What does Budget 2017 mean for deep technology startups?
Article by Petra Andren, CEO Cicada Innovations.
After Budget 2016’s heavy emphasis on innovation, it came as somewhat of a shock that the word was barely uttered in relation to Budget 2017. Were we really just the flavour of the day last year, to be forgotten this year?
With Budget 2017 largely focused on the popular areas of infrastructure and housing, it’s hard not to label it an election budget. These types of budgets are designed to garner popular support, and can do so at the expense of affecting any meaningful economic change.
But it may not all be doom and gloom for innovation in Budget 2017. Below are my thoughts on the topic.
Innovation wasn’t forgotten entirely.
Several positive initiatives that were proposed include additional funds for cybersecurity, $100 million for advanced manufacturing, an extension of crowd-sourced equity funding to also include proprietary companies, and further support to leverage Australia’s skills in fintech around banking.
A small drop in the water perhaps, but something nonetheless. And on the topic of innovation being largely neglected – this might actually be a positive in itself also.
When it comes to policy that affects the deep technology ecosystem, the best thing the government could possibly do is to set and forget.
Leaving alone the R&D Tax Incentive Scheme, and the National Innovation & Science Agenda (NISA), could provide the much-needed legislative certainty to the capital-intensive, longer-term deep technology ecosystem requires to thrive.
So, in this sense, no news may actually be good news for the ecosystem.
And though the government will eventually need to respond to the review into the R&D Tax Scheme – such as calls to increase the frequency of allowable claims and to introduce a $2 million cap on annual cash refunds for smaller companies – leaving sleeping dogs lie for the time being may be the best course of action.
There were, however, some deeply negative proposals within Budget 2017.
Cuts to funding of universities along with fee hikes – which will specifically affect the top four research-intensive universities the most – are absolutely devastating for students wishing to undertake the more expensive and longer STEM degrees.
Combined with 457 visa restrictions, this will make it that much harder for Australian deep tech companies to attract and retain talent – the exact companies that could create the industries and jobs of the future if they were given more support to thrive.
Cicada Innovations will continue to lobby the government on this and other issues affecting our startups.