Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Hansard source

In talking to the Tax Laws Amendment (Small Business Measures No. 3) Bill 2015, a number of members of the House have referred to the benefit that would be generated through some of the measures announced particularly for start-ups. Schedule 2 talks about the deductibility of professional expenses for those that are starting their own business and changes to the way in which those expenses are paid. It is a good start. On a range of areas, there are things that do need to be done. But at least this is a modest contribution—and one that reflects something else that is going on, which I think has been a good development over the last 12 months in particular. That is that, within the public space, we have been talking more and more about the contribution of start-ups within the Australian economy, the value that they create both now and into the future—and for good reason.

I saw some of that good reason last night when I attended the University of Melbourne's Melbourne Accelerator Program entrepreneur gala. There were 400 people in attendance; a huge turnout and a terrific initiative by MAP. They are really working hard, particularly within Melbourne, to harness a lot of creative energy and the application of that energetic spirit to see a number of new businesses created with the potential, using technology, to disrupt quite a lot of business models and the way in which things are being done both here and, potentially, in the broader international community. Last night they had a number of case studies from people, including the CEO and co-founder of Venuemob, Ying Wang. Venuemob is for people trying to find venues to hold different events, and it is a platform for people to hire those venues and get that done very quickly, adding huge value in the process. He mentioned last night to the dinner that he will be looking at expanding his operation within Australia but also looking actually to take their operation offshore for the first time. They have done that within a very short space of time. Venuemob is the first marketplace platform for the $18 billion events industry. They started off small and are growing very rapidly.

Djordje Dikic is the co-founder and CEO of Palette, which is looking—particularly for home renovations—at ways in which people will be able to change the way they paint and decorate their homes, with some fairly groundbreaking technology. They have won numerous industrial design awards. They have already raised $1 million in funding from private investors and are looking to do some pretty innovative work there.

We had Ivan Lim, the CEO of Brosa, who is the co-founder of that firm. They label themselves 'the Zara for designer furniture'. They were also part of the MAP incubator in the 2014 batch. They are bringing designer furniture direct from makers to customers. Again, they started off small and have grown very big and are doing quite well.

Omny have a personalised radio app that is getting quite a lot of traction. They have secured partnerships with Southern Cross Austereo, which is Australia's largest radio network, and CBS in the US.

Those are four examples mentioned at last night's event, showing us the huge potential that exists within entrepreneurs in this country. I want to commend, if I may, MAP and in particular a number of people. There is Doron Ben-Meir, who has just started his position there at MAP and who, I understand, was previously at Commercialisation Australia. There are also people like Charlie Day and Rohan Workman, who are doing some great things there in helping usher in the next lot of businesses that will take not only Australia but the world stage by storm. They are very important.

But why do I mention them? There is a perception that these are small businesses. While we are very big fans on both sides of politics of the work of small business in this country, these businesses in particular have an ability to scale up phenomenally quickly. The number of jobs that they will create as a result of that work means that they are completely different from the types of small businesses that would benefit from some of the things that are here—some of the measures that are being reinstated, by the way. This is as a result of decisions made by this government, on its first election, to get rid of measures that Labor in office put in to aid the cash flow and aid the operations of small business. Those were cut by the Abbott government and are now being reinstated in a very clumsy attempt to claim credit for that by this government.

Putting that aside, we should be looking at the huge economic, productivity and employment-generating potential of start-ups in this country, and we need to do more. This bill, as much it is being paraded as in part conferring some benefit to start-ups, will help to a modest extent, but a lot more needs to be done. There are a number of areas where there are serious impediments holding back the growth of our start-ups in this country. It is a fact—it has been recognised—that the rate of start-up formation in this country is horrendously low and we need to do more in this space.

If we want to see start-ups grow a lot quicker and a lot broader and be able to make a much bigger contribution to the Australian economy, we have serious issues to deal with, particularly in terms of skills and talent and making sure that there are people who have the capability to transform ideas into reality. We need to see more people. That is why Labor have mentioned, for example, that we want to see more people trained in science, technology, engineering and mathematics. We put in place some measures not only to encourage people to take that up but also to make sure that we have the capability to teach those subjects, by paying particular attention to teacher training and seeing growth in that space.

I am aware that there have been sections of industry that have been very keen to see teacher training rolled out, particularly to benefit the ICT sector. They have not necessarily met with a great reception from the Minister for Education and Training. I do know that the Minister for Communications is very aware of this issue and very alive to this matter, but, as is the case with this government, it only has a few people who recognise the types of issues that need to be dealt with, and then you are met with stonewalling from the senior leadership of this government, which simply fails to understand that there are serious tasks that need to be undertaken to address the types of issues that are facing this sector. It does need the application of resources and effort, particularly if we are to deal with the huge skill shortages that are crippling and holding back start-ups from evolving.

The other area is capital, where we need to see more money flow in and be able to support, again, the transition of idea to reality. Start-ups start very lean. They might get some benefit from some of the measures announced in these bills, but it is not going to tide them over. It is not going to sustain them. It is not going to give the big uplift that is required to ensure that they become a success.

We need to take a hard look at the way in which the taxation system as it currently stands impacts on the ability of start-ups to grow and, importantly, impacts on the capacity of angel investors, for instance, to support start-ups. Angel investors are relied upon to many extents to help start-ups reach the next level of their development. We need to look at what can be done, as has been done in other parts of the world, to support the taxation arrangements that ensure that angel investors can play a bigger part in supporting start-ups.

I note that my colleague the member for Oxley made a number of references today to what is happening in other parts of the world. I will not go through all of those other than to make the point that this is a global competition. There are other countries that recognise the potential economic benefits of having a very solid ecosystem that is supporting start-ups, and they are taking concrete steps to support them. We are not doing it. We are not doing it at the same rate. We are not doing it in the same breadth. We are not doing it at the same pace. We need to be doing more. Certainly I think that this is an area that needs to be pursued in making sure that we align our taxation arrangements in a particular way that will help angel investors and those that want to get involved in this space to support start-ups and see them grow. We need to see more happen in that area.

In talking of capital, too, and the types of things that could be done, while we are talking about these bills and what might be done to support small business: again, start-ups are not small businesses. They have a much greater capacity to grow. Some of those businesses that I mentioned earlier that were profiled last night at the entrepreneurs gala by MAP are already looking to step up onto the world stage. There are the types of businesses that I saw—the start-ups that were being supported, for instance, by muru-D—at their investor night a few months ago which are looking to expand into China. After only a small period of time in existence, they are now looking to go elsewhere. These businesses need a different set of arrangements to support their growth, and they need capital to survive.

One of the things that we are very concerned about is ensuring that we have, for example, platforms that can provide that type of capital—platforms, for example, for equity crowdfunding. There have been a number of us that have been championing this, and we have indicated to the government—and I have actually held very productive discussions with the Minister for Small Business about what both sides of parliament can do to work together—that this is not a contentious issue, and that we can cooperate in a productive way to help fast-track the introduction of laws which will see equity crowdfunding become a reality in this country, and which will enable us to harness the power of the internet so that we can raise funds, allow people to have a stake in start-ups, and ensure that those start-ups go from strength to strength.

I note, for instance, that the government has just released yet another discussion paper, talking about what might be done in the case of equity crowdfunding for Pty companies. I note the surprise that has been expressed in some quarters—that yet another discussion paper has been released instead of the actual draft legislation. I understand the issues that lie at the heart of this most recent discussion paper, but I have to say that I am surprised that they had not been flagged sometime earlier. I understand that the consultation period for this discussion paper is set to close on 31 August. I hope that that does not inhibit the ability of the government to release its draft legislation very quickly, because the amount of time that will be required to set up equity crowdfunding in this country—in terms of having a legal framework in place—will be critical, and it will take some time. Having said that, we remain committed to working with the government on this, because this is one platform that will be able to provide capital for start-ups that are needing it.

If we are going to talk about start-ups, we need to have a dedicated focus on them and we need to have a legislative program—a reform agenda—that will allow them to grow and to prosper, and to do so in a much more timely way. But we should not confuse that with the types of measures that are being discussed in this bill. I think, in part, the reason why start-ups get referenced in these types of discussions about small business is that the government recognises that it is having to reinstate measures that they have pulled apart. When Labor was in office, we put these measures in place. The government pulled them apart upon being elected, and they have had to put them back in. And to try and create a cover—that they are doing something unique and novel and new—they have tried to refer to the fact that they have brought in some of the measures in the bill. These are modest—sure, they will be welcomed by some start-ups, but they are not the big-ticket items that will help start-ups in terms of what they need or want. And we should not confuse a lot of the great work that is being done by Australian small businesses with the type of work that is being done by start-ups. There is a type of economic potential that is relevant to them both, but they demand different levels of attention. We certainly think that start-ups need to be taken in a different way.

Having said that, we recognise—certainly on the Labor side—that we need to ensure we can do whatever we can—particularly for the next generation of young Australians, who are much more willing to embrace risk and to pursue their ideas, and to see those ideas translate in a way that will be a huge economic benefit to this country—to support start-ups, and we need to make sure that, in the public's mind, they are aware of their potential. We need to make sure that we are able to muster effort from a whole range of different areas to ensure we have a very supportive culture that will enable those start-ups to take the types of risks that they need to take in order to grow and to be able to bring others online as well. There are elements of this where we will be critical of the government; there are some areas that we think will work. Particularly when it comes to start-ups, we hope that we will see a lot more happen in a much shorter time frame.

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