Shorten looks to convert Silicon Valley into Kangaroo Valley

Ahead of the federal government's innovation policy announcement on Monday, the opposition leader has announced a further set of initiatives he hopes will boost Australia's innovation.
Written by Asha Barbaschow, Contributor

The federal opposition leader Bill Shorten has announced a further set of initiatives to his list of schemes he hopes will secure Australia's spot as a competitive innovation hub and create the jobs of the future.

On Friday, the Labor leader announced his party's intention to create a Regional Innovation Fund, back Angel Investors in the country, form an independent innovation governing body, and build a launch pad for expatriates in Silicon Valley to return to Australia.

Although two-thirds of the startups in Australia have emerged from Sydney, Shorten said the vision needs to stretch beyond the country's east coast capital cities.

"We think there's great ideas in all regions of Australia so we want to provide the opportunity for clever people and back their ideas in regional innovation hubs right through Australia," he said. "The people who are bold and optimistic are backing their ideas for the future need a political party in government that is bold and optimistic enough to prioritise the jobs of the future."

In order to do this, Shorten proposed the creation of Innovate Australia, an independent agency charged with monitoring innovation in the country. Shorten said such a model works well in the United Kingdom.

"As a nation we're pretty smart but the issue is that at the moment, we're good at publishing some of the very best research papers in the world, but quite often what we need to do is give people their good ideas a chance to commercialise," he said.

The opposition leader said he will match Innovate Australia with regional innovation hubs and aid with startup capital as well.

Shorten said he wants to back Angel Investors and early stage venture capital initiatives, putting what he called smart money behind them, which he believes will encourage more investors to come to the party and to solidify a pipeline of private sector investment. He said this will translate into the jobs of the future.

"Currently we would invest more money in the Melbourne Cup in one day than we do in terms of Angel Investment in Australia," Shorten said.

In a bid to be a part of the worldwide startup ecosystem, Shorten said he intends to create the first of a series of "launching pads".

"At the moment there's 20,000 smart Australians that have gone to Silicon Valley; we want to give them a chance to have a bigger footprint in Silicon Valley, develop their own ideas with the aim of coming back to Australia," Shorten said.

"We're proposing to set up a launching pad with the aspiration to help turn Silicon Valley into Kangaroo Valley."

The idea of the launch pad, Shorten said, is to get the Australians that are working there to achieve on a bigger stage and give them the opportunity to come back and reinvest in Australia.

Shorten's intention to launch an independent body charged with overseeing innovation in Australia is not dissimilar to the recommendations made on Thursday by the Senate Economics References Committee in its final report on Innovation in Australia.

Amongst other things, the committee recommended the federal government establish an independent government agency with a mandate to administer and coordinate innovation system policies and programs. The committee said such a body would be responsible for maintaining a continuous and consistent approach to innovation policy across the whole of government.

The committee also recommended the Australian government work in collaboration with State and Territory governments to adopt a range of measures which would support the role of local and regional innovation ecosystems.

In September, Shorten introduced a AU$17.8 million startup initiative he hopes will drive a new generation of innovators, risk-takers, and wealth-creators. Shorten wants 2,000 students to partake in a "Startup Year" whilst at university to "develop their ideas, get business know-how, and connect with finance".

This initiative boosted the Labor Party's Australian university investment pledge to a total of AU$2.5 billion.

Shorten originally announced his intention to "kick-start the economy and create jobs" in his budget reply speech in May, outlining a plan if he were to become prime minister to turn Australia into the "science, startup, and technology capital" of the region.

He also flagged his intention to introduce the teaching of coding in every primary and secondary school across the country, wipe the student debt for up to 100,000 young people -- especially females -- who study science, technology, engineering, and maths (STEM) subjects, add 25,000 STEM teaching scholarships for Australia's future teachers, and sink AU$500 million into a smart investment fund to back Australian ideas and "help them compete on the world stage"

On Thursday, the Labor party called for a parliamentary inquiry into the Australian government's proposed crowdfunding legislation, which was released earlier the same day.

In a joint statement from Shadow Parliamentary Secretary assisting with digital innovation and startups, Ed Husic, and Shadow Treasurer Chris Bowen, the Labor duo accused the government of intentionally waiting until the last day of parliament for the year to sneak in legislation.

Additionally, the opposition said requests were made to the government a fortnight ago that asked for an urgent briefing regarding the framework. According to the joint statement, the government rescheduled the briefing with Treasury officials on Thursday morning; however it did not disclose that the legislation was slated for introduction hours later.

"The release of the legislation confirms industry concerns that startups will be forced to wear high costs and red-tape if they want to use equity crowdfunding as a capital pathway for early stage innovation," the statement said.

"Labor appreciates that equity crowdfunding reform is complex, which is why we have repeatedly stated our genuine preparedness to work cooperatively and in a bipartisan way with the government on any draft legislation.

"This is evidence that the Abbott-Turnbull government is simply all talk when it comes to building a collaborative, bipartisan approach to innovation."

The newly introduced legislation details how non-listed public companies, including startups, can access crowdsourced equity funding from external investors, with the Bill [PDF] amending the Corporations Act 2001, with consequential amendments to the Australian Securities and Investments Commission Act 2001 as well.

The crowdsourced funding legislation will now allow eligible unlisted public companies to raise up to AU$5 million in funds in a 12-month period from retail investors. Companies will be required to meet turnover and assets tests, however.

Public companies that are not listed on the Australian Securities Exchange (ASX) will be given a five-year holiday grace period in which they do not need to report on financials or disclose other standard requirements. However, within 12-months of registering as a public, non-listed company, the business must have completed a crowdsourced funding round of less than AU$1 million.

The legislation also tables a retail investor cap of AU$10,000 per issuer, per 12-month period; and crowdsourced equity funding intermediaries will be required to hold an Australian financial services licence that expressly authorises the licensee to provide a crowd funding service.

According to Husic and Bowen, the swift move toward an inquiry was in response to calls from the startup community to oppose the laws in their current form.

"While we have been willing to work with the government, we are not willing to be accomplices in an Abbott-Turnbull government attempt to ram through laws so heavy with red-tape that it makes it less attractive to utilise equity crowdfunding," the statement said.

"Labor will refer the laws to a parliamentary inquiry to ensure we see an Australian equity crowdfunding regime that actually supports early stage innovation."

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