Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Small Business and Assistant Treasurer. Will the minister update the House on action the government is taking to boost Australian businesses through new ways to access finance, including crowd sourced equity funding?

Kelly O'Dwyer (Higgins, Liberal Party, Minister for Small Business) Share this | Link to this | Hansard source

I thank the member for Braddon for his question. He understands that capital is the lifeblood of small business and that many small businesses rely on credit cards, friends or dipping into their mortgage to either start or grow their business. Small business is one of the very key drivers in our economy—of jobs, of growth and of our national prosperity. We need to make it easier for small business, start-ups, to access capital, to access the funding that they need to innovate and grow. If we want them to innovate, we have to be prepared to innovate ourselves. That is why we announced a world leading crowd sourced equity funding framework, which is a key part of our national innovation and science agenda. Our crowd sourced equity funding platform connects small business for the first time with mum and dad investors who are looking to invest—in that start-up in Sydney, in that new innovative tech start-up or in that micro-brewery that is looking to start up or expand in Tasmania.

Our framework, which is the first of its kind in Australia, enables public companies with less than $5 million in assets and less than $5 million in annual turnover to raise up to $5 million in funds in any 12-month period. We are giving these unlisted public companies a holiday for up to five years from some reporting and governance requirements that have rendered these crowd sourced equity funding provisions prohibitive up until this point. Now these companies will only be required to provide a low level of disclosure in their public offer information and AGMs will not be required. Mum and dad investors will be able to invest an unlimited amount in this crowd sourced equity funding. But there will be protections. There will be a cap of $10,000 per issuer in any 12-month period so that they are not exposed to excessive risks.

Australia's crowd sourced equity funding platform is globally competitive, with the issuer cap of $5 million each year being higher than that of the US and New Zealand. We are receiving strong support for our framework. Let me give you a few examples. The founder of OzCrowd, Nick Karolidis, said: 'We do see the regime as a great starting point and it will benefit many Australian businesses. The proposed regime does well to balance the interests of providing an alternative financing option for new businesses and also protecting mum and dad investors.' The Chief Executive of CPA, Alex Malley, said that 'this is a new way of linking entrepreneurs and their ideas with global investors' and that 'there are in fact appropriate investor protections which the government has sought to address'. (Time expired)