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Opinion

It’s time for the Albanese government to stand and deliver for Australia’s startup sector

- May 15, 2024 3 MIN READ
Sydney, seagulls, lockdown
Not actual lobby groups seeking more government funding. Photo: AdobeStock
The federal budget is 26 million seagulls (us) arguing over a $630 million chip.

And the treasurer, currently Jim Chalmers, has to play parent and decide who gets pocket money, while also knowing that when we shout “you’re not my real dad”, we can really mean it every three years.

As the editor of Startup Daily, I see my role as not just covering, but also advocating and representing the startup and tech sectors.

In the 5 years I’ve had that privilege, I watched the federal minister responsible change almost as often as we used to change prime ministers.

Ed Husic is now the 2nd longest incumbent in that role (after Karen Andrews) since 2011. But the widespread jubilation I witnessed as someone who “got it” when he became minister is far more muted now.

Two years on, the question is does the rest of the government get it?

At a time of enormous transition for the startup sector, we’re still mired in review, rather than do, at the federal level. In NSW, it’s been something of a perfect storm the state Labor government in a similar mindset.

Support for startups in the 2024 federal budget is more incidental than by design.

It’s beyond disappointing. And the anger and disappointment is palpable in the sector.

There’s only one mention of startups in Budget Paper No. 2 – $4.8 million over 4 years for two ‘Landing Pads’ via Austrade in Jakarta and Ho Chi Minh City for Australian tech to expand in the region. It’s so niche, and modest, it seems more like geopolitical strategy than sector support.

A big picture

This is a government with a Big Picture mindset.

And that’s great if you’re a billionaire like Fortescue’s Andrew Forrest, looking to transition to green hydrogen after making his fortune from iron ore. There’s a record $7.1 billion for the Australian Renewable Energy Agency (ARENA) for net zero transition.

And Twiggy’s salivating at a $2 per kilo tax credit for green hydrogen production, once again winning big on government subsidies.

Here’s hoping it’s also a big win for smaller startups in the space, such as electrolyser maker Hysata, which banked a $172m Series B last week.

Then there’s the government’s hero project, the Future Made in Australia Innovation Fund, scoring $1.7 billion, but it has a specific nice and keep in mind that even after it had its wings clipped in the Victorian budget last week, that figure is roughly the same size as Breakthrough Victoria’s deep tech commercialisation fund. And at least the state gave $40 million to LaunchVic to do its thing.

There’s not a lot in the budget for small business more broadly. Sure point to the extension of the $20,000 instant asset write off for companies with an annual turnover of less than $10 million. But it only works as an immediate tax deduction for asset purchases if you’re profitable – a skill few early-stage startups have mastered.

Cozzie livs

There’s a $325 rebate on energy bills for small business, part of a $3.5 billion package over 3 years that also gives households a $300 rebate from next financial year in the hope that costing of living pains won’t translate into ballot box pain for the government next year.

You could include $288 million to accelerate the roll out of a national Digital ID, including $23.4m for a digital wallet pilot and verifiable credentials, too, but that’s a benefit for all 26 million of us.

The National AI Centre is getting a tweak and advisory body, with $21.6 million allocated towards the task.

And then there’s $466.4 million in equity and loans for US-based PsiQuantum to hoist its flag in Brisbane, around half of the $940 million funding announcement last month. That includes loan “estimated to exceed $200 million at 30 June 2024” but the actual figure is hidden as commercial-in-confidence. The mystery around this deal is a burr in the saddle for many in the local quantum industry, who had hoped that federal taxpayer largesse would trickle down there way too. But no.

The only new funding for the quantum sector is $27.7 million over 11 years to monitor the $466.4 million spent on PsiQuantum, which sounds like a job for Tony and his team in Utopia’s Nation Building Authority.

This is very much a retail budget with a #cozzielivs hashtag for voters as they head to the polls in the next 12 months to decide if Labor gets a second term.

The government now has a year to convince the startup sector it should give them another go too, because right now, the chips are down.

 

 

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