and the additional $6 billion for Australia's health and medical research sector.

"The announcement to carve out clinical trials from R&D expenditure is something the sector has been calling on. We're pleased the government understood the longer timeframes, due to significant scientific and regulatory hurdles to reach market and the higher expenditure on R&D, particularly in later stages with activities like clinical trials,” Chief Executive Officer of the Medical Technology Association of Australia Ian Burgess said.

"[The] Australian clinical trials industry is estimated to be worth $1 billion to the economy with the number involving medical devices having increased from 119 to over 160 in just three years.

"Global advances in medical technology over the past 20 years have resulted in a 56 per cent reduction in hospital stays, 25 per cent decline in disability rates, 16 per cent decline in annual mortality and increased life expectancy of approximately 3.2 years.”

But Associate Professor Danielle Logue from the University of Technology Sydney Business School said that while the almost $200 million contribution into GPS and satellite technology, as well as the $41 million over four years from 2018-19 to grow the Australian space industry and establish a National Space Agency are positive technology developments, the health system won’t receive an immediate bonus.

“The government claims investment of over $2.4 billion for research, science and technology capabilities, but when you unpack this it actually shows a divestment in innovation, science and research through a reduction in the R&D Tax Incentive. When this is coupled with a planned reduction in university funding, this creates a possible $4 billion hole in the Australian innovation system,” Logue said.

“The innovation winners are medical research but this is a narrow focus on medical technologies and not the health system per se, with a further scattering of funds across AI and machine learning.”

The cash injection for better health data in the budget is a building block for much-needed reform of the system, according to Australian Healthcare and Hospitals Association Chief Executive Alison Verhoeven, but she said improved data analytics won’t satisfy the need now to move care away from high-cost hospitals when possible or increase their funding.

“To make things better we have to have an accurate picture of what is going on now – and we can get this through better healthcare data,” Verhoeven said.

‘While the news on data is good, it’s disappointing that there have been no major announcements boosting the capacity of public hospitals to cater for what is now overwhelming demand, nor to better coordinate the two-way divide between primary care and hospital care.”

The Victorian Minister for Health Jill Hennessy has lashed out at the Federal Government for short-changing the state’s health system by $2.1 billion and failing to pay an outstanding $104 million debt. She claimed the Commonwealth has funded 0.3 per cent of Victoria’s health infrastructure projects over the past four years.

“Malcolm Turnbull has put big business before Victorian hospitals and patients. Together, Malcolm Turnbull and Tony Abbott have slashed billions of dollars from Victoria’s hospitals,” Hennessy said.

“These savage cuts will see waiting lists blow out – it will hurt patients, our doctors, nurses and health workers. It’s not good enough.”

Meanwhile, the AMA claimed the national digital baby book is a digital health infrastructure investment that will improve patient care for kids.

“[In] terms of the safety advantages that electronic health records bring, we have a fragmented health system and the idea that someone at the start of their life might have every single health intervention, whether it be a vaccination, an x-ray, or as we age, things like protheses, et cetera, allergies, serious allergies like anaphylaxis, all recorded in a document which can be visualised wherever you're being looked after, in a public hospital, in a private hospital, that's good news,” AMA President Dr Michael Gannon said on SKY News today.

“This is being done in other parts of the world; this is another way of adding to the electronic health record, which is the future for the Australian healthcare system.”

But digital health advances – including the Federal Government’s My Health Record – are an increasing burden for radiologists, with the Royal Australian and New Zealand College of Radiologists voicing disappointment that changes to rebates for radiology and radiation oncology were overlooked when they currently don’t cover the costs of treatment.

“Another budget has now gone past with no change to radiology rebates. After 20 years of frozen rebates it is no surprise to see patients paying higher out of pocket costs than ever before,” RANZCR President Dr Lance Lawler said.

“We have also raised with the Government increasing costs for radiology practices that will arise in the increased use of digital health technologies such as the My Health Record. The high rates of bulk billing quoted by the Health Minister recently are hiding a dark secret – it is becoming more difficult to access imaging, a core element of diagnosis and treatment.”




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