By Jason Wyatt, Managing Director Marketplacer
Like most Australians, I tuned into Treasurer Scott Morrison’s federal budget speech and read a fair bit of the coverage about the budget.
From a business person’s perspective it wasn’t a bad budget. It had company tax cuts, which is encouraging, but they only really affect profitable businesses. The reality is many in the retail and small business world make marginal profits and therefore the impact is minimal.
The announcement that all company tax rates would be progressively lowered to 25% by 2027 was also positive for business. But that’s a while off.
Economist Saul Eslake summed up the budget well: “By the standards of previous pre-election budgets, this was a sober, responsible effort on the part of the government.”
But from the perspective of someone who is passionate about the potential for this country’s people to achieve great things in the tech sector, I was left feeling a little flat.
I would have liked to see the government promote a more innovative state of mind so our nation could invent sustainable and profitable products and services for generations to come.
I would have liked to see some more concrete support for the startup sector. Investment into the technology sector is an obvious choice. Why can’t Melbourne (OK, or Sydney) be the next Silicon Valley?
We have some of the best universities, brightest minds and sharpest business people in the world in this country. Are we properly harnessing all this potential? Not really.
I would have liked to see more support for an Australian economy looking to shift from its traditional sources of revenue to new streams of income. An Australian economy that’s ready to back itself and go online and global. An Australian economy that’s not just exporting raw materials to China, but has tech companies that can compete with 21st century giants like Google, Apple and Alibaba.
A bold, confident government would see how Australians could create this.
Not surprisingly, I wasn’t alone in feeling I had seen all this before, that politicians enjoy saying the word “innovation” but aren’t especially sure what it all means.
Professor Mark Dodgson, writing for The Conversation, echoed some of my thoughts:
The message has been the same for more than 20 years: innovation is important and Australia needs to lift its game and become more innovative. We really have to find out why we continually revisit the same issues around innovation as if for the first time, and then do so little about them.
He then lists the various innovation statements and promises from governments over the past few decades, from Kevin Rudd’s ‘Powering Ideas’, through John Howard’s ‘Backing Australia’s Ability’ and back to Paul Keating’s ‘Innovation Statement’ from 1995.
Wow, that’s 21 years of disappointments and missed opportunities. Hooray for us
Reporting on the budget, the Australian Financial Review also noted the popularity of the word “startup”, which has become a sort of code word for innovation: “The word ‘startup’ got more mentions in the 2016 Budget speech than it ever has before, but entrepreneurs and their investors say there was little in the package they had not heard before.”
In the same AFR article, the chief executive of entrepreneur lobby start-upAUS, Alex McCauley, fairly points out some of the good things the Turnbull government has done in respect to helping grow entrepreneurialism: angel investor tax breaks, expansion of capital gains tax-free early stage venture capital limited partnerships, and the extension of crowd-sourced equity funding opportunities to retail investors.
But he also points to the seeming confusion the government displays when it comes to distinguishing between the old and new economy.
“The government is making much of its support for Australia’s transition to a ‘new economy’. But ‘new economy’ spending in this budget has taken the form of billions of dollars spent on old economy industries, like ship-building and traditional rail, and untargeted business tax cuts. Research and development barely features,” McCauley said.
If the track record of Australian governments has taught entrepreneurs anything it is that we shouldn’t hold our breath for anything too innovative. Malcolm Turnbull came out with his innovation guns blazing when he took over the top job, and we all thought things might be looking up here. Who knows, he might still surprise us if he wins the election.
I’m passionate about this because I work with some amazingly talented people at Marketplacer and I do business with people who are as smart and as talented as anywhere else in the world.
We’re doing OK in this country. I just think we could do a hell of a lot better than just OK.