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With the announcement of the Federal Budget looming this evening, start-up executives are calling for more money to be invested into growing new companies, and policy surety in regards to the R&D tax incentive.
Nick Northcott, the Executive Director of legal tech startup Immediation, has said that in order for startup businesses to gain traction and expand into global markets, they need more financial assistance from the government during the growth stage of the business.
“What we actually need now is more support at a later stage than ideation,” he said. “Once the product has been validated, how do we support these early-stage companies to be the next big Canva or the next big Atlassian.”
Referring to startup as “the next big export opportunity for the country”, Mr Northcott continues on to explain how startups and small businesses will be an economic booster for the Australian economy, as the ultimate provider of jobs.
“$1.2 billion, has been bandied around for apprenticeship schemes and subsidising the cost of those apprenticeship schemes. That’s fantastic for trades. But what are the jobs of the future? And how are we subsidizing really smart, talented people into those jobs of the future?”
“I would love to see schemes where we can take people who have already been invested in by the government through their education, and help them build small companies into big companies by subsidising them into new roles and job creation.”
The R&D Tax Incentive will be another topic of debate in amongst the budget announcement. The proposed amendments to the scheme would put a $4 million cap on repayments, and create a tiered system for the incentive.
The report from the Senate Economic Legislation Committee into the changes to the scheme was due to be released on April 2020, however have been delayed twice to be mad available on October 12.
In a pre-budget address last Thursday, Prime Minister Scott Morrison confirmed the highly-debated scheme will be discussed during the budget announcement on Tuesday.
Mr Northcott calls the R&D tax incentive an “indirect measure” and calls for “total policy consistency” in regards to the scheme.
“We need absolute policy consistency and surety,” he says. “Messing with the rules around what people can claim, and what they can’t claim is really disruptive to the sector and means people lose confidence in the system.”
“Either just leave it alone and let it do its thing, or think about more direct measures such as grants and other investment into scale-up businesses that can support and fast track their development into global markets.”