Startup backers largely positive on Labor’s Budget

Brandon How

The Albanese government’s first Budget was positively received by a cross section of stakeholders in the startup community despite a lack of detail on the $15 billion National Reconstruction Fund at this stage.

Thoughts on the budget ranged from an appreciation that several Coalition commercialisation programs have remained intact to support for the redirecting of uncommitted funds from the Modern Manufacturing Initiative.

Just under $45 million has been committed across the Department of Industry, Science, and Resources, and the Department of Finance out to 2023-24 to establish the National Reconstruction Fund (NRF). Industry and Science Minister Ed Husic told that he remains committed to having the fund set up and operational by July 2023.

Curtin University’s director for commercialisation Rohan McDougall acknowledged that there is a need to “take the time to get [the National Reconstruction Fund] right” given its scale. Further, he was encouraged that the Albanese government “haven’t disturbed some of the [commercialisation] programs that were already running”.

He highlighted the University Trailblazer and Australia’s Economic Accelerator as key commercialisation initiatives started by the former Coalition government that have been continued. Curtin University was selected as the resources tech and minerals commercialisation hub under the Trailblazer program earlier this year.

“At first read it’s great that the incoming government has recognised the importance of this area as something to support and have continued with some of the programs because it’s a very long-term game. Commercialisation takes many years, and if you spend years in review and change… government support programs, it can lead to significant delays in the whole process,” Mr McDougall said.

Although the Albanese government has cut short-term critical minerals support grants, Mr McDougall said he was not concerned, given $1 billion of the NRF has been earmarked for a value-adding in resources fund.

“I think the support is the important thing — whether it’s in one pot or another, we don’t mind. But there’s a commitment it seems from this government, and continuing again from the previous government, that critical minerals is a significant potential economic imperative for this country and could really underpin our economic future for the next 50 years if we get it right,” he said.

With regards to the $14.6 million Startup Year program, which will allow up to 2,000 university students and recent graduates to participate in accelerator programs at universities, Mr McDougall argued that this should be complimented by other programs that help students “develop ideas for quality business propositions that are tested against the market and against industry problems… before they spend a year working on the solution”.

Cicada Innovations chief executive Sally-Ann Williams said the government’s focus on decarbonisation alongside its ambitious energy transition goals would foster the growth of SMEs as well as “in translational research driving new innovations to market”.

She also called for more details on the National Reconstruction Fund.

“If this is focused on scaling existing SMEs, it’s a strong signal that we are investing in capacity building of industry leaders for the future. We should also ensure that this funding solves the multiple funding ‘valleys of death’ encountered specifically by deep tech SMEs,” Ms Williams said.

“Investing in manufacturing technologies is critical to national supply chain resilience, but we need to be strategic and smart. Instead of duplicating capabilities in every state, we should be building out manufacturing capabilities that can be a core resource for many companies to use.”

The chief operating officer of Quantum Brilliance, a quantum computing spinout from the Australian National University, Mark Luo also said he was supportive of the government taking “a considered mentality” to the National Reconstruction Fund. “From my perspective, rather than rushing through it, taking a very well-considered approach is important,” Mr Luo said.

He also noted that “it’s important not to over segment and over engineer [the NRF] to ensure that we can build a truly sovereign supply chain”. For example, he describes quantum computing and quantum technologies as enabling technologies, which would benefit all sectors eligible for the $1 billion critical technologies sub-fund.

Mr Luo also supported the redirection of $303.7 million away from the former government’s Modern Manufacturing Initiative and Strategy because he believes supply chain resilience is “more than just building Australian manufacturing capability”.

“It’s actually about where can Australia play in the critical supply chain globally…because you could manufacture anything, but it could be a low margin product that has no sovereign supply chain relevance at all,” he said.

Jessica Olivier, the director of R&D tax and government incentives at national professional services firm RSM Australia, welcomed the continuity of the R&D tax incentive but was disappointed by the absence of the patent box scheme.

“Unfortunately, there was no mention of patent box either. This was introduced by the previous government budget in 2021 and leaves biotechs, agribusiness and potentially cleantech companies, who were getting excited by it, with uncertainty as to how it will proceed – if it proceeds at all.”

Do you know more? Contact James Riley via Email.

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