Startup Sector Tells Senate Inquiry Into Innovation: 'We Deserve More Support Than Car Manufacturing'

Getty/Matt Cardy

Australia’s startup sector is full of enthusiasm and potential – more than the nation’s automotive manufacturing industry – and it needs government support, StartupAUS has told a senate inquiry into innovation.

StartupAUS said government investment into the sector has been “modest” at best – especially when compared to the support it hands out to the flailing automotive industry. It estimates over the past 12 years $30 billion in subsidies has been given to the car industry with at least another $20 million allocated to suppliers until 2017.

“It is highly conspicuous that the Australian government’s support for the startup sector is decreasing at a time when the rest of the world is increasing its investment in this sector,” the group said in its submission to the senate committee.

Pointing to Australia’s startup successes, including Atlassian, Freelancer, BigCommerce and 99designs, StartupAUS says the cohort of strong tech businesses is growing but without quality support their contribution will be hampered.

StartupAUS said a lack of early stage startup funding and the government’s decision to axe both the Commercialisation Australia Program and Innovation Investment Fund in the federal budget have made the road to startup success increasingly difficult.

“The removal of these two programs will undoubtedly lead to a further reduction in the availability of capital to startups in Australia. StartupAUS expects that this will result in an acceleration of the existing trend toward Australian startups leaving Australia in search of more favourable funding environments,” it said.

Similar to the UK’s Technology Strategy Board, Sweden’s VINNOVA Governmental Agency and New Zealand’s Callaghan Innovation, the group recommended a single innovation agency be established – cutting the cross portfolio mess which is currently going on. At the moment tech startups sit somewhere between Malcolm Turnbull’s communications portfolio, Ian Macfarlane’s industry remit and the department of treasury.

StartupAUS also said work needs be done to build a supportive regulatory environment, build a stronger entrepreneurial culture, improve access to capital and boost tech education.

But it wants government intervention to be implemented in such a way that once the industry gains momentum it can be scaled back or withdrawn.

“StartupAUS does not believe that the government should be required to make an open ended commitment to supporting the startup sector, but rather it should develop an exit plan for scaling
back and ending its support of each part of the ecosystem,” StartupAUS said.

The group’s recommendations include taxation changes, entrepreneur visas and establishing a Silicon Valley hub for Australian startups moving to the US.

“An Australian landing pad would greatly assist these companies in getting established in the Valley and improve their chances of success,” it said.

The committee is currently considering submissions and will set a public hearing program in the next few months.

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