Funding for Start-ups and innovation has changed, find out more below
Research & Development Grants
The government has made a decision to decrease the $2.2 billion research and development ("R&D") tax offset, deemed a key competitive advantage to doing business in Australia, from 45 per cent to 43.5 per cent from July 1 this year. The R&D grant is accessed by many early stage technology companies incuring up front R&D spend to get their business off the ground.
The reduction would save $550 million in payments over four years.
Changes to start up funding
In addition to cuts in Research and Development Grants, the government will also cut eight key funding programs from 1 January 2015 for technology start-ups, including Commercialisation Australia Grants, Enterprise Connect Grants, and the Innovation Investment Fund. These grants currently provided key support and education to technology start-ups, a vital life line for businesses in their early stages of engineering innovative ideas. As an example, over $213m in funding has been provided by Commercialisation Australia in 503 companies since its inception, which will now no longer be available to start-up businesses.
Replacing these programs will be the formation of a new body to deliver a new Entrepreneurs’ Infrastructure Program. It is unclear the specific benefits to be provided to businesses through this body, but the Government announced that it will focus on combining small business and research to assist in commercialising ideas. It will also provide businesses with key management advice and business skills with a focus on supporting job creation and that it would hope to remove red tape and regulatory obstacles for technology start-ups through this new body, supplying $484.2 million in funding over five years.
Employee Share Schemes
In a bid to avoid confusing other policy introductions, the government did not make any official changes to Employee Share Schemes.
It is understood the government is in favour of revoking Labor's 2009 changes which were intended to stop executives minimising their tax but instead triggered an almost overnight collapse of employee share schemes in Australia.
The new regime is now tipped to form part of the governments national industry investment and competitiveness agenda, due for release in the middle of the year.
Employee share schemes are promoted as encouraging start-ups, small businesses and technology companies.
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