Aaron Violi (Casey, Liberal Party) Share this | Hansard source

Growing our economy and encouraging the development of new business is at the heart of the coalition's vision for Australia. I was fortunate in my time prior to this role to spend over 15 years working in and with small business and seeing the innovation, the new products and the new markets that they develop and to spend the last three years working in the tech sector, which is very much at the heart of startups and entrepreneurial culture here in Australia. I had the fortune last Friday to attend a breakfast with the tech council and speak to many startup founders and to Ant from Bloc, now owned by Afterpay. He was there, and that's a great example of the startup culture that we have in Australia. It's very strong.

Education is important, absolutely, and I'll talk to that, but many startups know that the best experience is on the job, getting in there and learning, particularly during that early phase. It's so important that we have a strong economy that allows those startups to flourish, because startups and entrepreneurial culture are key to our future economic growth. That's why the coalition, when in government, delivered a number of major investments to support entrepreneurs and help universities to commercialise their research, which I'll get to.

This bill amends the Higher Education Support Act 2003 and is designed to assist students to enrol and participate in tertiary courses that develop and commercialise their entrepreneurial and startup ideas. The bill creates a new category of income-contingent loans, SY-HELP, under the Higher Education Loan Program. The bill includes amendments to various social security acts so that students who are participating in accelerator program courses who are entitled to SY-HELP assistance can potentially qualify for student social security payments. In addition to measures related to SY-HELP loans, other measures included in the bill are amendments to the Australian Research Council Act 2001 to update funding caps for approved research programs and amendments to HESA. SY-HELP funding up to the amount of $11,800 will be provided to students in relation to the course fee of a higher-education based accelerator program. Eligible students can receive a maximum of two separate loans over their lifetime to fully recover the costs of their participation in accelerator programs. The scheme is scheduled to commence on 1 July 2023 and is capped at 2,000 places. However, the government plans to commence with a pseudo pilot of 1,000 places, for which universities will effectively bid.

Universities have raised concerns that the funds available are unlikely to fund a full year's course, and the value proposition for higher-education institutions is also unclear. A wide range of issues have been raised by various key stakeholders. The bill does not provide certainty as to how the loan funds will flow, including whether students will be able to access any of the funding as startup capital. Only courses of a minimum of six months are funded, which may not be in the best interests of either the students or higher education institutions. And given the barriers to commencing a new accelerator or incubator program, students attending regional and smaller universities which do not have access to an existing accelerator or incubator program may be disadvantaged.

There is insufficient clarity as to whether students will be able to retain their intellectual property rights in relation to the work funded through SY-HELP. Between September and November 2022, the government conducted a consultation on the Startup Year program, releasing a consultation paper. Concerningly, the government has declined to make public both the submissions made to the Department of Education as part of the consultation and a survey of students and recent graduates conducted by the department. Surely the government has an obligation to be transparent on legislation it proposes to pass.

The coalition has received some submissions independently, and some of the feedback was concerning. Universities Australia recommended that an expert working group be established to provide advice to government about the purpose, value proposition and funding arrangements, including the flow of funds and implementation issues such as accreditation and legislative requirements, but this was disregarded. The Australian Technology Network of Universities suggested, among other things, that funding be given directly to students and not to universities. It also raised concerns that student costs may be a barrier to participation. And the Regional Universities Network expressed concern about the value proposition for both students and regional institutions. It supported the option to commence with a pilot but asked that more than one regionally based accelerator be included.

As a number of university peak bodies have submitted, the Startup Year demands an evidence based pilot program to test the best to design and deliver the SY-HELP loan scheme. Rather than conduct a proper pilot, the government is planning a type of auction where universities are encouraged to bid for an initial thousand places, which will be made available from 1 July 2023. The government needs to explain how it will test the efficacy and effectiveness of the Startup program, how the government will ensure value for money and that the scheme delivers for young entrepreneurs. This is a really important question, because, as I said at the start, I've spent time in the tech sector and the startup world and it's fair to say that, while there are a lot of people that are highly educated and they do value higher education, they also value practical experience. What we don't want to create are debt traps for young Australians who do an accelerator program that isn't fit for purpose, isn't respected by the industry or doesn't help them get into a job, because all we're doing then is making the future economic prospects of these young Australians even harder. It's so important that this program is respected by the industry, by entrepreneurs and by tech startups and it delivers value for money for the Australian taxpayer but importantly delivers value for money for those young Australians who take the opportunity to participate in this program, because tech startups don't need a piece of paper to give you an opportunity.

Although, as I've said, encouraging the development of new business is at the heart of the coalition vision, it is also prudent to consider that 97 per cent of startups exit or fail to grow and that the stakes are high. So where are the incentives for higher education institutions to partner with industry or angel investors and to develop pathways to employment? While it is expected that universities will continue to deliver innovative accelerator and incubator courses, the Startup Year program is a missed opportunity to provide greater incentives for partnerships between higher education institutions and industries that will deliver real outcomes for students.

The coalition has a strong track record of backing our young entrepreneurs and innovators. In 2014, the coalition government introduced the $400 million Entrepreneurs Program which funded the commercialisation of good ideas, boosting jobs, lifting the capacity of small business and providing access to experienced private-sector providers and researchers. This program was comprised of many elements, including accelerating commercialisation, which helps small and medium businesses, entrepreneurs and researchers to commercialise novel products, services and processes. It also includes the business growth grants to provide access to a national network of experienced business advisers and facilitators to assist businesses to improve business practices, become more competitive, and take advantage of growth and collaboration opportunities in order to increase access to domestic and international markets. It also has the Incubator Support program to assist new and existing incubators to improve the prospects of Australian startups achieving commercial success in international markets through helping them to develop their business capabilities.

Innovation connections was also part of this program. Experienced innovation facilitators would work with business to identify knowledge gaps that are preventing business growth. The outcome is an innovation facilitation report. There is also the Strengthening Business program to connect businesses with specialists to help strengthen resiliency and to help future proof the business. But guess what? They don't like to talk about this on the other side, but the Albanese Labor government cut $197 million from this program over four years in the October 2022 budget. According to Parliamentary Library research, this represents about 75 per cent of the EIP's funding.

When in government, the coalition also proposed a $2.2 billion university research commercialisation package, which we are pleased to report has been adopted by the government. Our commitments included $243 million for the Trailblazer Universities Program to boost research and development, and to drive commercialisation outcomes with industry partners. There is also $150 million capital injection to expand the CSIRO Main Sequence ventures program, which backs startup companies. There is $296 million for 1,800 industry PhDs and over 800 new fellowships, the creation of a new IP framework for universities to support greater university-industry collaboration and the uptake of research outputs. And, of course, there is $1.6 billion over 10 years for Australia's Economic Accelerator, a new staged gate competitive funding program to help university projects bridge the so-called valley of death on the road to commercialisation.

We hear often from those opposite that supposedly nothing happened for 10 years. While words are cheap, the facts matter, and these are the facts about what the former coalition government delivered in this space. Regrettably, while perhaps well-intentioned, there is much wrong with this bill, reflecting the government's failure to again get the detail right and made worse because the government is now trying to keep secret its consultation and the wide ranging concerns raised by key stakeholders. There is no guarantee of success with a startup or, importantly, a startup loan. Unlike angel investors or large companies, students don't have deep pockets, and we need to make sure that we are avoiding a situation where we are setting young people up for failure and for debt traps. I fear that the failure of this bill, or the issues with this bill, could set young people up for those debt traps.

While we on this side won't stand in the way of giving the bill a second reading, our second reading amendment makes it clear to all Australians our concerns about the purpose, design, value and risk to students posed by this bill. We hope and trust that a Senate inquiry will give key stakeholders a proper opportunity to be heard and the Senate an important opportunity to scrutinise this bill to ascertain whether the Startup Year program is in the best interests of students, the higher education sector and industry. The cost to individuals is too high to allow the government to get a headline and play politics and spin that they are investing in startups. The cost to individuals is high, so we need to make sure this legislation is effective and will work because there are young Australians who will get caught in a debt trap if we get this legislation wrong, so I urge that it moves to Senate inquiry to understand these issues in more detail.

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