In a bid to pre-empt Malcolm Turnbull’s big innovation policy announcement on Monday, the Labor opposition has released a new series of innovation policies, including the creation of regional innovation hubs and matching funding for university-based accelerators.
Regional innovation hubs
Labor has pledged to create a regional innovation fund, aiming to expand the network of hubs and accelerators in regional areas, as well as expand the university and tafe based technology hubs.
To do so the government will partner with universities, TAFE, local governments and organisations. Each partnership will receive $500,000, provided matching funding can be found.
The aim is to establish 20 new accelerators over three years and rebalance the sector – two thirds of Australian startup activity takes place in Sydney, according to Labor.
Labor is pledging to encourage more capital to be invested in Australian startups by encouraging “angel investors”, who previously handed over just $21 million in 2012. Labor is proposing a $500 million co-investment fund to invest in early stage startups and incentives for early stage investors.
Investors will receive a 50% tax deduction, up to $200,000 p.a for investments in startups, as well as a capital gains tax exemption for holding equity for more than three years. Investors will be able to deduct losses against wage and salary income and defer capital gains tax.
In order to be eligible the startup must have less than 25 employees, $400,000 in assets and can not raise more than $300,000 through the scheme per year.
Labor will create an independent agency called Innovate Australia, to research and deliver new initiatives for the startup sector. Examples given include tax incentive policies, research centres and venture capital programs.
The creation of an innovation agency had been requested by the startup community.
“StartupAUS has been championing for the creation of an Australian innovation agency and today Labor has answered our calls. They have proposed a new independent agency, Innovate Australia, charged with accelerating economic growth, delivering critical innovation programs and providing expert advice to governments” said StartupAUS CEO Peter Bradd,
Landing pads in the United States and Asia
Labor also proposes to create startup “landing pad” in San Francisco, pledging $1.5 million a year. The model is the New Zealand landing pad, Kiwi Pad, which allows New Zealand entrepreneurs to access Silicon Valley while staying connected with home.
“We want to turn Silicon Valley into Kangaroo Valley,” Bill Shorten said.
Landing pads also offer office space and connections. A notable Kiwi Pad resident is cloud accounting company Xero.
Assistant minister for innovation Wyatt Roy had previously floated the idea of creating Australian landing pads, hinting that it might be included in Monday’s innovation statement.