Adam Bandt (Melbourne, Australian Greens) Share this | Hansard source

I rise to make a few brief comments in support of this legislation, the Tax and Superannuation Laws Amendment (Employee Share Schemes) Bill 2015. The legislation makes what can only be described as a common-sense change and that is to make it easier for people who are in a position to have start-up companies, who want to succeed and to be part of that from the ground. We know that some of the changes that have been made before attempted to strike the right balance but did not in fact do so. They did that because an up-front tax bill was essentially imposed on the people who wanted to join in on start-up companies from the beginning.

We have a significant challenge in Australia, which is to grow those sectors of our economy that are not reliant on a 'dig it up, chop it down, ship it off' mentality. To do that, we will need to create an environment and ecosystem that will support companies and businesses that put a premium on innovation. To that extent, this bill makes a sensible change. In addition to removing the up-front tax bill, it will also provide tax concessions for start-ups acquiring shares under schemes, and employees of start-ups who are issued options will get a 15 per cent income tax deduction when those options are exercised after three years.

That is a series of sensible moves. There are two things that this bill does not do, though, that need further attention. Firstly, we need to address the critical issue of how in an environment where we support start-ups we also ensure that people who are genuine employees are not forced to live on less than the income they would otherwise get if they were treated as bona fide employees. That is, we have to ensure that arrangements that are struck in the course of start-up businesses or in similar areas do not undermine the basic floor of minimum wages and conditions that people would take for granted. Under this government, we have seen the proliferation of the carving out of sections of the Australian workforce from Australian minimum standards. We see it with the use of certain kinds of visas, the contracting out and the proliferation of independent contract arrangements that could only be said to be designed to avoid minimum standards and, in that context, potentially undermine tax revenue as well. We need to address that. Sadly, this bill does not do that. There is no reason to stand in the way of this bill, but it needs further attention.

Secondly—and I spoke at the start about the need to create a supportive ecosystem—if we want to create an environment in Australia where we can grow those sectors of the economy that are based on innovation and on our intellect, then we need to ensure that research and development and innovation in this country is supported. Yet, under this government, we find ourselves spending the lowest that this country has spent on research and development and innovation since we started keeping records. We are at an over 30-year low on spending on research and development and innovation in this country. So you cannot, on the one hand, create a notional legal framework that supports the establishment of start-ups and innovation while, on the other hand, you take the axe to other tax concessions such as for research and development but also to those public institutions that helped create the environment to partner with the private sector to grow research and development and innovation in this country. We are going to need to have something to sell the rest of the world when the rest of the world tells us to stop digging, and that point may come sooner rather than later. To do that, I have to be clear that we cannot compete with China and India on wages, nor should we try to. Our advantage in Australia and in this region is going to be based on our minds. That means putting in place the kinds of investments in research and development and innovation that other countries, our trading partners, are doing. Korea or Japan have well above three per cent of their GDP being spent on research and development and are on their way to four per cent and possibly even higher, and the US has set itself a goal of three per cent of GDP for public and private investment and spending on research and development. Yet here in Australia we languish at 2.2 per cent and we are going lower under this government.

It is not enough to come up with a piece of legislation that makes a common-sense change; you also need to match it with support in the innovation ecosystem. That is something that we have seen attacked every budget time under successive governments. Every time it comes to the federal budget, governments seem to treat the R&D pool as a bit of a honey pot to dip into, and the consequence of that is that people do not see Australia as a place to continue to invest in or to start a job and continue a job. If you are a young scientist, if you are a young researcher who could be about to contribute a groundbreaking discovery, and every May you see the threat of funding cuts to research and development and then you look overseas to countries like the US or the UK where they have a stable funding environment, you understand why many of them choose to join the brain drain and go overseas. We need to stop that, and the only way to stop that will be to set Australia on a path to three per cent of GDP—something that we, the Greens, have been calling for for a while. I am glad to see that the opposition is now supportive of that. It is time for the government to get on board as well, because if we get on board in increasing our funding for science, research and development and innovation, then measures like this bill—welcome as they are—will really start to bite and we will be able to grow that sector of the new economy.

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