David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Industry, Innovation and Science. Will the minister inform the House how the government's National Innovation and Science Agenda will encourage angel investment in start-up businesses as we transition to a new economy? Why is this important for jobs and growth?

Christopher Pyne (Sturt, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

I thank the member for Banks for his question. In 2013 PwC published a report that estimated that start-ups have the potential to contribute $109 billion to our economy and 540,000 jobs between now and 2033. The National Innovation and Science Agenda that the Prime Minister and I launched last December is going to help make that happen.

One of the most important features of the National Innovation and Science Agenda is driving the capacity for start-ups to attract capital. The first theme of the National Innovation and Science Agenda is 'culture and capital'. We want to make it easy in Australia for start-up businesses to attract angel investors. That is why one of the most important measures are the tax changes around income tax and capital gains tax for angel investors in start-up businesses.

In that period after the initial start of a business sometimes businesses enter the so-called valley of death. For example, Atlassian, one of our most successful start-ups, started on two credit cards while being run by its two founders. Then they entered a period where they did not have angel investors supporting them. So what the National Innovation and Science Agenda is going to do in that period is encourage angel investors to invest in start-ups. We are going to provide a 20 per cent offset on investments up to $200,000 in any particular year. We are also going to provide a capital gains tax exemption for 10 years for assets held for more than three years in start-ups. This will really turbocharge the investments from angel investors in start-up businesses.

In fact, I was recently at Flinders University with the member for Boothby and the new candidate for Boothby, Nicolle Flint, to see the part of that university that is encouraging research commercialisation. They explained to us that they intended to bring forward the launch of their digital technology company, unIPartners, to July-August this year because of the government's commitment to innovation in the National Innovation and Science Agenda and because of the changes to taxation for angel investors around capital gains tax and income tax. This is based on the UK's seed enterprise model, but one of the most well-known stockbrokers in London, a man called Michael Meade from Numis stockbrokers, said that, 'Australia now has an innovation competitive advantage,' referring to the tax changes. For years, Britain has been ahead of us in this area on innovation. Now Australia has leapfrogged Great Britain, which means we will attract more investment, which will create jobs and growth in the economy, because we are getting on with the issues that the Australian public care about.