StartupAus urges for policy changes to help local tech sector

It marks the release of the advocacy group's sixth annual Crossroads report.
Written by Aimee Chanthadavong, Contributor

Australian startup advocacy group StartupAus has acknowledged that while there have been some noticeable improvements in the local startup scene when it comes to capital, talent, and business growth, it has also called for specific policy amendments to be made that it believes would improve the maturity of the local tech sector.

In the sixth annual Crossroads report, StartupAus proposed that there are 10 policy amendments government should consider, pointing out that lack of action could hurt the growth of Australia's tech startup sector.

"The political headwinds facing technology in general -- and particularly large global tech firms -- are now having very real ramifications for Australia's burgeoning domestic tech sector," StartupAus CEO Alex McCauley said in the report.

"Politicians and policy makers in Australia and around the world are rightly grappling with difficult questions about the place of technology in society and the way tech companies operate. But, in a country such as Australia, with a still-developing technology industry, racing towards clamping down on tech could be counter-productive."

Some of the policy changes that have been put forward include amending the R&D tax incentive to more clearly support software claims; broadening the early stage innovation company tax incentive to allow more startups to qualify for the scheme; improving the speed of export-related reimbursements for startups under the Export Market Development Grant; reducing payroll tax for young companies; and improving the Entrepreneur Visa, which is currently "internationally uncompetitive, and meeting the qualification criteria is extremely difficult".

See also: Moving from startup to established company: Four big shifts (TechRepublic)

The report also suggested that amendments to legislation affecting the Employee Share Scheme should also be made changed.

"This is increasingly critical as more successful Australian tech companies reach maturity and start to fall out of the 'startup exemption'. Specific amendments should be made to the regime which extend exemptions to a broader array of tech companies, and employees should not be counted as 'investors' for relevant corporations legislation governing private firms," it said.

The report was also critical of the Telecommunications and Other Legislation Amendment (Assistance and Access) Act, saying it should be amended to limit its scope and clarify that individuals cannot be compelled to cooperate without the knowledge of their employer to "wind back some of the negative international perception that Australia's tech firms may be operating with compromised systems".

Meanwhile, StartupAus also wants to see an increase in access to public data sets produced, such as by making data collected by the Australian Securities and Investment Commission (ASIC) for free and openly available, rather than for a fee.

"Removing these barriers would help data-gatherers access and use public information to build a more comprehensive picture. Open access to company data would also improve transparency and efficiency for investors, incubators, accelerators, and public programs managers who support startups," the report explained.

Other suggestions included appointing "innovation ambassadors" to attract R&D projects from global tech firms and introducing copyright safe harbour protections for technology companies.

Despite the calls for the policy changes, the Crossroads report acknowledged that over the years capital for startups is abundant, highlighting how high growth tech firms are now raising almost twice as much on average as they were in 2015, up to an average of almost $19 million.

StartupAus attributed the increase to the result of Australian venture capital funds raising "unprecedented sums, driven strongly by the growing interest of superannuation funds in the sector".

The report also indicated that due to the introduction of the Global Talent – Employer Sponsored (GTES) visa program, formerly known as the Global Talent Scheme, local businesses have been able to grow due to access to skill migrants.

"The impact of these programs has yet to be fully felt, but their introduction underscores a clear mindset shift towards recruiting the world's best to help boost Australia's tech sector," it said.

The GTES was made a permanent program in August after a 12-month pilot and was designed to help Australian businesses and startups attract international talent.

The federal government revealed that during the pilot 23 companies signed up for GTES agreements during the last financial year. Among those companies included tech unicorn Canva and quantum computing firm Q-CTRL. 

The GTES was introduced after the government decided to abolish the 457 skilled visa scheme that resulted in the removal of a number of IT roles from the eligible job list. This was later reversed however, and a number of jobs were added back onto the list

Then Minister for Citizenship and Multicultural Affairs Alan Tudge had previously framed the GTES as being a scheme that focused less on skill levels and more on addressing the labour market shortage.

"With digital disruption to almost every industry, there is a global war for the high-end talent, and we need to ensure our visas support this," he said in August last year. "We are therefore complementing the national and regional skills lists with a number of other more bespoke arrangements." 

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