Budget 2016: StartupAUS says it’s a “disappointment”

news StartupAUS, an advocacy group, has cautiously welcomed some announcements made in the Federal Government’s 2016 Budget, but said that overall it was a “disappointment for startups”.

The group welcomed what it called the “limited support” for FinTech in the Budget, as well as the expansion of the New Enterprise Investment Scheme (NEIS) that aims to help job seekers become self-employed small business owners.

While StartupAUS acknowledged support for young people considering entrepreneurship is important, it criticised the measure as “small” and “niche” in an area where “bold, substantial action” is required.

“This is an election year budget, and the first real opportunity for Malcolm Turnbull to outline his vision for the country’s economic future,” said StartupAUS CEO Alex McCauley. “This budget was a chance for the Government to make good on its rhetoric about continuing to build momentum on innovation and Australia’s economic transition. But, from that perspective, it is a disappointment.

Citing Treasurer Scott Morrison’s speech in which he said: “Harnessing the power of innovation and entrepreneurship, to create our own ideas boom, lies at the heart of our plan to support jobs and create growth”, McCauley commented that there was little in the budget to advance the government’s support for innovation and entrepreneurship.

“Almost all the measures relevant to startups that the Treasurer alluded to in his budget speech had already been announced, six months ago, as part of the National Innovation and Science Agenda,” he said. “None of those measures have come into effect yet, although some have made encouraging progress recently.”

The group also criticised the government’s claims of support for Australia’s transition to a “new economy”, saying that ‘new economy’ spending in the budget was in the form of billions of dollars spent on “old economy industries”, such as shipbuilding and the traditional railway system, with spending on research and development barely featuring.

“This is a disappointing and outdated approach,” said the CEO. “Australia needs to substantially boost its R&D spending if it wants to measure up to its international competitors – we are well outside the top 10 countries globally both in terms of absolute R&D expenditure, and as a percentage of GPD.”

“It’s hard to see Australia as genuinely committed to transitioning to a ‘modern economy’ if its key spending priorities are shipbuilding, rail, and un-targeted business tax cuts. That won’t be lost on those watching our progress closely, both here and overseas,” he said.

The group also said the budget was a “missed opportunity” to make good on promises of action stemming from the National Innovation and Science Agenda (NISA).

While startups did not expect any big announcements in this budget, it went on, implementing the NISA agenda is still “the top priority”.

“It’s critical that we don’t lose sight of the importance of genuine high-growth technology companies as a critical driver of Australia’s emerging economy,” said McCauley.

StartupAUS added that it views the upcoming election campaign as a “key opportunity” for both the government and opposition to lay out their vision for startups and innovation in Australia.

“We can’t rest on our laurels here,” concluded the CEO, “our competitors are acting decisively. We can’t afford to be left behind.”

Image credit: Still from Gladiator