news Advocacy group StartupAUS has welcomed the government’s new tax legislation that will provide incentives for investors, saying the measures are arguably the “most generous startup investor scheme in the world”.
Introduced to Parliament this week, the Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016, contains provisions to give tax concessions to investors in a move aimed to boost funding of innovative, high-growth potential startups, the government said.
In a statement, StartupAUS said it has been advocating for such measures, which also include CGT exemptions for early-stage investors, and that the changes are expected to have an “immediate, positive impact”.
“This is a huge win for startups in Australia. We’ve been working towards this for a long time, based on the needs of startups around the country to access early stage capital – and now we have one of the most generous tax incentives in the world,” said Alex McCauley, CEO of StartupAUS.
The new incentives will allow innovative Australian companies to scale locally and the knock-on effects of this will be “substantial”, he said, further adding that up-front income tax offsets would encourage investment, and CGT exemption would keep investors motivated to help entrepreneurs succeed.
“The UK has had a similar scheme for some years, and it has been a huge success. This has been our number one priority for some time – it could be a real game changer for Australia’s startup sector,” he said.
The increased funding made available via these incentives is likely to attract more entrepreneurial talent, both Australian and from overseas, while fast-growing companies should lead to speedy, large-scale job creation and economic growth, StartupAUS indicated.
“We will also likely see an increase and diversification in seed investment, ultimately leading to a more experienced, sophisticated pool of Australian angel investors, which will in turn lead to a proliferation of experienced mentors for startups,” Mr McCauley said.
StartupAUS said it has been a “key driver” in the development of early-stage investor tax incentives, pointing out that a similar scheme had been listed as an action item in its April 2015 Crossroads report.
The group’s board of directors presented its recommendations to Christopher Pyne, Minister for Industry, Innovation and Science, in a special board meeting back in October 2015.
Since then the organisation has been “working closely” with government over the measures, it said.