Federal Small Business Minister Bruce Billson added some shape to some of the unknowns in government’s tech sector industry policy on Friday at a G20 satellite conference on small business issues.
But really, until the Tony Abbott-chaired National Industry Investment and Competitiveness Agenda is announced in the coming weeks, we won’t know what the underpinnings of the local tech startup sector fully looks like.
The fact that Billson addressed issues so closely watched by the technology startup sector is interesting, though. His broad speech included sections crowd-sourced funding, employee share-option schemes and R&D tax treatments.
Few startups would characterise themselves as a small business (although some perhaps should.) But Billson certainly aligns himself with them. And as he is a Cabinet Minister from within Treasury portfolio, it is certainly worth taking the support as it is offered.
Billson was talking up the role of small business in meeting the G20 target of accelerating collective growth by more than two per cent in the next five years – as agreed by the G20 Finance Minister meeting last February.
Speaking at the G20 Agenda for Growth – Opportunities for Small and Medium-Sized Enterprises conference in Melbourne Friday he outlined some of the key preconditions for a healthy SME sector. Things like building infrastructure, enhancing competition, facilitating trade, strong and vibrant R&D – all the usual suspects.
And the SME story lends itself to the Howard-era Coalition narrative that Tony Abbott has re-embraced (which explains the Small Business Minister sitting in Cabinet.)
The trouble with Bruce Billson claiming ownership of startups in even a small way is that it demonstrate that the Australian tech sector is an industry without a portfolio. We are everywhere and nowhere all at once with this government.
I must say I preferred the old Coalition model – under Howard – where the IT sector’s industry development responsibility lay with Communications. In this model, because the tech sector was recognised as a horizontal industry critical to the productivity and efficiency well-being of all industries, it was given a special status – removed from the Industry department and given a higher priority within Communications.
Anyway, Billson is taking an interest and told Business Spectator on Friday that he sees his role as cross-portfolio – to bring together the various policies of Industry, Trade, Communications and others to ensure small business – including tech startups don’t fall through the cracks.
Unfortunately it does not work like that. The industry department’s Entrepreneurs Infrastructure Program (which in theory replaced Commercialisation Australia and the Innovation Investment Fund) is so washed out and so non-specific that it is unlikely to be much help to fledgling Australian tech firms. It doesn’t really make a lot of difference that a small business minister is spruiking it – a generic cookie cutter program is not enough.
More interesting was what Billson talked about in relation to Treasury responsibilities. And this included a range of changes to the tax system to make it life easier for small business. This is practical and helpful.
But he also restated Government’s review of crowd-sourced funding, employee share schemes, and R&D tax concessions – and painted a positive outlook for each.
On crowd-sourced funding, he said “while it is not yet used for funding small businesses in Australia, peer-to-peer lending is a promising source of debt finance and the Government is exploring the regulatory changes that may be required to accommodate it.”
On employee share schemes: “The Australian tax system currently imposes taxes on discounts on interests granted under an employee share scheme in the year of issue and many have reasonably argued that these tax arrangements are a disincentive for many start-ups to set up an employee share scheme and are inconsistent and out-of-step with global practice.”
And on R&D tax concessions he told Business Spectator that Government was looking to develop a better targeted program – and to tighten eligibility requires – so that it had maximum beneficial effect.
These issues will be announced in the coming weeks as part of the National Industry Investment and Competitiveness Agenda, being put together by a taskforce chaired by Tony Abbott, and which includes the Treasurer Joe Hockey, the Industry Minister Ian Macfarlane, and the Minister for Trade and Investment Andrew Robb.
None of these men, it has to be said, has ever taken much interest in the indigenous – the local – tech sector.
Providing advice to the Taskforce is the Prime Minister’s Business Advisory Council, chaired by Maurice Newman – who has had a lot to say about ‘corporate welfare’ in relation to industry development programs, and R&D tax
Newman’s input will be interesting. The tech industry shouldn’t expect to be showered in largesse when the National Industry Investment and Competitiveness Agenda is announced. But Newman has publicly recognised the need for Government involvement in kickstarting local venture capital.
So we all watch with interest.
This article also appeared on the BusinessSpectator website.