It’s just under three weeks until the Federal Government releases the 2015 budget and Treasurer Joe Hockey says while it’s impossible to avoid new spending on industries like defence, the government will be looking to redeploy capital to help lift growth.
“Our focus in this year’s budget will be growth and jobs,” Hockey told the Australia-Israel Chamber of Commerce today. “We need to better control our spending.”
Part of that prosperity will be fostering an economic environment more conducive to the growth of tech startups. The government is currently consulting with industry over employee share scheme legislation and crowd sourcing equity for young companies.
Today, Hockey revealed he also met with the founders of Atlassian to determine what the industry needed.
“Earlier this month I met with an inspirational bunch of entrepreneurs in the offices of Atlassian. Two former university students started Atlassian with a $10,000 credit card loan in 2001, they now sell software to more than 30,000 customers worldwide,” he said.
“Atlassian has its home base in Australia, has offices in the United States and Europe. It employs 6,000 people and has a market cap of over $3 billion. And as the young entrepreneur who started it up said, he has made 99 of his shareholders millionaires. I think many people in this room probably wish they were one of them.
“Now the entrepreneurs in Atlassian are helping to mentor and finance the development of other small businesses and startups. So, I went to them to find out what works and what doesn’t, because they’re the ones who have been through that process. Many of us know that a thriving small business sector is at the heart of Australia’s economy.”
Hockey said “one of the main groups of beneficiaries” of the Budget will be “innovative small businesses” including startups.
He later added that the government would have “more to say” about measures for startups in the budget.
He said he had also sought inspiration from the Israel which is home to more startups per capita than anywhere else in the world.
Last year there was a record 220,000 new small business registrations in Australia, 10% higher compared to the previous year.
But the technology sector in Australia remains underdeveloped. In a report released this week, startup umbrella group StartupAUS estimated there were just 1,200 technology startups in Australia. It found the total number of startups being established was between 20 and 30 per million people, much lower than the annual startup formation rate of up to 250 per million people a year in US hotspots like San Francisco.
Technology companies generate jobs with higher revenue per employee than almost any other sector. According to StartupAUS tech jobs have a higher labour productivity rate compared to the mining sector and tourism.
With a larger multiplier effect than jobs in other sectors, investing in tech is one way to boost employment and promote future economic growth.