If recent statements from both the government and opposition are any guide, then entrepreneurship may be a key battleground for the next federal election. For example, Australian’s youngest federal Assistant Minister for Innovation Wyatt Roy has flagged an interest in fostering growth in the number of entrepreneurial startups across Australia. He apparently has the backing of the new Prime Minister, Malcolm Turnbull. Roy’s focus, based on his comments so far, appears to be on wooing back to Australia successful entrepreneurs who have moved to California’s Silicon Valley. He has flagged the idea of issuing special visas for people in “innovation industries”, which appear to be largely in the field of software and information technology. Not to be outdone, opposition leader Bill Shorten has announced the idea of offering special visas to attract up to 2,000 entrepreneurs willing to start up new businesses in Australia. In addition, a further 2,000 international students would be granted a further year on their study visas if they can demonstrate they have a “credible startup idea” upon graduation. While I would be the first to welcome a competition between the major political parties over the fostering of more entrepreneurship and innovation, it is important to put these proposals into context and separate the rhetoric from the reality. Is investment in startups good policy? Professor Scott Shane, of Case Western Reserve University, is a notable academic in the field of entrepreneurship. In a 2008 report to the World Economic Forum he famously argued that encouraging more people to become entrepreneurs is bad public policy. Shane’s argument was based on the recognition that the number of new business startups generated is a poor metric. As he states in his paper: Encouraging startups in general is lousy public policy because we have no evidence that people create too few or the wrong businesses in the absence of government intervention, and a lot of evidence that these policies lead people to start marginal businesses that are likely to fail, have little economic impact, and generate little employment. This suggests it is not the number of new business startups that matters but the quality of these businesses. Shane also notes that the investment of money and time in the creation of a new business venture is a worse investment than if these resources were put into the expansion of an average existing business. He also argues that the creation of new jobs among a cohort of new businesses occurs mostly in the first year or so, and that as that same cohort of firms age, more jobs are lost due to companies ceasing to trade than from those that grow. Further, the pay and conditions in most startups is poorer than in established firms. Gazelles versus Muppets Politicians' interest in entrepreneurship and startups is driven by the assumption that such firms will provide jobs and become an engine of growth. This is a belief that is shared by governments around the world. However, the scepticism of Shane is shared by others such as Paul Nightingale and Alex Coad from the University of Sussex. In a 2013 study published in the journal Industrial and Corporate Change, they questioned the assumption that entrepreneurial activity was a major driving force of the economy. Nightingale and Coad’s view was based on the relative paucity of hard evidence validating rhetoric surrounding entrepreneurial startups as the driver of economic growth and job creation. Part of the problem is the lack of reliable data, and the tendency for a handful of highly successful companies to skew the statistics. One of the issues here is that much of the growth and job creation is generated by a very small number of high growth young firms generally referred to as “Gazelles”. Such a business is younger than five years, and has experienced an annual average rate of growth of more than 20% over a consecutive three-year period. Such firms are rare. For example, the OECD suggests that they represent less than 1% of all firms by employment and less than 2% by turnover. If they survive their first three to five years and successfully grow into larger businesses, they contribute significantly to employment and economic growth. They are distinguished from the majority of small to medium firms that choose not to grow, or to grow more modestly. Such firms are dismissed by Nightingale and Coad as “Muppets”. However, unlike the Muppets, the Gazelle firms are also highly risky. This is because the startup phase is relatively easy, but the scale up or growth phase is very difficult. There is no “magic sauce” that can be applied to them to guarantee their success. From a policy perspective trying to build economic and employment growth by seeking to pick winners is fraught with risk. Don’t try to replicate Silicon Valley Roy’s apparent fascination with attracting Silicon Valley entrepreneurs to Australia is also open to challenge. For example, Professor Daniel Isenberg, from Babson College, suggests that government policy should avoid trying to replicate Silicon Valley. The conditions that created that well known hub of entrepreneurial activity are unique to that area. Instead, governments should focus on building on local conditions that favour the “Gazelles” and other high growth firms emerging from existing industries. Many of these are to be found in the low- to mid-tech sectors and, as such, all the attention should not be directed at high-tech or information technology ventures. In 2010 the OECD issued a report on high-growth firms and what governments might do to facilitate them. This report recommended policy to improve the overall conditions for startups and small firms through reforms of competition policy, regulation and infrastructure. It also suggested more development of training and management skills for the people running such firms, as well as making it easier for such companies to access finance and credit. It also highlighted the importance of intellectual property. Finally, there were recommendations for assistance in helping such firms gain access to international markets by plugging into global supply chains, as well as encouraging innovation and entrepreneurial attitudes. Does Australia need more startup activity? In assessing the need for more entrepreneurial startup activity in Australia, it is important to note that it is already very easy to start a new business in this country. According to the World Bank Australia ranks 7th out of 143 nations as the easiest place to startup a business, with New Zealand ranking number one. A study published this year by the Australian Bureau of Statistics and the Department of Industry and Science suggests that Australia already has a high rate of new business creation. However, this has been declining and the rate of employment generated per startup is relatively low compared with other advanced economies. This study points to the significant contribution of a relatively small proportion of “Gazelle” firms to the overall job creation in the economy. Over the time period 2001 to 2013 such firms employed around 15% of the total workforce but contributed about 40% of all new job creation. This research highlights the importance of a small number of high-growth “Gazelles” and that such firms are found not just in high-tech or software, but across all industries. A feature of such firms is that they are innovative and can generate above average levels of profit, which are essential ingredients for successful growth. So Australia doesn’t need more startup activity in total terms. But it does need more startups that are potentially scalable into larger firms. Yet the challenge for policy makers is how to identify the winners. Tim Mazzarol, Winthrop Professor, Entrepreneurship, Innovation, Marketing and Strategy , University of Western Australia This article was originally published on The Conversation. Read the original article.
Opposition Leader Bill Shorten has announced a “second wave” of policies that Labor will be taking to the election with the aim of making Australia a “startup nation”. The $17.8 million policy package includes efforts to encourage young Australians to enter the startup world, visas to entice international entrepreneurs to set up shop here, and ways to bring innovation to government decision-making. Shorten told StartupSmart it’s all about making sure Australia is competitive in the global race to “capture the jobs of the future”. “Over the next two decades if we get our startup policies right, there’s another half a million jobs,” Shorten says. “We’re in a race with the rest of the world for jobs and growth, for quality growth and fairness. “Labor’s plan for securing jobs involves capital, skills, platform infrastructure, collaboration, working with government and culture. “Startups manifest a lot of these things; they’re indices of success if the policies are in the right direction.” Startups have recently been placed at the forefront of Australian politics with new Prime Minister Malcolm Turnbull placing a strong emphasis on innovation and new technologies in both his first acceptance speech and subsequent cabinet reshuffle. The competition to win over the Australian startup community has begun, with Shorten saying the public should looks towards the government’s history with things like the NBN, rather than the startup rhetoric. “The Liberal party can talk about things, but you’ve got to look at their record,” Shorten says. “We’ve been in it for two years.” Shorten announced the raft of new policies at a press conference at Tank Stream Labs in Sydney today. The first wave of Labor policies regarding innovation came in Shorten’s 2015 budget reply, where he focused mostly on STEM education. The policies included emphasis on coding in schools, scholarships for STEM teachers, as well as a $500 million Smart Investment Fund. Shorten says the new host of reforms that Labor will be bringing to next year’s election are all about giving power to entrepreneurial individuals. “I’m a big believer in empowerment,” he says. “Empowered individuals in control of their lives create quality growth and fair communities are the best seed-bed for innovation.” HECS-style loans for young entrepreneurs The flagship reform of the “second wave” is the introduction of income-contingent loans for final year university students or recent graduates looking to establish a startup in an accelerator or incubator. The ‘Startup Year’ involves a HECS-style loan of up to $10,000 for 2000 students or graduates each year, with the aim of encouraging more educated young Australians to move directly into the tech sector. To be eligible for the Startup Year, young entrepreneurs would have to be participating in an “accredited program” such as a university or external accelerator. Recipients would start paying back the loan in instalments once they are earning $54,000 annually. “If you look at the ages of successful startup businesses, it’s when people are testing ideas, they’ve been learning and have a lot of imagination that the system hasn’t beaten out of them yet,” Shorten says. Sebastien Eckersley-Maslin, the CEO of accelerator BlueChilli, says he thinks this is a “good initiative”, but only if the right controls are put in place. “I’m not normally one to advocate for tight controls in this area, but this needs to have strict controls around it,” Eckersley-Maslin says. “It could potentially be exploited.” “The idea of having the funds deployed through registered training or accredited providers is the right way to go about it, or else you’ll just be handing out $10,000 so people can extend their Schoolies.” The risks associated with this scheme are low, Shorten says, with a lot of requirements to be put in place. “That’s where the 43 universities come into being,” he says. “It’s very low risk, with a high reward. “It’s a good investment.” AngelCube founder Adrian Stone says fundamentally he supports this new proposed policy. “It’s definitely innovative thinking, and it’s great that they’re looking at unemployed graduates,” Stone says. “I support it, with a few tweaks.” The $10,000 loan might also be not enough to convince graduates to forgo a stable job in favour of operating a startup, Eckersley-Maslin says. “Entrepreneurs will do it anyway, and $10,000 is unfortunately not enough to make an impact on someone moving across, but it will support people who are doing it,” he says. “It’ll create more bodies and groups that’ll be able to support entrepreneurs and give them somewhere to deploy money. Just like HECS helps higher education bodies, this will help startup-based accelerators and incubators.” Bringing international talent to Australia The reform package also includes two new visa categories aimed at global entrepreneurs and graduating international students. The Startup Entrepreneurial Visa is aimed at 2000 entrepreneurs from around the world looking to set up shop in Australia. Labor says it’ll be targeted at individuals with access to around $200,000 which can then be invested in a startup venture in Australia. The Global Startup Entrepreneurial Visa will go to 2000 international exchange graduates, allowing them to stay in Australia for one year to establish a business. “We’re going to open the doors to 2000 of the brightest people in the world to have the chance to have a visa in Australia and back in their ideas,” Shorten says. “Quite often what happens is when they finish their degree they head back to their home country. We want to encourage some of them to stay in Australia and back in their idea.” Innovation competitions Also included in the package is the creation of an online portal for government agencies to upload challenges for the public to solve. Along the same lines as Challenge.gov in the US, Shortens says the AusGoV Challenge Platform is a 21st century version of something that has taken place since the 18th century. Labor is committing spending $5 million to establish a trial of the platform, which will run competitions between ten to 12 agencies seeking to identify “new approaches to utilising data, technology and analytics to solve their policy and management challenges”. The opposition has also vowed to support pre-commercial collaboration with startups and SMEs by giving them a “food in the door” with procurement tenders. This funding will be at two levels, with the first phase providing a $100,000 grant for research and development and the second giving up to $1 million for proof-of-concept. Overall this reform will cost $5 million. The last part of the package is the establishment of the Innovation Investment Partnership, which aims to bring together VC, superannuation funds and startup stakeholders in one place. “Innovation doesn’t wait for elections” With Malcolm Turnbull leading the government’s new focus on startups and innovation, Labor are striving to differentiate themselves and prove their credentials in this area as it shapes up to be a major battleground at the 2016 federal election. Labor has identified one area where they believe they can land some blows, the NBN. “Malcolm Turnbull has been talking about a digital future but for two years he has been responsible for rolling out the backbone of that digital future – the National Broadband Network,” the Labor policy paper says. “The NBN has been rolling out more slowly than Malcolm Turnbull promised and it will now cost much more than Malcolm Turnbull promised.” Shorten adds that there’ll be more policy announcements in this area to come. “We’ll have more to say about research and more to say about taxation, but these are great ideas,” he says. “By all means let’s have a debate about the best path to the future.” New minister for industry, innovation and science Christopher Pyne issued a press release today criticizing Labor’s new policy announcement. “The Turnbull government wants to encourage ideas for greater innovation and entrepreneurship, but they need to be good ideas,” Pyne says. “Innovation has to be more than a political buzzword; it’s the only option for our economy if we are to maintain our current standard of living. “While Labor appears to have a sudden newfound desire to promote innovation in Australia, a better start would be for them to support the China Free Trade Agreement.” Startup-advocate and Labor MP Ed Husic says he’s willing to work with the other side on these policies if they are, saying “innovation doesn’t wait for elections”. For the Australian startup community, the positive thing seems to be that both the government and the opposition are throwing their full support behind innovation and new technologies, even if hopes for bipartisanship may not eventuate. “Both major parties are increasingly making innovation a key priority area in order to ensure Australia remains competitive and prosperous,” StartupAUS CEO Peter Bradd says. “Startups will benefit from this increased attention, but the economy as a whole will be the real winner.” Eckersley-Maslin agrees. “It’s awesome we have bipartisan support on startups and innovation,” he says. “The future is bright for entrepreneurs in this country, and it needs to be.” Want to grow your business with Instagram? StartupSmart School can help.
Coding has replaced history and geography in Australia’s new digital technologies curriculum which was endorsed by education ministers on Friday. As the Australian reports, it ensures that 21st century computer coding will be taught in primary schools from Year 5, and programming will be taught from Year 7. It’s as part of a slimmed-down national curriculum that was given the tick of approval by Education Minister Christopher Pyne in one of his last acts before being sworn in as Minister for Industry, Innovation and Science later this morning. There’s been a big push for a greater focus on coding and STEM subjects in schools from a primary level, and it seems a good fit with new Prime Minister Malcolm Turnbull’s heavy focus on innovation and preparing for the jobs and economies of the future. The government will be pumping $12 million into four separate STEM initiatives: the development of innovative maths curriculum, the introduction of computer coding, a P-TECH-style school pilot site and the funding of summer schools for STEM students from underrepresented groups. “High quality school STEM education is critically important for Australia’s productivity and economy wellbeing, both now and into the future,” Pyne said in a statement. “We are restoring the focus on STEM subjects in schools and making sure our teachers get more instruction on STEM during initial teacher training.” Opposition Leader Bill Shorten signalled his support for coding in schools earlier this year but then prime minister Tony Abbott was not impressed. “He said that he wants primary school kids to be taught coding so they can get the jobs of the future,” Abbott said. “Does he want to send them all out to work at the age of 11?” Want to grow your business with Instagram? StartupSmart School can help
It sounds compelling, but what does Opposition Leader Bill Shorten actually mean when he says all secondary school pupils should be taught “digital technologies, computer science and coding”? And, equally importantly, why? In his budget reply speech, as part of a focus on science and technology education, he stated that “coding” should be part of Australia’s national curriculum. He doesn’t define precisely what he means by “coding”, but it’s likely the speech was at least partly inspired by the work of code.org, a US-based multi-national computing education programme. Barack Obama participated in one of the organisation’s largest projects, the introductory “Hour of Code” for primary school students, allegedly becoming the first US President to write a computer program in the process. code.org’s lessons introduce basic programming skills in bite-size chunks, in simplified programming environments that make it easy to get small examples working. While a great deal of thought (and not a small amount of time, talent and money) has gone into constructing code.org’s lessons, many of the approaches are not new. Attempts to teach children programming date to the late 1960s with the Logo programming language. One of Logo’s key innovations was “turtle graphics”, in which students learned programming by controlling the movement of a “turtle” that could move forwards or backwards, rotate, or raise and lower a pen to draw as it moved. Hour of Code’s Frozen-based tutorial puts turtle graphics, and MIT’s graphical Scratch programming language, in Disney wrapping. The fact that these approaches are evolutionary rather than revolutionary doesn’t make them bad. We speak from personal experience that learning to code in bite-size chunks can be both instructive and inspirational. This kind of introduction led us on paths that resulted in computing becoming our careers. It’s fun, creative and much more accessible than pop-culture stereotypes about introverted “genius” programmers. By democratising access to such introductory lessons in coding, a broader pool of people may enter the profession, which is a very good thing. It might be coding but is it IT? But this approach to teaching, in focusing on the accessible and the enjoyable, has the unfortunate side effect of misrepresenting much of the work IT professionals really do. To create and work with information technology at a professional level, both computer science and software engineering are essential skills. But they are rarely even hinted at in coding exercises for children, even at secondary level. The core of the discipline of computer science – algorithmics (the topic of a new unit in the Victorian Certificate of Education) – is the science of solving problems by devising and analysing procedures. These procedures can then be turned into computer programs. It is rewarding, but much like its sister discipline mathematics, it’s hard, sometimes tedious and often highly abstract. Similarly, a huge fraction of what IT professionals do falls in the domain of software engineering – the profession focused on building large software systems within the constraints of the real world. Planning, design and management of large development teams are very challenging problems. That said, over the past 50 years we have learned a lot about how not to build large software systems, and have found systematic methods that work far better than unstructured trial and error. Team effort So, while getting some small programs to run might inspire students, the kind of things that can realistically be taught to a broad range of children only help a little as preparation for professional study in IT. In fact, they might be counterproductive. The creative ad-hockery of individuals working alone or in pairs for short periods is not an approach that scales to large systems that actually meet the needs of their stakeholders. For that, you need the analysis that computer science brings and especially the skills and perspective that software engineering teaches. But in our experience as tertiary educators, many students believe that they have come to university to learn how to perform solo ad-hockery in a particularly expert manner. Consequently, they do not take anything that isn’t “programming” seriously until they run headlong into the year-long team projects in their final year of tertiary education. At best, they have a lot of catching up to do. At worst, they don’t learn from the experience and enter the employment market without the skills and attitudes that successful IT professionals exhibit and that switched-on employers expect. Cowboy coders are those who can’t or won’t work in teams and who focus on code to the detriment of actual user needs, and they will find it difficult to compete for jobs. Cowboy coding is hardest to discourage in those students with the most confidence in their own programming abilities, usually students with the most pre-university programming experience. Learning ad-hoc programming without exposure to computer science and software engineering runs the risk of exacerbating the misconceptions behind cowboy coding. What if you don’t want to work in IT? According to a report by the Australian Workforce and Productivity Agency, just 4% of the Australian workforce is employed in information technology roles. The majority of Australians, now and into the future, will not make information technology their career. So what of those who don’t dedicate their lives to IT, what do they get out of a bit of exposure to coding at school? Given the role that computing plays in our lives, there’s a strong argument that participation in our democracy will be enhanced by giving every Australian some knowledge of how computers function. A future attorney-general might not be quite so confused about the meaning of “metadata”, for instance. One potential justification for coding in schools is that an increasing number of professions call for some programming skills. Scientists and engineers of all kinds, financial analysts and managers (among others) will have to either perform programming themselves, or work closely with those who do. Even the relatively technology-phobic journalism profession is conducting a lively internal debate about the value of journalists knowing how to code, both to create interactive content and to support the kind of statistical analysis performed in data journalism (exemplified by the work of Nate Silver, the American statistician who writes about baseball and elections). But it’s important to keep what non-specialists can achieve in perspective. If you want to see the results of amateurs struggling to design, plan and manage large, complex physical construction projects, watch an episode of the TV show The Block. Large software construction projects are difficult for amateurs to pull off for similar reasons. Realistic ambitions The Australian national curriculum already contains a proposed “digital technologies” section, and a revised version is likely to be adopted in the next few years. This curriculum proposes to teach computing with a heavy focus on computer science and software engineering, far beyond the coding mentioned in Shorten’s speech. The proposed curriculum is extremely ambitious. Were it to be taken literally, Year 10 students across the nation would be expected to master abilities and bring a mindset that we struggle to achieve in our graduates, who have a strong interest in the topic and years of specialist training as well as the patience, focus and perspective that adulthood brings. As such, we are extremely sceptical that much of this can actually be effectively taught to the end of mandatory curricula at Year 10 level, let alone earlier in secondary or primary schooling. In practice, we think it likely that students in the compulsory years of schooling will do some experimental, creative small-scale coding in lessons like those provided by code.org, but at best will be told about computer science and software engineering, which has very limited effect. Telling students about these disciplines, even at tertiary level, does not on its own lead to any ability to apply them, or even to recognise when they might be needed. We believe that there is indeed justification for teaching students more about computers in the years of compulsory schooling. But this should be tempered with a clear focus on what we want students to learn, and some realism about what can be achieved in a school setting in compulsory lessons. Otherwise, we not only run the risk of wasting valuable resources, we run the risk of actively harming students' chances of later mastering the full range of skills required of IT professionals. Robert Merkel is Lecturer in Software Engineering at Monash University. Robyn McNamara is Assistant Lecturer in Software Engineering; PhD candidate in Computer Science Education at Monash University. This article was originally published on The Conversation. Read the original article. Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Bill Shorten’s recent announcement that, if elected, a Labor Government would “ensure that computer coding is taught in every primary and secondary school in Australia” has brought attention to an increasing world trend. Estonia introduced coding in primary schools in 2012 and the UK followed suit last year. US-led initiatives such as Code.org and the “Hour of Code”, supported by organisations such as Google and Microsoft, advocate that every school student should have the opportunity to learn computer coding. There is merit in school students learning coding. We live in a digital world where computer programs underlie everything from business, marketing, aviation, science and medicine, to name several disciplines. During a recent presentation at a radio station, one of our hosts said that IT would have been better background for his career in radio than journalism. There is also a strong case to be made that Australia’s future prosperity will depend on delivering advanced services and digital technology, and that programming will be essential to this end. Computer programs and software are known to be a strong driver of productivity improvements in many fields. Being introduced to coding gives students an appreciation of what can be built with technology. We are surrounded by devices controlled by computers. Understanding how they work, and imagining new devices and services, are enhanced by understanding coding. Of course, not everyone taught coding will become a coder or have a career in information technology. Art is taught in schools with no expectation that the students should become artists. Drag and drop A computer program is effectively a means of automating processes. Programs systematically and reliably follow processes and can be used to exhaustively try all the possibilities. The languages used to program computers have evolved in the 70 years we have been building computers. Interfaces and programming environments have become more natural and intuitive. Language features reflect the applications they’re used for. What is needed to easily express a business process, scientific equation, or data analysis technique is not necessarily the same as what is needed to rapidly develop a video game. However, throughout the evolution of programming languages, the fundamental principles have remained the same. Computer programming languages express three essential things: The order in which a sequence of instructions is performed A means of repeating a sequence of instructions a prescribed number of times And tests as to whether or not a sequence of instructions is performed. While personal preference influences which computer language a programmer uses, there is a greater understanding of which languages work well for teaching introductory programming. For example, Scratch is popular for primary school students and is quick to learn. Alice has been used to help students quickly build computer animations. Python is increasingly used for scientific applications. Visual programming languages – where students can drag-and-drop icons rather than type code – allow for rapid development of simple programs. At Swinburne University of Technology we run workshops to introduce school students to program NAO robots. Students use the Choregraphe environment to link robot actions from a library. Students previously unused to programming can develop interesting robot projects in a couple of days. More sophisticated development of the robot requires students to use a more detail-oriented language, such as Python or C++. The simpler options lead to positive student experience. Computational thinking Writing and then executing a program gives immediate feedback as to whether you have correctly expressed instructions for the computer. Ultimately, the understanding of how to express concepts so that a computer can perform tasks accurately and efficiently is far more important than the details of the programming language. Underlying all computer programs are algorithms, which specify in a more abstract way how a task is to be done. Algorithmic thinking – also called computational thinking – underlies computer science, and there has been a growing movement on algorithmic thinking in schools. The new national curriculum reflects algorithmic processes, and materials are being developed to help teachers with the new curriculum. Victoria has recently developed a new subject for the Victorian Certificate of Education (VCE) entitled Algorithmics. There are even materials for teaching algorithmic thinking without computers. The Computer Science Unplugged movement, led by Tim Bell and colleagues at the University of Canterbury, has developed resources that teach students concepts through movement and fun activities. Teaching for the this century Teaching computer coding in schools is very different from initiatives that advocate for computers in the classroom. I was not, and am still not, supportive of compulsory laptop programs in schools. The idea is not necessarily to expose students to the technology itself, which is almost inevitable these days with the wide penetration of mobile phones. Rather, students are exposed to the skills needed to develop computer applications. While IT skill shortages is a contentious topic, there is no doubt that not enough of the best and brightest are studying computer science at university. A significant factor is insufficient exposure to the topic at schools. Teaching coding at schools is aimed at addressing the lack. It might be said that whatever programming language is taught will be obsolete by the time the students enter the workforce. My experience is that, if taught properly, students can rapidly transfer the principles of one language to another. In the 19th and 20th centuries, the challenge was to understand the physical world, and harness force and energy. This understanding percolated into the school curriculum. In the 21st century, the challenge is to understand and harness data, information and knowledge. Computer programming is a necessary way of introducing students to these concepts. Leon Sterling is Pro Vice Chancellor Digital Frontiers at Swinburne University of Technology. This article was originally published on The Conversation. Read the original article.
Teachers will need to have the right training and coding skills will need to be spread across the curriculum if the Labor party’s STEM skills policy is to truly prepare Australia for the local economy’s pivot away from the resources sector. Peter Argent, co-founder of the Coder Factory in Sydney, told StartupSmart the national STEM policy announced in Bill Shorten’s budget reply speech was the “best thing” he has heard out of a politician’s mouth in a long time. However he says it will be important to get the teacher training right in order for the initiative to reach its full potential. “Who’s going to train all these teachers?” he asks. “A lot of teachers want to talk to kids about tech but might not have the competence or knowledge to feel like they can.” Labor has announced it will invest $9 million to establish a National Coding in Schools Centre so that teachers across Australia have the opportunity to develop their skills and coding can be taught in every primary and secondary school by 2020. More than 20,000 scholarships will also be provided to encourage science, technology, engineering and mathematics graduates to continue their studies and become STEM teachers. No detail has been given yet about what programs will be trimmed in order to fund the ambitious policy, or whether funding will simply be deducted from government coffers. Argent says he doesn’t want to see coding become “something extracurricular”. A better approach, he says, would be to tie coding into existing subjects rather than make it a stand-alone area of study. This was a theme echoed in the tech industry’s criticism of the federal government’s review of the Australian curriculum late last year. “Some people think why teach kids coding because not everyone will be a developer,” Argent says. “But it’s not about everyone becoming a computer scientist – it’s about them becoming a doctor or lawyer or accountant or tradie or hairdresser, and if they know about coding that’s where the exciting things happen. Because if you’re a librarian and you have all these systems in place which might not be the best systems… if you know coding you can come up with new ideas.” Argent says learning to code also teaches students skills that are important to any industry or profession such as problem solving. “It’s business-minded,” he says. “That’s the great thing about teaching coding as you’re always facing bugs or challenges and you have to go through trial and error and research online. And when you finally get there you feel great, and that correlates to real life as kids constantly face problems when they grow up.” Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Labor announces $500 million Smart Investment Fund policy, startups welcome move to ease funding crunch5:22AM | Friday, 15 May
The startup community has welcomed Labor’s intention to increase the amount of capital available to startups, but some have questioned whether a proposed $500 million startup investment fund is the right mechanism to achieve that goal. Opposition leader Bill Shorten outlined plans to create a $500 million startup investment fund, in partnership with venture capital firms, in his budget reply speech on Thursday night. “I believe Australia can be the science, start-up and technology capital of our region: attracting the best minds, supporting great institutions and encouraging home our great expats,” Shorten said in the speech. “Labor will create a new, $500 million, Smart Investment Fund, to back-in great Australian ideas like this. “Our Smart Investment Fund, will partner with venture capitalists and fund managers to invest in early-stage and high-potential companies.” Aus has a great pedigree in startups that have bootstrapped: Atlassian, 99Designs, Envato, etc. - but, today, most need VC $ to grow fast — Adrian Stone (@SmallTimeVC) May 15, 2015 Alongside the Smart Investment Fund, Shorten proposes to create another new body called StartUp Finance. “Labor will work with the banks and finance industry to establish a partial guarantee scheme, StartUp Finance, to help more Australians convert their great ideas into good businesses,” he says. “We will enable entrepreneurs to access the capital they need to start and grow their enterprises.” AVCAL chief executive Yasser El-Ansary told StartupSmart the secret to success for a program such as the Smart Investment Fund is a bipartisan commitment and certainty. “The big handbrake on Australian innovation has been that policies have chopped and changed every three years or so. Venture investment is about backing a company for five to 10 years, and changing policies every three years means hitting the reset button. You go back to square one and have to consider a new set of policies and rules,” El-Ansary says. “Innovation policy should be one area everyone agrees on. Everyone agrees we want new jobs, the best employees in Australia and new industries. What’s missing is a bipartisan commitment. “So the opposition leader’s comments are very positive. The next logical step is for the government and opposition to work together, and to work with industry, on a common set of policies and principles. That way, it doesn’t matter if we have a Coalition government or an ALP government, Australia’s innovation policy moves in one direction.” @jrmck @apglo true - & unlikely as "funded" - but hell, it's a bold statement that tech skills investment is needed or Aus is fucked. — Mike Cannon-Brookes (@mcannonbrookes) May 14, 2015 El-Ansary says the Smart Investment Fund appears to be similar to the Innovation Investment Fund, which was introduced early in the term of the Howard government, and scrapped in the 2014 budget by the current government, following the Commission of Audit. He also cites similar program in the US, which have been in place for over 50 years. “The concept is very similar, and there are runs on the board. For example, Seek was created with funding through the IIF. We know programs like that can deliver, but they need to be in place for the long term,” he says. “Behind the recommendation from the Commission of Audit was momentum away from industry handouts, driven by the car industry. In deciding not to support the automotive sector, all industry programs were seen as being the same of working the same way. But that’s incorrect. [The IIF] was more akin to investing in a business than to handing out a blank cheque.” Startup Victoria interim chief executive Scott Handsaker told StartupSmart there are potentially other, better policy options for promoting startup investment. “While I am usually in favour of anything that helps more investment funds get into the hands of early-stage companies, I really think there are better levers for the federal government to pull if they really want to drive economic outcomes and job growth,” Handsaker says. “To fund match up to $500 million into Venture Capital companies will increase the amount of capital available, but in and of itself it’s not a game changer. We would prefer Labor look at instead replicating the tax incentives available to early stage investors in the UK, which have been extremely successful in getting high net worth individuals to put their money into startups. “So encourage more money into companies, but do it at seed stage and do it through encouraging individuals to invest, rather than large VC’s. In my opinion, you will get a far better outcome for Australia.” Looks like the ALP is trying to establish a new base of supporters in the Australian startup ecosystem. A small number but loud voices. — Alfred Lo (@apglo) May 14, 2015 It’s a position echoed by AirTree Ventures partner Craig Blair. “VC fund matching may not be the panacea everyone is expecting,” he says. “Past schemes such as IIF have largely failed to develop a sustainable VC ecosystem and there are encouraging signs that the recent crop of VC funds will get the right support from the private sector for the right reaons i.e delivery a healthy return to investors.” ilab director Bernie Woodcroft says he’s reserving judgement until more details emerge, but says he believes Australia’s startup ecosystem does need policies that make it easier to access investment. “What I would like to see is a differentiation between startup opportunities, and disruptive knowledge opportunities, from small business opportunities, and creating a clear distinction between those. Because that is something that isn’t clear in a lot of the political debate at the moment,” Woodcroft says. “For example, strong investment into new businesses that seek to be disruptive is rarely profitable early on, and so things like tax deductions or write-offs are not really relevant. So what we need to see is things around easier access to investment, as well as investments into an education system that supports STEM jobs.” Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Bill Shorten’s STEM policy wins startup support: “The best thing we’ve heard from either party in 20 years”5:20AM | Friday, 15 May
Labor leader Bill Shorten has unveiled his party’s STEM (science, technology, education and maths) education policy as a key focus of his budget reply speech, with one leading startup investor calling the policy “the best thing we’ve heard from either party in 20 years”. Labor’s Futuresmart policy aims to have coding taught in every Australian every primary and secondary school by 2020. In order to accomplish this, Labor will provide additional training in STEM disciplines to 25,000 existing teachers at a rate of 5000 per year. It will also encourage an additional 25,000 STEM students to become teachers by paying them $5000 to take up a teaching degree, and a further $10,000 after their first year in the classroom. The policy will also write off the HECS debt of 100,000 STEM students, and encourage more women and minorities to study, teach and work in tech-related fields. Other parts of the proposal include investing $9 million in creating a National Coding in Schools centre (NCIS) to support the teaching of coding in schools, and boosting R&D spending to 3% of GDP. Wow. Labour budget reply is amazingly smart. 100k IT scholarships, CS in schools, VC fund matching & 3% of GDP in R&D by 2020?! Incredible. — Mike Cannon-Brookes (@mcannonbrookes) May 14, 2015 “Nothing matters more to Labor than securing the jobs of the future… And the new jobs of the future require new skills. Designing skills, coding skills – building, refining, adapting and servicing the machines and supply chains of a new age,” Shorten said. “Yet today, two out of every five science and maths teachers for years 7 to 10, don’t have a degree in these subjects. “Digital technologies, computer science and coding – the language of computers and technology - should be taught in every primary and ever secondary school in Australia. And a Shorten Labor Government will make this a national priority. “We should aspire, together: universities, industry, the people and the Parliament to devote 3% of our GDP to research and development by the end of the next decade.” 99designs founding investor Leni Mayo says while there’s not enough detail to discuss the specifics of how the plan will be implemented, the policy is “well thought out” overall. “This is the best thing we’ve heard from either party in 20 years. This is a root-and-branch attempt to address the issues inhibiting Australia from tackling the best the world has to offer in terms of technology and innovation,” Mayo says. “At a high level the policy is coherent. More focus on STEM subjects in university and HECS relief are credible mechanisms for getting more trained STEM teachers into our schools,” he says. And I say - hallelujah! https://t.co/UubnOJCO1d — Annie Parker (@annie_parker) May 15, 2015 Startup Victoria interim chief executive and Attendly co-founder Scott Handsaker also backs the STEM proposal. “So many people have been calling for computer coding to be added to the national curriculum over the years that it is amazing to finally hear a politician call for it to be rolled out. The future workplace is going to be so different to what we are used to that it is critical we start preparing our kids for an era powered by technology,” Handsaker says. “The policy of writing off the HECS debts for 100,000 students who complete a degree in a STEM based University course is a fantastic initiative. STEM skills are required for the jobs of the future and we are not producing anywhere near enough qualified students to meet ongoing demand. To then encourage a portion of those graduates to go on and complete a teaching degree is cleverly structured and a super policy. “Big thumbs up from Startup Victoria.” A spokesperson for the Australian Computer Society told StartupSmart coding and computational thinking “are an absolute necessity if we are to give our children the best possible chance to become the leaders of the workforce of the future”. “ACS has long called for mandated teaching of coding and computational thinking,” the spokesperson says. “It is no secret that Australia’s economic future is in the knowledge and service space, so seeing these initiatives brought to the fore is something we strongly support. Schools in the UK are already teaching coding from the age of five, and if Australia does not get on board we will be left behind. “Looking at the UK implementation, the UK Government engaged the British Computer Society and others in the ICT industry to assist in teacher training. We – and the industry more widely – stand ready to assist the Government in the training of teachers and believe that, while this is certainly an ambitious goal, it is an achievable one with the right funding and policy framework and importantly commitment in place. It should be clear though that the training needs to be of a high standard, and cannot simply be seen as a crash course in technology. We need to produce teachers who can be genuinely passionate about technology education, and pass that on to their students. “We believe that the time for talking is past. If we are to give our students the very best shot at being the digital leaders of the future, we need to start a program of coding and computational thinking now. It simply cannot wait until 2017. This represents a great chance for the Government, business and community to come together and build the digital workforce of the future.” Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Australia’s Parliamentary Joint Committee on Intelligence & Security (PJCIS) last week endorsed the data retention bill, which means we’re all suspects now. The Telecommunications (Interception and Access) Amendment (Data Retention) Bill 2014 provides for mandatory retention by internet service providers (ISPs), phone companies and other entities of telecommunications metadata -– data that in aggregate provides a picture of our lives. The data will be accessible by a wide range of law enforcement and other bodies, potentially extending from the Australian Security Intelligence Organisation (ASIO) and the Australian Federal Police (AFP) to your local council, the unrestrained Independent Commission Against Corruption Website (ICAC) and even the RSPCA. Access will be without warrant. The Bill privileges bureaucratic convenience –- and political opportunism or cowardice –- over what is effective and proportionate in the prevention and prosecution of crime. PJCIS endorsement -– presumably to be followed by enactment hot on the heels of the New South Wales state election -– is an epochal event. It comes after a decade in which the Australian Law Council, industry, academics, civil society advocates and concerned individuals have cogently criticised proposals for retention. Each time the Opposition of the day has expressed disquiet and a range of parliamentary committees (as late as 2014) have condemned the particular proposal as going a step too far. This time, it seems, things are different, as the government wraps itself in the flag and the Opposition ensures that it’s seen to be tough on national security. The arguments haven’t changed, but a lone man with a gun in Sydney gained headlines with a terrorist flag. On that basis civil liberties disappear, and will presumably continue to erode. What does the report say? The 362 page report is interesting for what it doesn’t say. It disregards a range of authoritative overseas national security reports, such as this high level report to the White House, demonstrating that retention is ineffective. It also disregards warnings by analysts regarding population-scale data retention: storing data about every communication is an invitation for hacking and misuse. It disregards the very substantial body of law in Europe, where courts have recurrently said that treating everyone as a suspect is profoundly disproportionate to the needs of law enforcement and national security. (Contrary to claims by the AFP, law enforcement in Europe hasn’t collapsed when the courts have accordingly struck down retention law.) The report does note some concerns, albeit particular recommendations can be disregarded or obfuscated by the Government. The PJCIS recommends establishment of data breach reporting –- alerting consumers when their data goes AWOL. Given the history of data breaches involving leading phone companies and other entities such as Sony we might wonder whether breach is inevitable. The government is urged to address business criticisms by making “a substantial contribution to the upfront capital costs” facing ISPs and telcos. The PJCIS urges the government to amend the Explanatory Memorandum to the Bill in order “to make clear that service providers are not required to keep web-browsing histories”. The Australian Securities and Investment Commission (ASIC), Australian Competition and Consumer Commission (ACCC), AFP and a slew of other agencies thus won’t have warrantless access to a record of every mouse-click. The committee also calls for restricted access regarding civil litigation, although questions remain about criminalisation of intellectual property infringements in “the war against piracy”. But who will watch the watchers? The PJCIS notes substantive concerns by the media about freedom of expression. It appears to assume that governments will never misuse powers to track journalists and their sources. We should, it seems, believe our watchers and disregard incidents we hear such as those in NSW where the highest executives of the police force appear to be bugging each other and where ICAC is accused of misusing its powers. The report calls for supervision by the Commonwealth Ombudsman, meaningless unless that body is properly funded. It does not address evisceration of the Office of the Information Commissioner (whose current head is currently working from home after withdrawal of the agency’s funding last year). Presumably we are to trust a watchdog that is toothless and has been very reluctant to bite the hand that under-feeds it. Suspicion and complicity It is easy to blame Attorney-General George Brandis for this over-reaching national security legislation. But we should be looking at ourselves –- as a society -– and at our representatives. The silence of Bill Shorten – who appears to have forgotten that the duty of an Opposition is to oppose – is lamentable. Liberal democracies should be confident about their values, sufficiently confident to accept that dangers -– or purported dangers -– don’t necessitate creeping abandonment of civil liberties. The government currently has strong powers to access metadata and communications content under warrant. Mandatory retention with warrantless access is an unprecedented and unnecessary step deserving robust condemnation by the PJCIS. Failure to do so places the onus on all Australians at the next election. This article was originally published at The Conversation.
Opposition Leader Bill Shorten has expressed his disappointment with the way the Coalition government has politicised the debate surrounding data retention legislation and suggested Labor’s bipartisan support may be withdrawn. Fairfax reports Shorten has sent a strongly-worded letter to Tony Abbott, urging his government to consider a number of concerns relating to the proposed data retention laws – including cost, press freedom and civil liberties. The news follows a report on StartupSmart’s sister website Crikey, which revealed Labor was poised to back the government’s mass surveillance scheme. The proposed legislation would currently require Australian phone and internet companies to store customer data so that intelligence agencies can access it without a warrant. Just Eat acquires Mexican food delivery startup Takeaway ordering and delivery startup Just Eat has announced the acquisition of Mexican ordering service SinDelantal in a bid to strengthen its presence in Latin America. Chief executive of Just Eat, David Buttress, said in a statement the acquisition will secure the startup’s long-term strategy. “We are delighted to be entering the thriving Mexican market, which offers exciting growth opportunities and strengthens our international portfolio,” he said. “An increased stake in IF-JE further supports our commitment to building on our strategy to develop market leading positions and offer more consumers the benefits of a great online takeaway experience with JUST EAT.” Just Eat is operating in 13 counties and in 2013 its revenue grew by 58% to more than $A190 million. Automated graphic design startup raises $1.1 million Automated logo design startup Tailor Brands has raised $US1.1 million ($A1.4m) in seed funding in a bid to scale its business. TechCrunch reports the funding round was led by Disruptive Ventures and various angel investors. The startup aims to help businesses create logos and other branded items quickly and easily by using algorithms and a series of questions instead of hiring a graphic designer. Tailor Brands is operating in 35 countries following its launch last year. Overnight The Dow Jones Industrial Average is up 0.26%, rising 46.97 points to 18,019.35. The Australian dollar is currently trading at 77.75 US cents. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
In his budget reply speech to the National Press Club on Wednesday, shadow treasurer Chris Bowen dedicated significant time to outlining a Labor Party agenda that aims to foster innovation and entrepreneurship, with an emphasis on supporting high growth companies. Calling on Australia to find its own niche and not be a carbon copy of Silicon Valley, he said that high growth companies currently generate less than 0.2% of Australia’s GDP but that it could account for 4% of our GDP, according to PwC, generating more than half a million jobs by as early as 2033. “The potential is huge, but we have a lot of catching up to do,” he said in his speech. “Our venture capital industry starts off a low base and is not growing as fast as that of comparable countries. We do badly when it comes to the important ‘angel funding’, with only one dollar invested for every Australian each year. “In New Zealand, the comparable figure is $6, $15 for the United Kingdom and $85 for the United States.” He said the tax system is one of the most powerful levers a government has to influence investor behaviour. “Other governments around the world, including conservative governments get the importance of a supportive government environment for the high-tech, startup sector, making it more frustrating that our government does not,” Bowen said. “In the land of the free, the United States, every dollar of government money investment in high-tech incubators generates an additional thirty dollars of tax revenue. Perhaps the Treasurer might have thought about this before he engaged in his ridiculously short-sighted cost-cutting regime.” He called for changes to current crowdsourced funding laws and flagged a visa specifically for entrepreneurs as Labor-backed policies that could encourage Australian innovation and startups. “Around the world, it is estimated that crowdsourced funding will generate $65 billion in funding and finance the creation of 270,000 jobs this year,” Bowen said. “There is one small problem, however. Crowdsourced funding is, in effect, illegal in Australia. ASIC regards crowdsourced funding as a financial services undertaking, requiring a licence, making its operation of crowdsourced funding highly problematic.” He said that he and Opposition Leader Bill Shorten had instructed the opposition treasury parliamentary secretary, Ed Husic, who has a passionate interest in the potential of high technology, to consult with the sector to provide a regulatory framework for crowdsourced funding “in the absence of action from the government”. Bowen also mentioned the opposition’s interest in establishing an entrepreneur’s visa, saying that “we should not only encourage Australians to start innovative companies here, but also invite entrepreneurs from around the world to come and create jobs here.” “New Zealand, the United Kingdom, Ireland and Singapore among other nations that have introduced specific entrepreneur visas, and Australia needs to consider doing so as well,” he said. He said it was an idea that he and the opposition spokesman for Immigration, Richard Marles, will be pursuing in consultation with the venture capital sector. Bowen said the two ideas outlined were just the beginning of Labor’s process to foster innovation. “There is more work to do in this space, including policy development in relation to incubators, employee share schemes, building the skills we need, high-tech scholarships and other matters,” he said. “Again, Bill Shorten and I have asked my parliamentary secretary, Ed Husic, to consult the high-tech sector about policy details and work with our colleagues such as Kim Carr and Jason Clare, who both share our passion, to develop more details. And we’ll have more to say on this.” Image credit: Andrew Heslop.
Russian authorities have deemed crypto-currency bitcoin illegal, claiming the virtual currency could be used to finance money laundering or terrorism. “Systems for anonymous payments and cyber currencies that have gained considerable circulation - including the most well-known, bitcoin - are money substitutes and cannot be used by individuals or legal entities,” the Russian Prosecutor General's Office says. “Citizens and legal entities risk being drawn - even unintentionally - into illegal activity, including laundering of money obtained through crime, as well as financing terrorism.” Tony Abbott planning royal commission into union finances Prime Minister Tony Abbott is set to announce a royal commission into union finances this week, which is set to focus on how members’ fees are used. While the royal commission is partly in response to the AWU slush fund affair, it is unlikely to look at the broader issue of trade union corruption. “I think it would be, frankly, irresponsible for the government not to respond to that growing demand in a very thorough way,” Attorney-General George Brandis says. Unsurprisingly, the royal commission has been attacked by the opposition. “The idea that we need to have an expensive multi-million-dollar political royal commission, rather than give those scarce resources to our hardworking police, means the wrong priorities,” Opposition Leader Bill Shorten says. Obama backs Hockey’s calls for IMF reform The US has backed calls by Treasurer Joe Hockey to reform the International Monetary Fund to allow emerging economies to have a greater say in the organisation. “To secure global economic stability into the future, the United States must support IMF reform now,” Hockey says. “Failure to reform means that we risk a shift away from the IMF and the multilateral system towards bilateral or regional approaches and an international financial architecture that's fragmented and misaligned.” Overnight The Dow Jones Industrial Average closed up to 15,794.08 points. The Aussie dollar is down to US89.6 cents.
The ANZ Bank has refunded $70 million to 235,000 home loan customers, with some errors dating as far back as 2003 and leading to the bank to review all its home loan, savings and small business accounts. “Part of our ongoing program of work at the moment is to make sure that all of our accounts are performing in accordance with the terms and conditions documents that are out there,” ANZ’s Australian head, Phil Chronican, says. “When you discover an issue of this nature, you want to be 100% sure that you haven’t got anything else of that nature in your business, so we’ve been reviewing all of our products. “We literally are going through every product, every terms and conditions booklet, and checking the systems against the products against the terms and conditions.” Hockey’s hard line on SPC Ardmona Treasurer Joe Hockey has taken a hard line on any federal government bailouts of struggling food company SPC Ardmona, which is asking for $25 million in assistance. “If we're asking the Australian people to help the government to live within its means, then corporate Australia must also follow," Hockey said. “The parent company of SPC Ardmona, Coca-Cola Amatil, which is an Australian company, in the first six months of this year had a profit of over $215 million, for six months, and yet there is a request for $50 million of taxpayers' money. “I think you can understand why we are being very cautious, very careful about handing out taxpayers' money to companies that are profitable let alone companies that aren't profitable.” Abbott pressures Shorten over ABCC reintroduction Prime Minister Tony Abbott has reiterated calls to reintroduce the Howard government’s Australian Building and Construction Commission (ABCC). In a stinging attack on Labor, Abbott questioned whether opposition leader Bill Shorten supported law-abiding citizens or was “on the side of people with a tendency to break the law”. “Are they [Labor] on the side of getting to the bottom of this or do they want to support a culture of cover-up?” Abbott says. “And this is a very serious question for the Leader of the Opposition and obviously he'll have the chance to answer it to pretty soon.” Overnight The Dow Jones Industrial Average is down to 15,7606.6 points. The Aussie dollar is down to US87.34 cents.
Australia has secured an historic free trade agreement with its fourth-largest trading partner, South Korea, with the Abbott government claiming the deal will grow exports to the nation by 73% over the next 15 years. The deal will see South Korea scrap tariffs on a range of Australian commodities, including wheat, sugar, dairy, wine, horticulture, seafood, resources, energy and manufactured goods. However, it acknowledges that some sectors, including steel, auto manufacturing, steel, textiles, clothing and footwear will face increased competition from Korean businesses. “Independent modelling shows the agreement would be worth $5 billion between 2015 and 2030 and boost the economy by around $650 million annually after 15 years,” Prime Minister Tony Abbott says. “We wish to appreciate the impact upon our budget and our economy, not least of all we want to ensure that Australian jobs are supported and maintained and Australian opportunities are available in the future to make sure our national interest is advanced,” Opposition Leader Bill Shorten says. Qantas warned its debt could be downgraded to junk bond status Moody’s has warned embattled airline Qantas it is considering downgrading its credit rating to junk bond status, with the ratings agency tipping a full-year loss of up to $868 million. The news comes as Qantas warned of a first-half loss of up to $300 million, its first since being privatised, with the carrier announcing plans to axe more than 1000 jobs. The airline is also considering sell-downs of its Jetstar businesses in Australia, Singapore and Japan, as well as a partial sell-off of its lucrative frequent flyer program in a bid to shore up its position. Holden set to announce it is pulling out of Australia early next year Holden has reportedly made the decision to shut down its Australian operations as soon as 2016, with an announcement set for early next year. Citing “senior government ministers”, the announcement was set to be made this week, but was delayed on account of continuing discussions with the government. A decision to pull out would cost South Australia 13,200 jobs, along with $1.24 billion in economic activity. Overnight The Dow Jones Industrial Average is down to 15810.9. The Aussie dollar is up to US90.67 cents.
A suite of business tax measures is to be repealed, but the Coalition government’s move is headed for a hostile Senate and Treasurer Joe Hockey needs ALP support to get his measures passed before July 2014. The moves will wind back Gillard government changes that increased the threshold for asset write-offs and retrospective tax claims. And incrementally increased super contributions for all employees will have a two-year pause in their introduction. A government co-contribution to the super of low-income earners will also be scrapped. The measures were tied to the Minerals Resource Rent Tax, which Hockey has a mandate to scrap. The Council of Small Business Australia chief executive Peter Strong said COSBOA had advised Hockey prior to the election not to repeal the tax breaks, because they were “good”. “You don’t want confusion, because that impacts confidence. The best thing they can do is say the MRRT has to go through Parliament, but these measures will stay,” he said. The reforms introduced in 2012-13 aimed to step-up super contributions from nine per cent to 12% by July 2019. The mandatory contributions have already risen to 9.25% but Hockey’s changes will delay their next step up to 9.5% until 2016. “Any reductions in businesses’ overall wages bills would lower their operating costs, while employees could also receive more take-home pay in the near term,” the draft document states. The bill also aims to repeal loss carry-back or the ability for businesses to claim up-to $1 million as a tax deduction on past years when they paid tax. Depending on tax rates and earnings, the move allowed loss-making companies huge rebates. Another sweetener, which let businesses write-off assets up to $6500 and the first $5000 of vehicles in the financial year they were purchased will be dramatically pared down. Hockey has scrapped the vehicle write-down and made assets worth up-to $1000 deductible in the first financial year. Any others would be depreciated 15% in the first year and 30% each year after that. Hockey said in a media release yesterday that the suite of changes would save the government $13 billion. “The former government linked a number of spending measures to the failed MRRT. These came at a significant cost to the budget, to the point where the government is borrowing money to pay for these commitments,” he said. CPA Australia backed Hockey’s repeals, saying they had been “telegraphed” prior to the election. "There are certain initiatives that we like and that business likes – such as the $6500 instant asset write off for small business – but given the budget challenges, tough decisions need to be made," a CPA spokesperson said. The exposure draft of the legislation is open for comment until October 31. The legislation is to be introduced in federal Parliament in November. Greens leader Christine Milne has said her party would not support the repeal of the MRRT. “We should be making the [MRRT] more effective by increasing the rate and fixing up the loopholes created when Labor caved in to the big miners,” she said. An official at ALP Leader Bill Shorten’s office said the party’s intentions would need to be debated at shadow cabinet, but they were opposed to a cut in the government’s contribution to low-income earner’s super. This story first appeared on SmartCompany.
Opposition Leader Bill Shorten has named none other than himself as the shadow small business minister, a move that’s been applauded by the Council of Small Business Australia. Speaking to SmartCompany this morning, COSBOA CEO Peter Strong said the appointment showed how seriously Shorten took the small business portfolio. “It was very surprising news,” Strong says. “He’s a very busy man – he wouldn’t do it for fun. This shows he does value small business. “In his various portfolios in the previous government, he would often talk about small business. One of the things he gets is that we’re people, not impersonal large corporations. And that makes a big difference.” Shorten is also shadow minister for science, as well as Opposition Leader, which suggests he wouldn’t have too much time to devote to the small business portfolio. But Strong applauds the team he’s put in place to assist him, which includes Bernie Ripoll, as opposition spokesman assisting the leader on small business, and Julie Owens, as shadow parliamentary secretary for small business. Strong says Owens, the member for Parramatta, has a large small business constituency in her district and has owned her own small business in the past, while Ripoll is a highly experienced parliamentarian “with a good head around SMEs, particularly the finance sector”. “Sure Shorten will be very busy, but he’s got a team there to support him,” Strong says. “I think that’s very good news.” It’s been a great start to the parliamentary session for small business, with the ruling Liberal-National Coalition placing Small Business Minister Bruce Billson in cabinet, and moving small business from industry and into the powerful Treasury department. “We’ve been given a much higher profile,” Strong says. On Friday, Billson spoke to SmartCompanyabout his priorities as minister. His first priority, he revealed, was to make it far easier and less “bewildering” for SMEs to access government services and grants. “The idea is to streamline it so they don’t have to be brilliantly knowledgeable about the federation to be able to access services which are of interest to them,” he said. This story first appeared on SmartCompany.
The federal government has backed down on draft legislation which proposed regulating small business credit after criticism it would make it harder for small business to get funding.
Business leaders have criticised the federal government's proposal to have workplace bullying complaints heard by the Fair Work Commission, saying the move will increase confusion and encourage "forum shopping".
The 2013 federal election has been called for September 14.
The Fair Work Ombudsman has issued a warning to employers to check pay rates and entitlements over the Christmas and New Year public holidays.