Australia needs a ‘smart restart’ to drive economic growth and jobs creation in the post-COVID-19 period with a focus on the tech and startup sectors, according to Labor MP Ed Husic.
Mr Husic, a long-time advocate for the technology sector and former shadow innovation minister, is re-entering the policy debate from the backbench, pushing for a series of immediate changes to re-energise the tech startup sector.
These policies include a doubling of the Accelerating Commercialisation program, early research and development tax incentive payments and a government-backed seed investment program, along with a longer-term National Entrepreneurship Pathway focusing on new companies and jobs.
With discussion in Australia now turning towards “snapping back” the economy and reopening the private sector, Mr Husic said this is an opportunity to do things differently and better, and the tech sector should play a primary role in this.
“Attacking friction points, reducing frustration – if any group can be mobilised and come up with ideas to deal with this is Australia’s tech community, large and small. To tackle those problems and also help inject new life into the economy, what we need now is a Smart Restart,” Mr Husic said.
“Out of this crisis comes the chance to do things differently. There is no better time to get started. Let’s get on with it.”
With Australia now in recession and still fighting a pandemic, the tech sector is ideally placed to assist in rebuilding the economy, and a number of changes need to be made to “mobilise and engage” the industry in the recovery effort as part of a “smart restart”, Mr Husic said.
The short-term policy changes should focus on addressing current capital and skills shortages, he said.
The $60 million Accelerating Commercialisation program should be given a one-off boost of a further $60 million in funding to focus specifically on ideas to improve life in a post-COVID environment, Mr Husic said.
He also said the government should establish a seed capital investment program with Commonwealth funds. This capital would be distributed through existing accelerator programs as a seed fund, again focusing on startups looking to improve life post-coronavirus.
Mr Husic backed widespread calls in the tech sector for the R&D tax incentive refunds to be paid early, and for the Coalition’s legislative changes to the scheme, amounting to a $1.8 billion cut, to be “paused”.
“There’s enough disruption as it is without having to deal with very contentious changes being put forward. Reform, sure, but at a time when it’s right to do so.”
A looming parliamentary inquiry into the Employee Share Option Program (ESOP) should be scrapped with improvements made immediately, Mr Husic said.
“The ESOP architecture was reviewed by Treasury. The last four-year funding envelope has expired. We don’t need delay. Labor supported the 2015 changes. Sensible reforms should be brought forward now,” he said.
The NISA angel investor tax incentive needs to be improved, with extra transparency and reporting, Mr Husic said.
“We haven’t heard much about how those incentives are going. I have heard that they are complex and difficult to use,” he said.
“Imagine if we provided greater incentive for angel investors who teamed up with accelerators receiving the seed funding support to back in some of those firms. We could combine the two funding streams in a meaningful way.”
On the skills side of the equation, the Labor MP is pushing for greater involvement by vocational education providers, with more fee-free places, engagement with TAFEs and private institutions, more PhD students focusing on AI and expanded ICT apprenticeships within government and industry.
The federal government also needs to better open up procurement to startups, he said.
“Annoyingly, local, capable firms were overlooked for some of the biggest projects designed to help the national fight against COVID. A lot of firms still tell me the government’s digital marketplace fails to deliver,” Mr Husic said.
“There’s no point lecturing Australian business to buy local if government doesn’t do the same.”
Looking more longer term, the government needs to develop a National Entrepreneurship Pathway to “re-energise and see new firms emerge to make our lives easier, our economy stronger”.
Australia needs to tap into the job-creating ability of startups, he said.
“Now it may seem weird to you that a Labor MP would be flying the flag for entrepreneurship – but my view has been new firms, creating new jobs will be vital for the national benefit now and into the future,” Mr Husic said.