The Australian senate this week has passed a pivotal tax-incentive as part of His Honorable Mr Pyne MP (@cypyne)'s 2016 budget announcement, which will benefit Australian startups, in place for the 2016-17 financial year.
Over the next few months, I will be writing a lot of articles covering the National Innovation & Science Agenda (@ideasboomau),
The two-part initiative will make investing in Aussie startups more attractive for corporations, further encouraging innovation, risk and giving the private sector growth a shot in the arm.
“These tax measures are designed to broaden and diversify the economy through economic policies that build growth and productivity,” according to Mr Pyne, stating that "...tax Incentive for Early Stage Investors and New Arrangements for Venture Capital Limited Partnerships will promote investment in innovative high-growth potential start-up companies and improve businesses’ access to venture capital.
There is currently a huge deficit in venture capital funding in Australia, compared to San Francisco and Tel Aviv, and allowing companies to take greater risk in nurturing startups with brilliant ideas, whilst ensuring there is a sufficient tax parachute of protection, is a fantastic initiative.
The Tax Incentive for Early Stage Investors gives tax concessions to eligible early stage investors who invest in qualifying companies. The concessions include a capped 20 per cent non-refundable tax offset and 10 year capital gains tax exemption for investments. (source: industry.gov.au)
Its important for the private sector and startups to be able to hook into venture capital partnerships and ultimately capital, and providing a more venture funding-conducive marketplace is a great step in building a new VC-driven economy, similar to Silicon Valley.
Checkout all the other innovative initiatives of the government, at www.innovation.gov.au.