Amid the headlines of a 22c per litre tax cut for petrol and short-term cash payments for this, that and the other (… is there an election in the offing?) most startup experts agree that there was precious little in Tuesday’s federal budget for the emerging startup sector.
“Startups call for more government support”, screamed The Australia the day after, along with “Fintech fury, startup confusion over empty budget” from Innovation Australia, even describing the budge for startups as “grim”.
So was anything in it for startups…?
Not specifically, it would appear. There was a bit for small business.
Small businesses did receive an increased tax concession if they invest in “digital skills training and technology”, with every $100 spent earning a $120 tax deduction.
Startups are unlikely to pay corporate tax though, right?
A similar deduction is available for small businesses with annual revenues under $50M (ie most, if not all, startups) for spending on “digital assets”, up to a maximum of $100K spend.
Possibly the most relevant announcement was a touted simplification of the Employee Share Scheme (ESS), but the speech was very short on detail. Reduced disclosures is all, it would seem.
The Patent Box Scheme which applied to biotech and medtech startups has been extended to agtech and low emissions technology, which makes the effective tax rate 17% for eligible patents, rather than 25% to 30% or whatever the company would be paying. The scheme aims to encourage innovators to base their inventions in Australia, and gives them tax incentives to do so.
Perhaps no news is good news, as the R&D Tax Incentive (probably the largest funder of early stage innovative businesses in the country) is not being changed.
There was money for Cyber ($9.9B), $1.3B for space, $500M+ for uni research and $37M for CSIRO. Meanwhile, funding for the Clean Energy Finance Corporation and the Australian Renewable Energy is falling.
On a post on LinkedIn, former R&D expert at RSM and now CEO of Innovate Australia, Stephen Carroll noted:
Nothing to really complain or be excited about as far as I can tell for Australian innovation in the Budget tonight. Looks like a number good grant programs are continuing, no changes to R&D tax (YEAH!!!), and some minor enhancements to Patent Box.
I think this is the “winners” list: small business digital & training support, University Research Commercialisation, Modern Manufacturing, Clean Energy and Critical Minerals.
Stephen Carroll
Nothing for visas, nothing to attract tech talent or fresh capital to these shores. No new funds for the early-stage sector. No mention of connectivity. Where’s the long-term strategy?
Oh right. There’s an election. Of course.
