Parliament should unite to remove innovation barriers: Clare

Communications shadow minister backs startup share options, crowdfunding and copyright reform

The government and opposition can agree to fix issues holding back Australian startups and innovation, according to Communications Shadow Minister Jason Clare.

At the CommsDay conference today in Sydney, Clare backed regulatory changes supported by the Coalition that would encourage crowdfunding and tax changes to make it easier for startups to use share options as a hiring incentive.

“We can work together on both of these things, [with] government and opposition in the Parliament passing laws that reform equity funding and reform employee share schemes.”

In addition, Clare urged the government to consider copyright reform and initiatives that would promote ICT skills.

Clare said he agreed with Communications Minister Malcolm Turnbull that the share options tax scheme must be modified.

The current tax rules, introduced by Labor government in July 2009, discourage Australian startups from providing share options to employees. The rules require that the employee is taxed on the value of the share option when it is issued, before any payments are made.

In other countries, the employee is not taxed until they execute the option. This is said to be better for cash-poor early stage startups, which can use share options as an alternative to a larger salary.

“I think there is a strong argument for reform here, particularly for startup businesses,” said Clare.

Clare also supported Turnbull on creating a regulatory environment that supports crowdsourced equity funding for startups.

He said while startups have little difficulty getting seed funding, they struggle to get the next tranche of capital to drive their business forward. “Crowdfunding will help with this.”

While the parties may already agree on those issues, Clare said Turnbull has been silent on the issue of copyright reform.

Clare supported a recommendation by the Australian Law Reform Commission (ALRC) for a flexible fair-use exemption like the one that exists in the United States. There, the exemption has helped to develop cloud computing and search engines, he said.

“Others have made the point in Australia that cloud computing services potentially breach the current copyright laws because they’re often used to store or share copyrighted material.”

He gave the example of Shazam, an app that uses a smartphone’s microphone to recognise songs being played. “[It] probably leads to people buying more music, but according to the Australian Digital Alliance, it also potentially breaches our current copyright laws.”

Read more: State government backs Startup Victoria with $100k

Clare said he wanted to see broader copyright reform than the measures proposed by Attorney-General George Brandis.

“I suspect that Minister Turnbull might have a different view, given his desire to remove obstacles from innovation, but he’s been silent on this in the past.”

A more difficult policy issue to address in Australia is how to encourage the development of ICT skills, said Clare.

“The most valuable assets in this country aren’t in the ground,” he said. “They’re between our ears, and we’re not fully exploiting them at the moment.”

Clare said that while 75 per cent of the fastest growing occupations in Australia require STEM skills, the number of students taking STEM courses is not keeping up with demand and has in fact dropped 36 per cent in the last decade.

In the last 10 years, the private sector has created 100,000 new jobs requiring STEM skills, but only 49,500 students have graduated with technology degrees, he added, citing figures released by the Australian Computer Society.

“If we’re going to succeed here, we have to change the way we teach our kids about technology, starting in kindergarten.”

However, a new technology curriculum has been held up by Education Minister Christopher Pyne, despite winning the support of all the states and territories, said Clare.

The curriculum would introduce computational thinking earlier into the classroom. “It needs to be implemented sooner rather than later.”

Clare also spoke about the NBN at the conference, urging the government to block TPG from going forward with deployment of fibre to the basement.

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of dystopian sci-fi novels We, The Watched and Divided We Fall. Follow him on Twitter: @WatchAdam

Follow Computerworld Australia on Twitter: @ComputerworldAU, or take part in the Computerworld conversation on LinkedIn: Computerworld Australia

Read more: Budget 2014 - Budget kills 'vital lifeline' for tech startups: StartupAus

Tags ICT skillsinnovationshare optionsstartupscopyright reformcrowdfundingParliamentpoliticsJason Clare

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