Budget 2015: StartupAUS sees missed opportunities in budget
- 13 May, 2015 14:00
StartupAUS has welcomed government moves in the budget to support small business but says it has failed to address many of the key issues facing tech-focussed startups in Australia.
The government introduced a range of tax cuts for small businesses and also included $7.8 million over four years for the Australian Securities and Investments Commission to implement a crowd-sourced equity funding (CSEF) regulatory framework.
The government is also increasing the depreciation threshold for individual assets from $1000 to $20,000 for small businesses, allowing them to immediately claim a tax deduction on business expenses, and is changing the rules for Fringe Benefits Tax in relation to portable electronic devices.
In addition, the government said it would make a number of changes to ease small businesses' regulatory burden, including allowing startups to immediately claim deduct professional expenses.
The government had already announced measures to change the tax treatment of Employee Share Schemes.
StartupAUS said the government had continued to conflate startups and small businesses. A report released by the organisation last month criticised the government's Industry Innovation and Competitiveness Agenda (IICA), which was released in October, for "assuming that startups ... have the same needs as small businesses"
"Policymakers need to understand that tech startups have different needs from small businesses," the <i>Crossroads 2015</i> report argued.
The Crossroads report defined a tech startup as "as an emerging high-growth company that is using technology and innovation to tackle a large and most often global market".
The government has failed to commit to a national innovation strategy and the budget made no investment in improving the funding climate for Australian startups, the organisation said today.
In addition there is a lack of investment in STEM education and in 'soft infrastructure' to support the startup ecosystem, StartupAUS said.
"Many countries have invested in the establishment of national networks of entrepreneurship centres and incubators as a means of support growing clusters of tech startups," a statement issued today by the organisation said.
"Australia has a number of high quality incubators, but still lacks a national framework for the support and growth of this vital piece of soft infrastructure."
"Australia urgently needs to develop a strategy for an 'Economy 2.0' that can sustain our way of life beyond the resources boom," an author of the Crossroads report, Colin Kinner, said.
"There is little in this budget to suggest that the government has grasped the importance of investing in the tech sector, despite evidence from around the world that high-growth tech startups are a massive driver of economic growth.
"The level of government support for tech startup eco-systems is increasing in just about about every developed economy in the world. The Australian government needs to act to ensure it is keeping pace and actively supporting knowledge-intensive industries and tech startups."
The Australian Computer Society said it welcomed the small business tax cuts, changes crowd-sourced equity rules and tax concessions for employee share schemes, as well as the focus on improving vocational training.
“However whilst these initiatives are encouraging and a move in the right direction, much more needs to be done," ACS CEO Andrew Johnson said. There needs to be more emphasis on STEM education, the CEO said.
"The ACS maintains that more needs to be done to build on some of the important initiatives in this budget. We need to work collaboratively as a nation to shape a workforce that has the skills, competencies and attributes needed to prosper and create jobs in a digitally connected, fast moving world."