Labor accuses the government of “innovation by imitation” as community says new startup funding still isn’t enough

Ed Husic

The opposition has accused the government of “innovation by imitation” after Malcolm Turnbull announced a further $15 million in funding for Australian incubators and accelerators on Tuesday.

The funding is on top of $8 million committed in last year’s $1 billion innovation statement, but shadow parliamentary secretary assisting with startups Ed Husic says this is a “screenshot” of a policy Labor announced last year.

“The Turnbull government finally recognised the importance of investing in regional innovation and did so by mirroring longstanding Labor policy to help regional startups,” Husic says.

“Today’s catch-up by the Liberals shows how out of touch they are by failing to genuinely commit early on to include regional Australia in the national innovation effort.”

Labor committed $16 million in funding to establish up to 20 new incubators and accelerators in regional areas across three years at the end of 2015.

While Labor’s incubator support program targets regional Australia specifically, Turnbull says the government’s own funding is aimed at increasing the number of accelerators, supporting existing programs, attracting experts-in-residence and offering up to $500,000 in matched funding across all of the Australia.

Husic points to the gap in funding between what is being pledged towards incubators and the government’s $28 million “ideas boom” advertising campaign.

“This mismatch was a slap in the face to regional Australia,” he says.

“He forgot to put a zero at the end”

Members of the Australian startup community have also criticised both sides of politics for not going far enough with funding in this area, with PoweredLocal co-founder Michael Jankie saying Turnbull’s added funding “won’t go very far”.

“It will provide a little assistance to a few selected ideas,” Jankie says.

“It looks like [Turnbull] forgot a zero or two from the end of that number and should be suggesting this is an annual amount.

“Perhaps he should take some learnings from his career and do what the angels are doing and put similar amounts of up to $500,000 into a far broader spread of companies and ideas and not just ones already being preyed on by VCs and incubators.”

Brosa co-founder Ivan Lim says the government should also be contributing more than just funding to these organisations and could be offering up APIs and datasets from its public agencies.

“While I applaud the additional funding that the government announced today, they need to provide more than just money,” Lim says.

“If both political parties want to truly support innovation there are additional ways than just more money.”

Turnbull’s funding pledge marked one of the first significant innovation policy announcements of the campaign, and StartupAUS CEO Alex McCauley says both parties need to lift their game.

“The election campaign has been notable for its absence of policy in this space,” McCauley says.

“If we want to build a thriving tech startup sector in Australia we’ll need more of these sorts of practical policy commitments as well as some ambitious, big picture thinking.”

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Denham Sadler is the editor of StartupSmart. He was previously a journalist at the publication and has worked as a freelancer for the Guardian, the Saturday Paper and the ABC. In his spare time he likes puns and jaffles.
  • Eamon Byrne

    Can you do an impartial comparison between the 2 partys’ policies please. Many stakeholders are unclear.

    Libs seem to be offering $23m total for startups in their Incubator Support Program. Plus 20% tax concessions up to total of $1m investment. Labor seems to be offering $500m in their Smart Investment Fund by partnering 50% with private investors, plus 50% tax concession up to $200k per yr, plus no CGT on capital gains if equity held beyond 3 yrs. There’s lots of other minor stuff as well.

    The Libs policies seem a little unspecific. They seem to be mixed in with their broader Innovation program. But their claims have to be assessed in the context of their inferior NBN model.

    You would do the sector a big favour in doing an impartial analysis, as this is very important.

  • Daniel Mumby

    The successes of Apple, Facebook, Google & Amazon etc. created ‘000’s of millionaires and new founders, kick-started an entire industry – a ‘gold rush’.
    But we haven’t capitalized on the unlocking of value here in the same way.

    So before criticizing government policy, it’s important to understand the order in which the factors of success matter.
     In any gold rush, 5 elements are required in the correct order for success. Miss one & it dies.
    ‘Miners’ – Aspiring entrepreneurs
    2. Labour – the people willing to support ‘miners’
    3. Tools –‘Picks & Shovels’ – the support, services & mentoring, accelerators, seed-funding
    4. Regulation – must support access, rights & capital
    5. Capital – The injection of funds required to support growth, upstream & downstream services, logistics, and distribution
    Capital is risk adverse, and will only come when the signals of the other 4 are in place.
    One comment in the article mistakenly identifies the seed money as needing to go to startups. But picking winners is not the job of governments- their job is as an enabler (or disabler). Which is why seed capital must go to supporting access, rights & capital, not being an attempt to provide the capital itself.
    Studying a little history gets you a much better perspective.

    • Athula Bogoda

      +1. Well said Daniel.