Government Announces New Innovation Funding

21-Feb-2013

The Australian Government’s Industry and Innovation Statement, released last week, contains a number of  legislative measures directly affecting existing SMEs and large enterprises, as well as start-up businesses, engaged in developing new and innovative products and processes.

One cornerstone of the government's policy Statement is the  intention to ‘improve’ access to finance for SMEs through Venture Australia, through a A$378 million financial package, and thus facilitate the growth of new ‘knowledge based and innovation driven’ businesses in Australia, increase industry competitiveness and attract new investment to Australia. Relevantly, a new A$350 million round of the Innovation Investments Fund program (IFF) will be available to stimulate private investment in Australian start-ups, largely in tech-related sectors. Under the IFF, the government licenses private sector fund managers and provides capital to start-up or SME business, up to a specified maximum, which must be matched with capital raised by the fund manager from private sector sources.

A positive aspect is also a proposed change, effective 1 January 2014, which will allow companies with an aggregated turnover of less than A$20 million to claim and receive R&D refundable tax offsets in quarterly instalments throughout a year, rather than annually upon submitting its tax return. This will likely positively impact cash flow, and thus is welcome news in particular for start-ups and SME technology companies with heavy R&D budgets.

For further information, please go to http://aussiejobs.innovation.gov.au/Pages/default.aspx.

By Christian Schieber