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Monday, 2 May 2016
Page: 4020

Mr WILLIAMS (Hindmarsh) (17:14): I commend my colleague the member for Solomon on her comments, especially the story of Tesla. I think in Australia we aspire to have more Teslas, more Facebooks, more Apples, more Samsungs and more LGs—these types of world companies that have fantastic technology, fantastic innovation and have used brilliant intellectual property to create wonderful, world-leading products. In Australia, we are not without our great success stories in this space. We think about SEEK, a company that has dominated online recruitment for many, many years now. It has been a world leader, expanding its borders and product diversification. We think about Atlassian, one of the great success stories, listing on the stock exchange in the US and being a leader in its software. We think about other companies, like Freelancer, with niche software. The list goes on.

The challenge for our nation is to have more of these companies, because they provide great jobs and a great future for our nation. This is why the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 is so important. It helps create an entrepreneurial and risk-taking culture, and it inspires innovation. It is this risk-taking and entrepreneurial culture that Australia has not been brilliant at, when we compare ourselves to other countries. If we change our culture for the better, we will have greater economic benefits—more jobs, a better economy and a better future.

The National Innovation and Science Agenda contains complementary initiatives to ensure start-ups and innovation companies are supported at different stages of idea development. It was only just last week that colleagues and I met with a number of start-ups and entrepreneurs from around Australia. We heard similar stories of the challenges they face seeking venture capital, seeking financing and, unfortunately, having to go to the United States or elsewhere for that. That is why these measures are so important. They will help improve investment in early stage innovation companies. They will help entrepreneurs overcome a difficult stage in the financing life cycle, sometimes described as a 'valley of death'. I know from experience in my own state that 'valley of death' has many, many different interpretations; in shipbuilding it has similar connotations of an industry that struggles, but we are fixing that, as we know, through our commitment to Defence shipbuilding. In terms of the valley of death for start-ups, the term applies to an early stage development where they are unable to meet their cash flow requirements.

The tax incentives for early stage investors measure will support investments in these early stages by attracting investors who can offer funding and, importantly, business expertise that will assist with the development and commercialisation of innovative ideas. In Australia we are often very good at the research part of it. Our universities, our research institutions and our companies do some great research. It is that commercialisation element that we struggle with, and that is something that this bill will assist.

In terms of commercialisation, the Venture Capital Act, amended by schedule 2 of this bill, will attract greater levels of investment in growing companies, improving their international competitiveness. The complementary measures provide tax incentives for funding through venture capital limited partnerships, including early stage venture capital limited partnerships to attract investments at the early stage of development. Although Australia has experienced recent momentum in this field, with over $600 million in venture capital raised or planned since 30 June 2015, this funding has been generally concentrated in the technology sector. The measure builds on this momentum, to improve funding for promising projects in industries beyond the technology sector.

In framing this bill, we consulted with a range of stakeholders, from experienced investors to start-up founders and industry bodies, to design these two measures in a way that attracts investment without creating unnecessary regulatory burdens. We are answering the call from industry, and this has been replicated through our focus on innovation since late last year, with the appointment of a cabinet minister for innovation—the Minister for Industry, Innovation and Science—an Assistant Minister for Innovation and a national innovation statement, which has received great acceptance and recognition from broad industry, universities and others. They see it as a massive step in the right direction. You will recall, Mr Deputy Speaker, that we have had other initiatives, whether they be employee share ownership schemes or crowdfunding, with support for greater incentives in those fields to help finance the start-ups and the entrepreneur culture and ecosystem we have in Australia.

In closing, this bill is another practical example of how the Turnbull government is acting to support the transition in our economy from the mining boom to the ideas boom. I commend the bill to the House.