Patrick Durrant | Sydney
In announcing the government’s $1.1 billion innovation and science package on Monday, Prime Minister Malcolm Turnbull said there are four main areas where Australia needs to improve.
Consequently the National Innovation and Science Agenda will focus on four key pillars: Culture and capital; collaboration; talent and skills; and Government as an exemplar.
To create a culture of entrepreneurship and innovation, the government will provide new tax breaks for early stage investors in innovative start-ups. Investors will receive a 20 per cent non-refundable tax offset based on the amount of their investment, as well as a capital gains tax exemption.
To encourage venture capital investment, a 10 per cent non-refundable tax offset for capital invested in new Early Stage Venture Capital Limited Partnerships (ESVCLPs) will be introduced. Insolvency laws are to be reformed, and the ‘same business test’, that denies tax losses if a company changes its business activities, will be relaxed. Existing employee share schemes rules will become friendlier and the crucial role of incubators in the innovation ecosystem will be supported.
To boost greater collaboration between universities and businesses a greater proportion of research block grant funding will be streamlined and refocussed, with an additional $127 million provided over the forward estimates. The Research Connections program will be expanded and relaunched as Innovation Connections, opening up Australian Research Council linkage projects to continuous applications to fast track decisions on collaborative research grants. A new round will also be opened for the Cooperative Research Centre program in February 2016.
Linkages with key economies will be increased to enable Australia to improve research, commercialisation and business performance and access international supply chains and the global market.
Dr John White, Chairman of TKMS Australia, supported this and other aspects of the package, saying the recent formalisation of closer business ties between Australia and Germany is a good example of the Turnbull Government’s proactive approach to cooperation between major economies to benefit Australian companies.
“The agreement signed in Berlin not only recognises the presence of some 650 German companies in Australia but paves the way for closer economic ties that, in a new era of innovation and investment, means local businesses can access much bigger markets,” White said.
For talent and skills development, $51 million will be invested for year 5 and 7 students to learn coding through online computing challenges, while supporting teachers to implement the digital technologies curriculum and targeting ICT and STEM programs such as ICT Summer Schools. The government would also seek to expand opportunities for women in the research sector, STEM industries, start-ups and entrepreneurial firms by celebrating female STEM role models and building programs and networks that support workplace gender equality.
A new independent statutory board, Innovation and Science Australia, would be established, supported by a chief executive officer and accountable through the Industry Minister to a new Innovation and Science Committee of Cabinet, chaired by the Prime Minister.
One of its first responsibilities will be to review the current R&D Tax Incentive to improve its effectiveness and integrity, including by sharpening its focus on encouraging additional R&D spend, drawing on the detailed departmental review currently underway.
The government will seek to improve services through the Digital Transformation Office, making government more accessible to start-ups and innovative SMEs by breaking down barriers to technology procurement. These businesses will find it easier to compete for the $5 billion that the Government spends a year on ICT through a new Digital Marketplace, to be built by the Digital Transformation Office. Via the Business Research and Innovation Initiative, the government will challenge SMEs to deliver innovative solutions for government, rather than tendering for an existing product.
The agenda will include a focus on innovation in the Defence White Paper, due out early next year. For more details go to the innovation.gov.au website.
ADM Comment: With the spirit of innovation clearly at the forefront of government thinking, ADM hopes that the Capability Technology Demonstrator (CTD) program and the related extension program from DST Group will see a funding boost in the next budget. The steady decline of this framework has been a sad tale to watch. Fingers crossed ADM readers.