Hockey vows boost to start-ups. But inconsistencies remain

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By Leith van Onselen

Tony Abbott has given a speech to the Australia-Israel Chamber of Commerce today, whereby he spruiked government efforts to boost start-up companies. From The AFR:

Treasurer Joe Hockey says “one of the main groups of beneficiaries” from this year’s budget will be “innovative small businesses” including start-up companies…

Mr Hockey cited the government’s new industry growth centres, research and development tax breaks, work on crowd funding, and recent changes to encourage the use of employee share schemes, and promised new measures in the budget…

While Hockey’s pledge to boost start-ups and innovation is good to hear, it is a little inconsistent with the Government’s destruction of the renewable energy industry in Australia, which has suffered greatly at the hands of policy uncertainty and the Coalition’s proposed reduction in the Renewable Energy Target (RET) to 27,000GWh, down from the current legislated target of 41,000 GWh.

Its draconian metadata laws and copyright reforms are equally likely to stifle the development of Australia’s internet-based industry, including start-ups.

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The Coalition has also refused to reform negative gearing and has shown reluctance to remove the capital gains tax discount, which have jointly diverted the nation’s capital away from productive investment (including start-ups) into non-productive housing.

In short, much more needs to be done to facilitate business development in Australia.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.