Australia’s Startups Ask for More Federal Funding


veteranstodaymoney.comIt has become common knowledge that Australia’s technology startup sector has the potential to develop into an economic force to be reckoned with. Feeding into the hype, a report published by a major market analyst earlier this year boasted impressive figures for startups: 540,000 new jobs and a contribution to the economy that would amount to 4 per cent of the GDP, all by 2033.

The startup scene in Australia exists within the positive context of a relatively stable economy. It is also being encouraged by the high rates of Internet access in the country, as well as by many innovations aimed at improving profitability for emerging tech companies.

Those that wish to transition to a cloud-based business model, for instance, have been signing on for a virtual office in Sydney, which allows for real-time communication between professionals in remote locations. Although signs of promise have popped up here and there, in the various accelerator and incubator programs run by the government, many in the startup sector feel the government could do far more, in order to help techies, software devs, and all those that work in technology, a better run for their proverbial money.

A recent media story took to the tech entrepreneurs themselves and asked them what they would require to succeed from the new government, given the rapid approach of the federal elections down under. This is what they had to say:

  • Less red tape for the employee share scheme

Many startup managers have been complaining about the lack of feasibility of the employee share schemes (ESS). Former lawmakers wanted to discourage small companies from awarding their staff such benefits, which is why they set tax benchmarks that are nearly impossible to reach. In recent years, however, it has become increasingly apparent that startups would benefit immensely from a clearer, more transparent taxation scheme, which would allow for ESSs. Such benefit schemes would allow startups to hire top staff in their fields of choice, while also simplifying the entire fundraising process that so many companies in this segment of the economy have to struggle with.

  • More funding

Several entrepreneurs decried the lack of funding programs created by state and federal governments, which would allow innovators to turn their ideas into viable, sellable programs and services. One positive example, cited by the co-founder of an incubator based on the Gold Coast, is that of the Budding Entrepreneurs Program, funded by the Brisbane Lord Mayor. This program awards entrepreneurs with solid concepts a $5000 grant, which they can spend on testing and fine tuning their ideas, as to turn them into the best possible market products. A website founder also called for the involvement of superannuation funds in the process of investing into startups. This, of course, would allow startups to offer better salaries and, in turn, hire better skilled workers.

  • Proper education

Some entrepreneurs also criticized the state of Australia’s educational system, when it comes to creating skilled computer engineers. It’s not that they don’t exist, or that the system is insufficiently prepared to educate them and then send them out onto the job market. However, the current climate only seems to be encouraging them to leave Australia, as international graduates return back home and local experts go abroad, to work for better salaries than they would in their native country.

For the time being, from the government’s part, nothing much seems to have come out of this debate. Opposition leader Tony Abbott, for instance, recently announced that he plans to create two million new jobs in Australia and to update the country’s economic model to a ‘five-pillar economy’. Yet, other than pointing to over-expenditure brought on by Labor policies, they have yet to come up with a coherent action plan. The time has probably come for Oz’s politicos to understand that economic improvement can only be brought on by actual strategies.

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