Turnbull’s innovation agenda has failed dismally

By Leith van Onselen

Back in December 2015, Prime Minister Malcolm Turnbull launched his National Innovation and Science Agenda under much fanfare.

According to Turnbull, this agenda would “invest $1.1 billion to incentivise innovation and entrepreneurship, reward risk taking, and promote science, maths and computing in schools”, and was to include tax concessions and tax breaks for those that engage in start-ups.

On the surface, the plan sounded quite good. However, Turnbull’s actions since launching the agenda have undermined his message.

First, there was the deep funding cuts and job losses inflicted by the Coalition Government on the CSIRO.

Then there is the Turnbull Government’s staunch support of Australia’s negative gearing and the capital gains tax (CGT) discount, thus endorsing the very thing that has held back innovation and entrepreneurship in Australia: too much investment into non-productive housing:

Seriously, who would want to bother with the hardship of taking a risk on a new business when you can instead buy a negatively geared investment property, watch it grow in value, and then sell it for tax effective capital gain?

And which bank is going to lend a start-up funds while there are oodles of “low risk” mortgages to profit from that require minimal capital to be held?

Before he sold-out to the property lobby, Malcolm Turnbull agreed that Australia’s housing tax settings were holding the economy back. In 2005, Turnbull decried Australia’s “very generous” negative gearing and capital gains tax (CGT) concessions which he described as a “sheltering tax haven” that is “skewing national investment away from wealth-creating pursuits, towards housing”.

Then in September, we received more evidence that Prime Minister Turnbull does not actually care about innovation with news that R&D tax concessions would be cut by 1.5 percentage points for the first $100 million of eligible spending after the Government struck a deal with Labor.

Now, it has been revealed that Australia has tumbled even further the Global Innovation Index, falling four places to 23rd spot:

Cornell University, the United Nations’ World Intellectual Property Organisation, and Insead released their annual Global Innovation Index report on Thursday. Its rankings are based on an analysis of a country’s “inputs” into the innovation sector – such as “institutions, human capital and research, infrastructure, market sophistication and business sophistication” — and “outputs” from the startup industry, measured on knowledge and technology and creative metrics…

“This report is another call to arms around innovation,” said Tech Sydney chief Dean McEvoy.

“The Australian government’s recent focus on commercialising IP out of bodies such as CSIRO has been a positive move. [But] clearly it’s not enough. We need to develop a model which co-exists alongside the CSIRO style model and offers similar support for the more market-led, high growth tech startups.”

When launching his innovation agenda, Prime Minister Turnbull stressed the importance of Australia becoming an innovative country – in order to transition to a value-adding, knowledge-based economy and drive jobs growth. However, it appears that both policy and progress have gone backwards over the past 18 months.

Like Tony Abbott before him, Malcolm Turnbull is concerned more about slogans and maintaining appearances over genuine policy action.

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