The federal government has unveiled its ‘National Innovation and Science Agenda’ with a range of investments in the Australian research sector and reforms designed to boost startups.
Initiatives covered by the agenda total $1.1 billion, the government said.
The government said it wants to boost research commercialisation and increase Australian startups’ access to venture capital.
The package includes a range of changes to promote the startup sector, including a 20 per cent tax offset on investments for early stage businesses and a 10-year exemption on capital gains tax (as long as investments are held for three years).
To boost early stage investment, partners in early stage venture capital limited partnerships will receive a 10 per cent non-refundable tax offset on capital invested during the year.
The maximum fund size for new ESVCLPs will be boosted from $100 million to $200 million and they will no longer be required to divest a company when its value exceeds $250 million.
Rules governing whether businesses can claim losses will be changed. The ‘same business test’ will be changed to a ‘predominantly similar business test’ to allow companies to tweak their business models.
Other changes will bring the tax treatment of intellectual property and other intangible assets in line with tangible assets.
An $8 million incubator support program will back new and existing incubators and accelerators.
The government said it would make changes to insolvency laws, including cutting the default bankruptcy period from three years to one, introducing a ‘safe harbour’ for directors, and making unenforceable clauses that allow contracts to be terminated if a company is undertaking a restructure.
The government said it would issue a paper on the proposed changes in the first half of next year.
"We understand that sometimes entrepreneurs will fail several times before they succeed – and will usually learn more from failure than from success," treasurer Scott Morrison said.
Changes to employee share schemes will limit the requirement for disclosure documents to be made public. The government also said it would consult on ways to make ESS more ‘user friendly’. The proposals follow on from the government’s changes to the tax treatment of employee share schemes.
The government will spend $36 million over five years on a ‘Global Innovation Strategy’ to boost international collaboration, including $11 million for five ‘landing pads’ (in Silicon Valley, Tel Aviv and three other yet to be announced locations) to “support entrepreneurial Australians”, $22 million to boost Australian research collaboration with international research-industry clusters, and $3 million on reducing barriers to regional collaboration.
The government said the landing pads will offer advice, facilities and contacts to Australian entrepreneurs operating in international startup hotspots.
The government is also moving to change the rules governing crowd-sourced equity funding.
The agenda includes moves to encourage research collaboration between universities and the private sector by introducing new block grant funding arrangements, as well as investments in research infrastructure.
The government well spend a quarter of a billion dollars on a new organisation to help commercialise biomedical discoveries. The organisation administering the ‘Biomedical Translation Fund’ will be established in 2016.
Funding will come by cutting capital contributions to the Medical Research Future Fund by $125 million in each of 2015–16 and 2016–17, the government said. The MRFF will still be fully capitalised by 2019–20.
A $200 million CSIRO Innovation Fund will support spin-off and startup companies. The government will contribute $70 million in new funding. Other funding will come from royalties from the CSIRO’s wireless networking patents and the private sector.
The agenda also includes a $20 million expansion of the organisation’s accelerator program.
The government will invest $75 million the CSIRO’s Data61 (which was born out of the fusion of NICTA and the CSIRO’s digital productivity team).
The Coalition government previously drew criticism for slashing CSIRO funding by $111.4 million in the 2014 budget.
The government will earmark $2.3 billion over the next decade for three research infrastructure initiatives.
Funding includes $294 million for the international Square Kilometre Array (SKA) radio telescope and $520 million for the Australian Synchrotron. The funding packages for the two projects will commence in 2016–17.
The government said it would also spend $1.5 billion on National Collaborative Research Infrastructure Strategy (NCRIS).
Earlier this year the future of the NCRIS was in doubt as the government linked funding for the project to its unsuccessful changes to higher education.
The government said it will invest $26 million over
half a decade in quantum computing research at the University of New South
Wales' Centre for Quantum Computation and Communications Technology. Funding
will commence in 2016-17
The government will also spend $30 million on establishing an industry-led ‘Cyber Security Growth Centre’. The centre will be operational by mid-2016.
“The Growth Centre will bring together industry, researchers and governments to develop a national cyber security strategy and coordinate research to reduce overlap and maximise impact,” a statement issued by Turnbull’s office said.
“This will help all Australians and businesses be safer and more secure online.”
It will be the first initiative under the Cyber Security Strategy, which the government said will now be released in 2016.
The government said it would invest $99 million in programs to boost digital literacy and STEM skills among young Australians, and $13 million on increasing
“The agenda will also commit, $13 million to increasing opportunities for women in research, STEM industries, startups and entrepreneurial firms,” industry, innovation and science minister Christopher Pyne said.
“Successful grassroots initiatives like National Science Week will also continue to involve communities around Australia in the wonder and excitement of scientific discovery.”
Full details of the innovation agenda are available from Innovation.gov.au.