The BRW is reporting how Freelancer co-founder, Matt Barrie, has written an email to Communications Minister, Malcolm Turnbull, lamenting the woeful state of Australia’s start-up technology sector, as well as the lack of government support:
“We are at the start of the biggest technology boom in the history of mankind – Australia is completely missing the boat”.
…the Australian venture capital industry is “stillborn” and the government should shift its energy to encouraging ordinary Australians to invest in technology start-ups.
He says Australia is one of the most expensive countries in the world to build a start-up because of wages and rent…
On top of that, he describes a “woeful funding environment”… “This is a national disgrace…[and]… practically means that early stage is a train wreck, and no late-stage investments will ever occur at home”…
Although I am no expert on the technology sector, I agree with the broader sentiments expressed by Barrie.
While the government goes out of its way to encourage housing investment, through such things as negative gearing, it has contradictorily capped deductions for education expenses in a bid to stop taxpayers enjoying “significant private benefits at taxpayers’ expense”, as noted by Paul Wallbank last year:
So the government is going to save $500 million dollars over the next few years by capping legitimate educational expenses on the grounds they were ‘unlimited’.
We could ask why negative gearing continues to be unlimited where taxpayers claiming the expenses of property speculation cost the Federal government eight billion dollars last year.
So Treasurer Wayne Swan says a salaried worker has effectively no limits on claiming losses from property speculation against their taxes but is subject to a ludicrously low limit for claiming education expenses.
This one comparison – between negative gearing and self education expenses – shows the magic pudding fairyland that Australia’s political leaders live in and their cowardice.
What’s bizarre about this policy is that most industries are undergoing major changes and almost every worker will have to reskill a number of times through their careers…
In the real world though, Australia’s economic future will depend on the workforce picking up the skills to operate in rapidly changing times.
That Australia’s politicians and economic policies are focused on encouraging property speculation over skills only guarantees mediocrity.
In a similar vein, we have a banking system that increasingly prefers to lend to housing instead of productive businesses:
And let’s not forget Australia’s ludicrous treatment of shares/options received under an employee share scheme, which effectively creates an upfront tax charge where the value often cannot be realised (or shares sold), effectively discouraging the development of start-up companies in the process.
What Australia’s policy settings effectively say is “forget innovation and speculate on housing instead”, which is obviously detrimental to Australia’s long-run competitiveness and living standards.
