Innovation to be a key driver for Government into the New Year

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Earlier this week the Turnbull Government released their Innovation Statement, which sets out the Governments plan support the growth of innovation in Australia.

What are the key changes?

Some of the key proposals of the Government’s Innovation Statement are:

  1. Research and science: Nearly half of the proposed spending will fund research and science infrastructure. It is anticipated that $459 million of funding will be provided over four years, with most funding kicking in from 2017.
  2. Tax offset for investors: Investors in start ups will be able to get a non-refundable 20% tax offset, and a capital gains tax exemption. An offset model was chosen over a deduction to more evenly distribute the benefit across income groups.
  3. Tax breaks for start ups: Established start ups will receive a 10% tax rebate for venture capital investments to expand their business.
  4. Insolvency and bankruptcy: The default bankruptcy period will be reduced from three years to one year. A new ‘predominantly similar business test’ will replace the existing ‘same business test’ to allow businesses to access past losses.
  5. University funding incentives: It is proposed that the Government will allocate $127 million over four years of funding to encourage greater collaboration between industry and universities and promote a greater transfer of intellectual property from universities to start ups.
  6. Visa changes: A new entrepreneur’s visa will be created created to bring in international talent and retain high achieving foreign students after they have graduated.
  7. Global innovation strategy: The Government will establish ‘landing pads’ to allow Australian entrepreneurs to more easily travel to Silicon Valley, Tel Aviv and other innovation hubs.
  8. Cyber Security Growth Centre: A new “Cyber Security Growth Centre” will be established to facilitate improved engagement between research and business, as well as improve access to global supply chains and international markets.
  9. A new Government body: The Government will create a new body called Innovation and Science Australia to advise the Government on science and technology.
  10. A new ‘Innovation Fund’: The Government will provide $200 million to the CSIRO to establish an Innovation Fund for commercialising research.

When will the changes come into effect?

While the changes are, in principal, supported by both parties, the Government will have to table draft legislation and ensure its passage through Parliament. The result is that it may be many months before any of these changes take effect.

What does it mean for me?

Despite the effect of these announcements being months away, it is nevertheless a step in the right direction for Australia’s innovation and entrepreneurial sector. If you are an innovator or entrepreneur, or intend to invest in innovative or entrepreneurial ventures, these latest announced changes together with the proposed crowdsourced funding changes (see here) will mean better access to funding, less red tape and more opportunity both within Australia and abroad.

Please note that this article is not to be considered as legal advice – it is provided as general information. If you require any assistance regarding your business or proposed start up, please contact us.