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

Thank you, Deputy Speaker Vasta, and also my friend and colleague the member for Parramatta, who has kindly allowed me to sneak up the speaker list and contribute in this debate on a matter that has been a long time coming. This will not be a new matter for members of Australia's start-up community, who have for some time considered what is required to improve the strength of the community in Australia and the ability of new firms to emerge and be able to deal with the two things that confront the growth of start-ups, which is access to talent and access to capital. Access to talent, in many respects, is very broad insofar as it is not just the people that start-ups need to help grow the firm but the talent that sits around providing strategic advice at various stages of a start-up's growth and, importantly, through those difficult periods of enormous pressure—and when those pressures become existential as to whether a start-up will succeed or fail. There has been a lot of commentary and consideration about how to retain directors with expertise. Generally in this country, directors are worried about whether they should stay on with a fledgling firm or get out. There has been a lot of discussion about how we treat those situations and how to retain that talent, particularly at key times.

As has been outlined by the opposition, there are a lot of things that this legislation has going for it. It was pointed to in the National Innovation and Science Agenda released back in December 2015, but, as an observation, it has taken a while to get this legislation here. There is a simple reason for that: this is very complex. What is being proposed is not an easy thing to do. As the shadow Treasurer has indicated, it is not our intention to stand in the way of this. You heard from the member for Griffith, who is also a co-chair of the Parliamentary Friends of Innovation and Enterprise and who has a lot of interested in this as well. Out of her contribution to this debate, I acknowledge there are things that are definitely worthy of consideration, like safe harbours and the way they have been structured in this bill. Every time there is a winner in some laws that are put forward in this place, there is also someone who will not necessarily be as warm to what you are proposing—it is understandable. That is particularly the case in some of the arrangements here where, for want of a better term, there is 'forgiveness' to allow people to sidestep what would normally be their obligations to others who have provided service, particularly to fledgling firms. They are rightly extending support to a firm where they expect to be paid for that service and to have a return for that service. In some instances, forgiving debts, for instance, or creating that type of leeway through the various mechanisms that are provided for in this Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Bill 2017 means that there is one person who wins and there is another person who is not going to be so happy. I do not say that they are losers per se, because I do not think it is a finite process. If the firm are able to trade their way out of their problems through some of the measures that are foreseen in this bill, it may be the case that the other firms that are affected by this on the other side of the ledger will win longer term, so we do need to take a longer-term view on this. That is what this bill allows for, and I think it is important that it does that.

As an opposition, I think we have tried to be constructive in the amendments and the contributions that have been made today, flagging that we should go through a Senate inquiry process to test this and to explore some of the concerns that have been raised. Without traversing ground that has already been covered by the shadow Treasurer, we should test some of these things out and then be able to determine a position—especially for the other place, which will consider this ultimately. I think there will be a lot in the start-up community that welcome what is being put here today, which is understandable. There will be others that will not necessarily share that view. There will be others that will say, for instance, that you should not be cutting corners—if I can use that phrase—and you should give people some allowances as to what is being foreshadowed here because business can be tough. You need to frame your operations in a way that meet your obligations to creditors, employees and investors, and do it in a way that means that you are behaving just like every other business in the country. I certainly understand the point that would be made through that.

If this does provide some ability, particularly in terms of safe harbours, for people to stay on board and for that expertise to be retained within a company so that, in the case that I am putting forward for the consideration of the House, that start-up is able to survive through a difficult patch and then ultimately go on and become one of our biggest and best firms not just on the Australian scene but on the world stage, as many start-ups have in this country, then it is worth considering. We have flagged to the government that we do not stand in an obstructionist way before this bill. I think the concerns that have been raised, particularly around phoenixing, are legitimate concerns. We would hope that these could be teased out through the mechanisms that have been advanced by the opposition, primarily through a Senate inquiry process, and we look forward to seeing the outcome of that. But I did want to offer some remarks in this debate on some of the concerns that might exist, particularly for small enterprises and Australia's start-up community.

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