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Money subscribed to venture capital companies



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DR. H A R R Y E D W A R D S , MR

S H A D O W M I N I S T E R FOR S C I E N C E A N D T E C H N O L O G Y

'.Federal Secretariat:-P.O. Box E,T3;Queert Victoria Terrace, A.C.T. 2600 Tel.ยท: (062)73 2564

"In its decision to provide for 100 per cent tax deductibility for money subscribed to venture capital companies, the Hawke Government has belatedly recognised that the real action in high technology industry development and providing new jobs must come from the private sector of the economy.

"The Government's decision is based on the recommendation of the Espie Committee which was commissioned by the previous Liberal/National Party Government.

"This tax measure is important as a key step in "seeding" the development of a private sector venture capital market in Australia, as happened with the Small Business Act in America.

"Even so the Government has gone only half the distance in providing the necessary incentives to stimulate Australian industry to "get with" high technology and the increased market-oriented research and development which nourishes it.

"While the present Minister for Science and Technology gets carried away with so-called 1 sunrise1 industries, it is of the utmost importance to stimulate the development and application of advanced technology in existing industries - which will continue to provide the bulk of employment for the foreseeable

future. Industries can thus be revitalised, renewed.

"The Government should give urgent consideration to other incentives to encourage ongoing industrial research and development and advanced technology. One such proposal is that recently recommended by the Australian Science and Technology Council (ASTEC)

for a write-off premium of 50 per cent in respect of expenditure incurred for research and development. .

"The cost of such an incentive, which would contribute importantly to underwriting job generation in existing industries, would be "peanuts" compared with the $1,000 million the Government has put into various "make work" schemes, some of dubious worth."

CANBERRA 14 September 1983

(Enquiries 72 6818 )