Bruce Billson

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Labor MP Ed Husic calls for government to speed up crowdsourced equity funding legislation

5:58AM | Thursday, 14 May

Federal Labor MP Ed Husic has called on the federal government to bring forward its plans to introduce crowdsourced equity funding legislation in Australia.   The latest federal budget included $7.8 million in funding over four years from 2015-2016 to enable the Australian Securities and Investments Commission to implement and monitor a crowdsourced equity funding regulatory framework.   Minister for Small Business Bruce Billson said in February that he plans to introduce legislation that would create such a framework during the spring session of Parliament.   Husic, the shadow parliamentary secretary to the shadow treasurer, praised the government for allocating money for the introduction and regulation of crowdsourced equity funding, but warned Australia is still a long way from having legislation in place.   “It’s good that the budget has set some money aside for this, but overall we’re still a long way off from having a solid CSEF framework in place,” Husic says.   “The cold reality is even the Abbott government admits it will be well into this year before any draft laws supporting CSEF are even introduced into the Parliament.   “And it’s been well over a year since the Abbott government received an independent ruling outlining how CSEF could work in Australia.”   That report, from the Corporations and Markets Advisory Committee, recommended Australia introduce legislation allowing retail investors to invest up to $10,000 a year via equity crowdfunding, across at least four startups.   “What’s been announced in the budget is a response to one recommendation made in this report – which called on the Australian Securities and Investments Commission to develop some standardised documents to help guide investors in seeking CSEF funding,” Husic says.   “Again, we call on the Abbott government to bring forward the plans to introduce crowdsourced equity funding into Australia, and we restate our genuine commitment to work constructively with them to achieve this.”   Billson told StartupSmart that there are no plans to limit the framework so it only applies to public companies and the government’s intention is still to introduce legislation by the spring session of parliament.   “On all fronts we are moving very purposefully and quite deliberately “ Billson says.   “It’s important to note while other jurisdictions were advancing crowdsourced equity funding, Labor didn’t get out of first gear on the topic while in government.   “We’re working with the sector and the startup community. Those that are involved in equity crowdfunding, and even those workarounds for what’s currently permissible in the crowdfunding space, and have been formulating a framework.   “I understand the encouragement but I’m also keen to move sure-footedly, in a thoughtful and consultative way. I’m very keen to get it right.”   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.

Budget 2015: Bruce Billson reveals details of “most substantial small business package this country has seen”

5:44AM | Wednesday, 6 May

The federal government will make it easier and cheaper for entrepreneurs to start a new business in next week’s budget, as part of what Small Business Minister Bruce Billson has labelled the “the most substantial small business package this country has seen”.   Speaking to SmartCompany this morning, Billson revealed details of a number of budget measures designed to support entrepreneurs and early-stage businesses, which he says will be appreciated by the small business community but may get lost in the “broader budget debate”.   While the government has already flagged tax relief for small businesses in next week’s budget, along with the potential re-instatement of accelerated depreciation measures, Billson announced today it will also “streamline the business registration process” by creating a single website for new business owners to register their businesses using “one key identifier”, says Billson.   The change is expected to save new businesses around $13.7 million in compliance costs each year.   Billson has also revealed plans to change the way professional costs associated with establishing a new business can be depreciated.   “Something that people may not realise has been a concern for some time is these professional costs depreciate over five years,” Billson says.   The change will mean costs associated with obtaining professional business advice, legal fees and fees paid to the Australian Securities and Investments Commission will be able to be depreciated by the business immediately.   Some of the costs associated with setting up crowdsourced equity funding will also fall into this category.   Billson says the government has been working since November to make it easier for businesses to raise equity via crowdfunding and will provide additional funding to ASIC to support this in the budget.   The Small Business Minister says he is also considering ways to dispel the hesitation of some entrepreneurs to consider incorporating their business.   “We have heard too often that for many, the costs and complexity and compliance burden for small proprietary companies is excessive and not justified in the eyes of some small business enterprises,” Billson says.   “We will take the reforms that the Howard government introduced in 2003 and see if there is scope to take them further to lift the regulatory burden.”   Billson says “businesses in transition” will also benefit from next week’s budget, which will include a measure to eliminate some of the “risks” associated with changing the legal structure of their business, including the imposition of capital gains tax.   “You might start out your small business with a structure as a sole trader and it might suit you at that time, but if you find success ... the evolution and growth of your business may be better supported by a new entity structure for your enterprise,” Billson says.   Billson says the measure will only apply to businesses that change legal structures once after formation and the government is “not anticipating or seeking to accommodate a sort of flip-floppery” between different business structures.   “That would not be in anyone’s interest,” he says.   Billson declined to reveal the cost of the government’s small business package, saying those details will be revealed next Tuesday, but said small business will be at the heart of the Coalition’s second budget.   “It is about recognising future jobs and economic growth and income generation to support future living standards will come from energising enterprises,” he says.   This article was originally published at SmartCompany.

Bruce Billson wants to improve access to capital for female entrepreneurs

4:58AM | Friday, 10 April

Federal Small Business Minister Bruce Billson is calling for suggestions for how to improve access to capital for female entrepreneurs, saying the federal government is keen to “see even more women in small business”.   A recent article by the chair of Springboard Enterprises (SBE) Australia, Topaz Conway, first published by StartupSmart’s sister publication Women’s Agenda, examined four key ways female entrepreneurs struggle to access capital.   Along with a link to the article, Billson recently tweeted: “I'd love to hear your thoughts on this - female entrepreneurs & capital.”   I'd love to hear your thoughts on this - female entrepreneurs & capital http://t.co/mhNTNapw0p via @WomensAgenda #womeninbiz #smallbizAU — Bruce Billson (@BruceBillsonMP) April 1, 2015   Billson told Private Media he is inspired by “women who have worked hard to build livelihoods, support communities and promote [other] women in the workforce”.   “I have been holding roundtables with many women entrepreneurs over the past 12 months and hear the same opportunities and challenges are arising for each of them. Access to finance and capital has been a reoccurring theme of these roundtables,” Billson says.   “We are committed to creating the very best environment for them to start and grow a small business – this of course includes looking at new ways to ensure the settings are right for them to prosper.”   “Women operate almost a third of businesses in Australia across all industries and many do this while also raising children and running a household.”   Billson cites a number of key reforms, which he says should help to address the issue. These include the streamlined taxation of employee share schemes, along with Industry Innovation and Competitiveness Agenda, which includes the government’s crowdsourced equity funding reforms.   Billson also says programs such as EFIC, new trade agreements and the Women in Global Business Mentoring Program are making it easier for women to ensure their goods and services are export ready.   “Around 93.3% of Australian women business operators are working in small business and current data suggests the number of women business owners is increasing across our nation,” Billson says.   “Labour force data shows women account for around a third of our nation’s business operators. This data from January this year shows there were 406,400 women running a business.”   “As the Minister for Small Business, every single day I come across inspiring examples of women leading the way in enterprise. I recognise that many juggle family commitments to participate in our work force and face unique challenges to this participation.”   “I admire greatly this tenacity, clarity of purpose and courage. With decreased red tape, increased access to information and assistance programs our goal is to see even more women in small business.”   Job Capital managing director and Inspiring Rare Birds founder Jo Burston says more education around venture capital is needed.   “When I was growing Job Capital, I self-funded the business – and that’s quite remarkable. However, at the time I was growing that business, I was regularly getting calls from venture capitalists – sometimes three a week – and I had no idea how to manage that or what I needed to look for,” Burston says.   “There are very few women in the venture capital groups, so when a woman is going to pitch for capital – seed or angel – the person they pitch to is usually a man.”   Gen George, founder of online jobs marketplace OneShift, says female-focused venture capital networks and accelerator programs, such as Springboard Australia, are helping to close the gap.   “It’s about supporting women, not men versus women,” George says.   This article originally appeared on SmartCompany. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Employee share scheme rules improved, but still behind the US and UK

3:42PM | Wednesday, 25 March

Australia’s startup community has welcomed improvements to the employee share scheme legislation, but raised concerns about exemptions for ASX-listed businesses and employees with more than a 10% stake in the company.   The Tax and Superannuation Laws Amendment (Employee Share Schemes) Bill 2015, tabled in Parliament this morning, will wind back changes made by the former Labor government in 2009 and allow startup employees who are issued with options to defer tax until they convert them into shares.   The current legislation governing employee tax schemes has long been a headache for local startups wanting to attract talent to Australia.   Matt Barrie, the chief executive of Freelancer, told StartupSmart the tax regimes in America and the UK are “far better” than what is in the tabled reforms.   As it stands in the bill, companies with a turnover of more than $50 million will be exempt from the government’s tax concessions – as well as those listed on an approved stock or securities exchange.   “There’s more than just the $50 million [issue] … The ASX exemption is a disaster,” he said.   “Our government is paying lip service to supporting the technology industry.”   Reuben Bramanathan, senior lawyer at Adroit Lawyers, told StartupSmart it was disappointing the government had not addressed “some of the key issues” with the draft legislation that were raised by the startup sector during the consultation process.   “For example, the proper tax treatment is not available to employees with more than 10% of the company, which can cause problems for founders,” he said.   “Another real problem is that, if an employee resigns from a company on good terms, and they keep their vested shares, they still have to pay income tax at that time. This taxing point applies even if they are unable to sell the shares at that point, for example, due to lockup restrictions in the shareholders’ agreement.”   Small Business Minister Bruce Billson has defended the legislation, telling StartupSmart the bill was “unashamedly focused” on early stage startups and smaller enterprises.   Those concerns aside, the changes have been welcomed with open arms. Peter Bradd, the a director at StartupAUS, says it's encouraging to see the goverment recognise the potential of Australian startups and take steps to rectify the tax treatment of share schemes.   "Changes to the ESS will help Australian startups become strong drivers of increases in job creation and, because many help to drive technological change, this will lead to productivity gains and job creation for our economy," he says.   Meanwhile the chief executive of the Australian Private Equity & Venture Capital Association, Yasser El-Ansary, said in a statement the tax treatment of share schemes has been “a major handbrake” on Australia’s startup ecosystem for almost six years.   “There have been countless stories of home-grown Australian entrepreneurs packing their bags and relocating overseas because our tax rules in this area have been such a problem – especially when other countries around the world are going to great lengths to lure our entrepreneurs offshore,” he said.   El-Ansary says all members of parliament should get behind the proposed changes now that they have been tabled.   “The strength of our economy into the future will depend on our capacity to foster a more entrepreneurial culture where we encourage startups to attract and retain the best talent here in Australia.”   The new rules governing employee share schemes are on track to come into effect on July 1.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

Employee share scheme changes “unashamedly” aimed at early stage startups

3:43PM | Wednesday, 25 March

Early stage tech startups are the focus of changes to the employee share scheme legislation introduced into Parliament on Wednesday.   Small Business Minister Bruce Billson tabled the bill on Wednesday morning, saying the reforms will “restore and rebuild” startup incentives, which were taken away by the previous Labor government.   Speaking to StartupSmart after the second reading, Billson said an effective employee share scheme framework is an important ingredient to any healthy economy.   “There has been a consistent and loud chorus calling for change,” he said.   “The incoming government recognised that and we’ve set out not only to correct the harm of those 2009 changes, but stepping forward with new concessions to bolster support and engagement for employee share schemes.”   The changes   Companies and employees who are issued with options will generally be able to defer tax until they exercise the options (convert the options to shares), rather than having to pay tax when those options vest.   Eligible startups will be able to issue options or shares to their employees at a small discount, and have that discount exempt (for shares) or further deferred (for options) from income tax.   The maximum time for tax deferral will be extended from seven to 15 years.   The maximum individual ownership limit for accessing employee share scheme tax concessions will be increased from 5% to 10%.   Eligible startups need to have an annual turnover of less than $50 million.   In the event a startup raises venture capital, that will not affect the eligibility threshold.   If a startup is acquired before it has operated for three years, its original shareholders will still get their 15% tax deduction on the sale of the shares.     Billson says the changes are on track to come into effect in the new financial year.   “I’ve had encouraging early responses with opposition members and I’m optimistic that will all be implemented as per a tight and demanding timetable which is exactly what the startup industry were calling for,” he said.   StartupSmart understands there is support from within the Labor party to overhaul the current rules governing employee share schemes.   The legislation tabled in parliament today not only allows employees at eligible startups to receive tax concessions, but also ensures the regulatory burden faced by young tech companies is significantly reduced.   Billson says there will be “good-to-go template tools and documents” from the ATO available to help businesses wanting to set up an employee share scheme.   Reuben Bramanathan, senior lawyer at Adroit Lawyers, told StartupSmart there were some “key issues” with the draft bill that have carried over to its current form.   “If an employee resigns from a company on good terms, and they keep their vested shares, they still have to pay income tax at that time,” he said.   “This taxing point applies even if they are unable to sell the shares at that point, for example, due to lockup restrictions in the shareholders’ agreement.”   Billson says this was identified as an issue during the consultation process.   “This was an issue that came up and we consulted quite widely on that as we knew it was an issue of some interest,” he said.   “We extended the tax refund provision to cover situations where an employee is forced to pay when those options lapse or cancel. That’s what we’ve sought to do to alleviate that concern.”   Another part of the legislation that has been criticised is the exemption for startups turning over more than $50 million, as well as companies listed on the ASX. That means companies like Atlassian and Freelancer will not be able to access the scheme.   However Billson defended this, saying issues around employee share schemes “most visibly” affect smaller players.   “It’s unashamedly focused on startups and smaller enterprises,” he said.   “We’ve got to work within a frugal budget climate, therefore we’ve had to target these measures where they can best make a difference.”   Atlassian co-founder Mike Cannon-Brookes has criticised that position, telling SmartCompany last month it’s a bit like saying Facebook and Google don’t need to give employee share options “which I think they would disagree with”.   The new employee share scheme rules are due to come into effect on July 1 should they pass both houses of parliament.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

Employee Share Scheme legislation to be introduced to parliament today

3:13PM | Wednesday, 25 March

The Minister for Small Business Bruce Billson will introduce long-awaited changes to Employee Share Scheme legislation into parliament today.  In a statement Billson outlined the new scheme:   - For companies and employees who are issued with options will generally be able to defer tax until they exercise the options (convert the options to shares), rather than having to pay tax when those options vest.   - Eligible start-ups will be able to issue options or shares to their employees at a small discount, and have that discount exempt (for shares) or further deferred (for options) from income tax. - The maximum time for tax deferral will be extended from seven to 15 years.   - The maximum individual ownership limit for accessing employee share scheme tax concessions will be increased from 5 per cent to 10 per cent.   - Eligible startups need to have an annual turnover of less than $50 million.   In an interview with The Australian Financial Review’s Phillip Coorey Billson gave a few more details.   - In the event a startup raises venture capital, that will not affect the eligibility threshold.   - If a startup is acquired before it has operated for three years, its original shareholders will still get their 15 per cent tax deduction on the sale of the shares.   StartupSmart is speaking to Billson at 12.45pm. If you’d like any clarification let us know and we’ll put your questions to the minister.   Follow StartupSmart on Facebook, Twitter, and LinkedIn. Buy tickets to the 2015 StartupSmart Awards.

Employee share scheme reform needs to be more “founder friendly”

3:52AM | Thursday, 12 March

The federal government’s changes to the taxation of employee share schemes are not “founder friendly” despite being overall a step in the right direction, according to an Australian entrepreneur who has been consulting with policymakers.   Rebekah Campbell, founder of Posse, told StartupSmart the government – and Small Business Minister Bruce Billson in particular – have been “great” when it comes to hearing what startups need.    “They really listened,” she says.   “I think they have gone a long way to addressing the problems, but there are still a couple of big things from the startup side of things.”   However, Campbell says the exposure draft, which was released in January this year, needed to take another look at the 10% limit on shareholding provision.   “The current way the revised employee share plan is structured, if you own more than 10% you can’t defer the tax on those options,” she says.   “So it’s the biggest problem with the legislation – it is not founder friendly but employer friendly.”   Campbell says 10% is “such a small amount” and most founders will not feel like founders any more if they own that much of the company. Instead, they will feel like employees.   Reuben Bramanathan, senior lawyer at Adroit Lawyers, told StartupSmart although the draft legislation is good news in general for startups, there are “some gaps” which could cause problems.   “The 10% limit could be a problem for startups who have already raised funding at a valuation, and later need to bring on a new co-founder or want to increase equity incentives for the original founders,” he says.   “Any shares or options issued to someone who holds 10% or more of the company will be taxed up front. That 10% limit includes shares and un-exercised options.”   Bramanathan also points out that at this stage the proposed changes will not apply to foreign companies which employ Australians. In addition, employees will still need to pay tax on any shares or options they want to keep when their employment with the company ends.   “There has been a strong response from the startup sector to address these gaps,” he says.   “The new legislation really needs to address these things to give Australian startups a level playing field to attract and retain quality employees.”   The government hopes to push through its employee share scheme reforms by July this year.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Bruce Billson: Equity crowdfunding framework will be on the table by spring

4:58AM | Friday, 10 April

The federal government has put a timeline on its new legislative framework for equity crowdfunding, which will make it easier for small businesses and startups to raise capital through online crowdfunding platforms.   The proposed legislation will allow SMEs and startups to raise capital by offering equity to a large number of small-scale retail investors through platforms such as VentureCrowd and Equitise.   Currently, crowdsourced equity funding is only available to wholesale investors with more than $2.5 million in investable assets or annual earnings of around $250,000.   Small Business Minister Bruce Billson told SmartCompany he hopes to introduce legislation to allow retail investors to buy equity in private businesses during the spring session of Parliament.   “This is an important opportunity for small businesses, startups and those businesses going through an anticipated period of growth to access finance,” says Billson.   Billson says since the global financial crisis, consolidation in the bank and finance space had made it increasingly difficult for some businesses to get financing through traditional lenders.   “This is an important alternative source of funding that will sit alongside traditional funding models,” he says.   “We want to make available to Australian entrepreneurs and business leaders a wider range of affordable and accessible finance to support their enterprises and the Australian economy.”   Billson yesterday hosted a roundtable in Sydney with industry stakeholders, including Financial Services Council chief economist James Bond and Equitise co-founder Chris Gilbert, to address recommendations previously made by the Corporations and Markets Advisory Committee (CAMAC).   CAMAC recommended Australia introduce legislation allowing retail investors to invest up to $10,000 a year via equity crowdfunding, across at least four enterprises, and allow companies to raise up to $2 million per year on such platforms.   Billson says yesterday’s discussions canvassed the potential elements of a "sure footed" crowd-sourced equity funding model, as well as the role and remuneration of intermediaries in crowdfunding; how to consider secondary markets; and the need to keep a lid on compliance and regulatory costs so they are not disproportionate to the funds raised.   The roundtable also discussed whether there was a need to create a distinctive entity structure for crowdfunded enterprises or whether fine-tuning existing company law would be good starting point to legislation.   Billson says a second roundtable will be held with the Melbourne startup community in coming weeks.   “I was really encouraged by the vigour and willingness and expertise shared yesterday,” says Billson.   “We are now trying to tease out the details of work best for businesses and for the economy,” he added.   This story originally appeared on SmartCompany.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Equitise launches its crowdfunding platform in New Zealand

1:28AM | Friday, 30 January

Equity crowdfunding platform Equitise launched in New Zealand on Friday, with one startup seeking to use the platform to raise $350,000.   The launch comes shortly after the startup closed a $500,000 funding round, led by a venture capitalist from Sydney. Equitise co-founder Chris Gilbert told StartupSmart he expects a larger funding round to follow later this year.   “Over the past few months, I’ve spent a lot of my time in New Zealand getting Financial Markets Authority (FMA) licence – the FMA being New Zealand’s main financial regulator. Before Christmas, we obtained our FMA equity crowdfunding licence,” Gilbert says.   “The New Zealand launch went live this morning, and we’ve had the first people validating their business ideas through the platform.”   The first company to use the platform is tourism travel guide Tourism Radio NZ, which had revenue over $950,000 in 2014. Gilbert says it has already secured $50,000 in funding and is seeking to raise $350,000, having already secured funding from a high-profile New Zealand-based angel investor.   The second deal, set to go live in the coming days, is an Auckland-based biotech business working on cystic fibrosis. It’s already raised $1 million and is looking to raise $2 million.   Equitise relocated from Sydney to New Zealand, where equity crowdfunding legislation is already in place, rather than wait for legislation to be implemented in Australia.   There was concern that Australian legislation might not be implemented until next year, but progress has quickened. Gilbert says equity crowdfunding legislation in Australia is starting to take shape, and he has been spending time with parliamentarians discussing the reforms.   The consultations included a round-table meeting involving ASIC, Treasury officials, Small Business Minister Bruce Billson and six or seven platform providers. Treasury is in the process of gathering submissions as to what the legislation should look like.   While there are still intricacies of the reform to iron out around investors and capital, Gilbert says the reforms are on track to be implemented sometime around the middle of this year.   “The federal government has been supportive since it has become aware of equity crowdfunding as an issue, and I’m confident we’ll see changes soon,” he says. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Labor lashes out at the government’s ‘heavy words’ and ‘light action’ on crowdsourced equity funding

12:01AM | Tuesday, 9 December

The Abbott government’s commitment to support crowdsourced equity funding is welcomed but there is still a “lack of concrete action” being taken, according to the federal opposition.   The release of the Financial System Inquiry’s recommendations saw the government announce yesterday it will release a discussion paper on what a regulatory framework to facilitate crowdsourced equity funding could look like.   In a joint statement, the ministers for finance and small business, Mathias Cormann and Bruce Billson, said they would consider the model recently implemented in New Zealand, as well as the framework put forward by the Corporations and Markets Advisory Committee report in June this year.   “We are keen to ensure that any crowdsourced equity funding model appropriately balances supporting investment, reducing compliance costs (including for small business) and maintaining an appropriate level of investor protection,” the ministers said.   “Small business and entrepreneurs are a crucial driver of productivity and economic growth.”   However, Labor has lashed out at the move, saying the government is incapable of giving the startup sector a “clear view of what it will actually do” to facilitate crowdsourced equity funding (CSEF).   “The Abbott government’s CSEF discussion paper is heavy with words and light on concrete action,” said Ed Husic, the parliamentary secretary to the shadow treasurer.   “It should have drawn a comprehensive roadmap on how to introduce CSEF in Australia. The Abbott government’s failure to act will concern those startups seriously considering moving offshore because of more favourable regulatory environments elsewhere.”   Submissions to the government’s crowdsourced equity funding discussion paper close in February next year.   Crowdsourced equity funding is currently only available to wholesale investors with more than $2.5 million in investable assets or annual earnings of around $250,000.   Follow StartupSmart on Facebook, Twitter, and LinkedIn.

It’s getting warmer, which means it’s time for Startup Spring

10:09AM | Wednesday, 8 October

Australia’s national startup festival Startup Spring returns this week promising to build upon the gains it made last year, when it helped push the industry further out onto the national stage.   The event, organised by StartupAUS, launches on Friday, with the full schedule of events getting underway on October 13 and running through to November 3.   StartupAUS board member Peter Bradd says last year’s event has helped build awareness of Australia’s startup industry, which in turn has led to an increased level of influence with the federal government. Most recently, Bradd, representing StartupAUS, has met with Minister for Small Business Bruce Billson, and Minister for Industry Ian Macfarlane, with whom he discussed things like visa reform, digital education, employee share options and crowdfunding regulation.   “We hope it raises awareness that we do have a strong startup ecosystem here in Australia,” Bradd says.   “We want to tell the stories of what’s happening in the startup ecosystem here and take people on a journey that many are not familiar with. Show them what life is like as an entrepreneur.   “I would encourage people to get down to the events. One thing I often hear from people outside the startup ecosystem is how welcoming it is. Everyone has an open door policy it’s very easy to connect and to go from knowing nothing, to knowing quite a lot.   “It’s a great opportunity for anyone that has a business idea, or if they’re a university student wanting to know what it’s like to join a startup or go and found a startup.”   This year there are 165 events taking place as part of Startup Spring all over the country.   StartupAUS board member and Director of Engineering for Google Alan Noble says the festival is the perfect opportunity to place Australia’s startup sector centre stage and celebrate the startup community.   “From coding sessions and bootcamps, to awards and networking drinks, there is an event for everybody who has an interest in tech startups,” he says.   “We really hope that the Startup Spring festival will inspire the next generation of Australian entrepreneurs. Today’s startups can be tomorrow’s Tesla Motors, iRobot or Google. I believe that, with the right attitude to skills, innovation and entrepreneurship, we can create a very bright future for Australia.”   For a full list of Startup Spring events visit www.startupspring2014.org. Follow StartupSmart on Facebook, Twitter, and LinkedIn.

Equity crowdfunding: What Equitise learnt when it met with government

9:19AM | Monday, 29 September

Support in numbers is something I have learnt a great deal about this week when I reflect on my trip to Canberra to meet with various government officials to discuss the current execution timeline of crowd sourced equity funding (CSEF) in Australia.   All in all it was a very positive day for the development of the industry and Equitise looks forward to continuing to work with government officials into the future to expedite the process of CSEF in Australia.   The day kicked off with a 5.30am alarm ringing in my ear, I was on the dual prop flying Kangaroo by 7.40am and landing in Canberra by 8.40am with fellow industry stakeholders by my side James Bond (Chief Economist of the Financial Services Council) and Ben Heap (CEO of AWI Limited).   Treasury   The first meeting was with Treasury at 9.30am where we met with the team that is driving the review process of researching, analysing and assessing CSEF globally. These guys have also been pulling apart the CAMAC paper over the past four months and considering its recommendations.   After meeting with Treasury it was obvious that they are advocates for the rollout of CSEF in Australia. For those that are wondering, the role Treasury play in the process (apart from forming a position on the current state of play globally) is to essentially draft the regulation impact statement when the federal government decides to take a stance and press forward with expediting the legislation.   It really was a pleasure meeting with the team driving this in Treasury and sharing our collective thoughts as key stakeholders in the process from both an intermediary (Equitise), an investor (Ben Heap/AWI Limited) and an industry representative’s perspective (James Bond). The great news is that it seems the stakeholders and Treasury are very much on the same page with thoughts on the CAMAC proposal and potential paths forward for this exciting new asset class that I am very confident will be developing in Australia sometime next year.   We left Treasury at 10.30am and made our way to the front doors of Parliament House.   Industry   Our next meeting was with the senior advisers to Minister of Industry, Ian Macfarlane, where we discussed the “potential” release of an innovation paper, the same paper I was chatting to Malcolm Turnbull about just a couple of weeks ago that summarises ways to improve/innovate our digital economy (including the issues with employee share options – ESOP). I got the strong impression that this will be released any day now and am guessing it has been held up due to other important breaking news – completely fair enough.   It was hugely productive chatting with Minister Macfarlane’s senior advisers and hearing the government’s positive position on CSEF. Without being able to divulge much information about the exact position of industry, it was obvious that CSEF is being embraced internally and is 100% supported by industry.   Small business   We wondered across the hallways of Parliament House to meet with the Small Business Minister Bruce Billson and one of his senior advisers to discuss his thoughts on CSEF and its importance to the Australian small and medium-sized enterprise community.   Minister Billson is understandably a huge advocate for this method of alternative financing for businesses across Australia. With more than 30% of the two million SMEs operating across the country not having access to expansion financing for their businesses last financial year, Minister Billson certainly understands first-hand the difficulties faced by fledgling Australian enterprise.   After meeting with Minister Billson it quickly became apparent the support for CSEF was strong in a number of facets of Parliament House.   I guess the question on everyone’s mind is, if there is huge support, why isn’t it moving faster?   Essentially, it is in retrospect. Just not as fast as key stakeholders would hope for.   What we need to understand is that this is a new asset class, it is risky for investors and the government just wants to ensure that they do it properly the first time around. As opposed to having a quick and dirty shot at it, not getting it right and then having to disrupt an emerging industry with another change in policy one year down the track.   A word of advice though, key stakeholders in the CSEF space need to band together to grow the number of voices in this space. As you will likely take away from this blog post, government is well aware and very supportive of CSEF; however, what we are lacking is absolute urgency to get it pushed along faster, but in a positive way.   Chris Gilbert is co-founder at Equitise. This post originally appeared on LinkedIn.

Startups impatient for change as government inches closer to employee share scheme reform

9:15AM | Tuesday, 16 September

Startups say reform of the employee share scheme can’t come soon enough, as the federal government makes progress on its plans to overhaul the scheme.   The reform, which is a part of the Abbott government’s National Industry Investment and Competitiveness Agenda, inched closer to realisation last week when the agenda was approved by cabinet.   Small Business Minister Bruce Billson previously told SmartCompany the government wants to roll back the “harmful and damaging” rules introduced by the Labor government in 2009, which saw employees taxed at the point when they receive share options from a company, rather than when they were sold or became full shares.   Treasurer Joe Hockey last week told The Australian the government was “absolutely determined” to address the changes Labor made to the share scheme.   The current system is said to be a hindrance to both employers and employees, with Crowe Horwath partner David Lilja previously telling SmartCompany there is a timing delay created between when an employee shareholder pays tax on the shares and then sells them.   “They have to come up with money to pay tax debt, but they can’t actually liquidate those shares,” says Lilja. “It’s absolutely a disincentive.”   It is believed the government is considering a British-style system that would only tax an employee’s shares once they are sold. The Australian reports Treasury officials are evaluating different benchmarks from the British system to avoid the practice being too widely used and sacrificing tax revenue.   Billson previously hinted to SmartCompany the system would include eligibility and entity size tests, limiting the scheme to employers of a certain size to create a boost for the SME and startup sector.   Jonathan Lui, cofounder and chief operating officer of Sydney-based tech startup Airtasker, told SmartCompany the changes couldn’t happen at a better time for his company.   “From an enterprise perspective and investor perspective, I think that Australia is on the cusp of a new phase of the tech startup boom,” says Lui.   He says Airtasker, which provides an online and mobile marketplace for users to outsource everyday tasks, stands to benefit from the reform by attracting and retaining the best talent available.   “This will change the way we get employees to be part of the business. Not just as employees fulfilling day to day tasks, but buying into what the business is trying to achieve,” says Lui.   Lui says being able to offer potential staff a “black and white” shareholder incentive without any “grey area” would also help attract talent away from the big end of town.   “For those considering whether it’s the right time in their life to pursue [the startup sector], this will help sweeten the deal,” Lui says.   “When you become a shareholder, you become a partner. When employees or investors understand that privilege, then the mentality is on the same page.”   As a part of the Competitiveness Agenda, the Abbott government is also considering shaking up regulations around crowdsourced equity, allowing startups and small businesses gain better access to this form of equity.   Lui says action by the government to reform the employee share scheme and crowdsourced equity could potentially position Australia as a global thought-leader on regulation.   “Depending on how quickly we can bring about changes…  We could really innovate on regulations and that will really help us move ahead globally,” he says.   This story originally appeared on SmartCompany..

Budget 2014: Specialised government unit to assist small business with winning contracts

5:49AM | Tuesday, 13 May

The federal government will create a specialised unit to help small businesses gain better access to government contracts.   The government has allocated $2.8 million in the budget over four years to establish the unit within the Department of Finance, with approximately $600,000 to be spent each year between 2014 and 2018 in addition to around $500,000 in capital funding.   The government said in its budget papers the aim of the policy is to “make it easier for small business to do business with government”, with the finance department to “work with small business and their representatives to develop procurement policy, guidance material, training and education programs”.   In a statement accompanying the budget papers, Small Business Minister Bruce Billson said this is something small business has been asking for.   “Small businesses have said contracting documents and accompanying obligations, including requirements to have very expensive insurance, can be overly complex and impose barriers to tendering for contracts,” said Billson.   The new unit sits alongside the government’s commitment to extending unfair contract protections for small business, which was also confirmed in tonight’s budget.   The policy, which Billson has championed for some time, will grant small business the same unfair contract protections currently available to consumers under Australian Consumer Law, costing the government $1.4 million.

Budget 2014: Unfair contract provisions extended to small business

5:38AM | Tuesday, 13 May

Small businesses are going to be protected from unfair contracts imposed by big business.   Small Business Minister Bruce Billson has promised the extension of unfair contract protections for small business for some time and the budget delivers on this.   Small business will be able to access the same unfair contract protections currently available to consumers under the Australian Consumer Law.   The scheme will cost $1.4 million and will include legislative reforms to make unfair terms in standard form contracts with small business void.   Once the laws come into force, any remaining money will be used to provide education and compliance activities to small business.   “This will help to provide a level playing field for small businesses and enhance the welfare of Australians by increasing small business certainty, confidence and productivity,” Billson said in a statement accompanying the budget papers.   Billson previously told SmartCompany he finds small businesses often have to negotiate with big business on a take it or leave basis under standard form contracts which place a disproportionate burden on one party over the other.   “What happens with standard form contracts is businesses use them irrespective of the scale or legal status of the person they are contracting with, consumers have certain protections but small businesses have no more power to negotiate and no access to those unfair contract provisions,” he said.

Budget 2014: Small Business Commissioner scrapped in favour of $8 million Small Business Ombudsman

5:39AM | Tuesday, 13 May

The Australian Small Business Commissioner will be replaced by a Small Business and Family Enterprise Ombudsman, which will act as a “concierge for dispute resolution”.   The federal government has allocated $8 million over four years to establish the ombudsman, with $2 million to be spent each year between 2014 and 2018.   The announcement of funding follows the release of Small Business Ombudsman discussion paper in April, which is currently open to community consultation.   The government said in its budget papers the ombudsman will be a “Commonwealth-wide advocate for smaller enterprises; a single-entry point agency for small business to access Australian Government small business programs and support; a contributor to making Australian Government laws and regulations more small business friendly; and a concierge for dispute resolution”.   Small Business Minister Bruce Billson said “small businesses can find it difficult to navigate the Commonwealth and its numerous departments, which is why we are moving to this single entry-point model”.   “The small business sector hasn’t been forgotten in this budget and by making the right choices today, we create a stronger economy tomorrow with more jobs and a stronger small business sector,” said Billson.   Billson said the ombudsman will also “cut compliance burdens and reduce red-tape, meaning small businesses can get on with the job of attending to their customers”.   Peter Strong, executive director of the Council of Small Business of Australia, previously welcomed the establishment of a Small Business Ombudsman, telling SmartCompany in April he was in favour of an ombudsman with real power to resolve disputes.

Leaked draft for terms of reference of Fair Work Act review: SMEs react

3:39PM | Sunday, 9 March

Penalty rates, flexibility and pay conditions are on the agenda for the upcoming Productivity Commission review of the Fair Work Act, according to Fairfax Media.   A leaked draft terms of reference for the review revealed the broad scope of inquiry this morning, as Council of Small Business of Australia executive director Peter Strong called on the Productivity Commission to be practical, rather than ideological in its approach to workplace issues.   “The penalty rates issue is great, but it often gets tied up in ideology. It’s not about getting rid of penalty rates, the big word is actually practicality,” Strong told SmartCompany.   “I think the Productivity Commission will stay away from ideology and actually look at the impact on productivity.”   The wide-ranging review is also set to look at union militancy, the ability of the labour market to respond to economic conditions and the impact of current laws on unemployment.   Small Business Minister Bruce Billson told SmartCompany the review has been designed to “support the objectives of the nation in terms of the economy and employment opportunities”.   “It’s consistent with our election commitment and it will improve the incomes, livelihoods and employment opportunities for Australians and also the economy more generally.   “We will take the changes to the next election so the electorate can decide if they’re for the good of Australia.”   The review’s scope is pleasing to small business, but Australian Retailers Association executive director Russell Zimmerman told SmartCompany “it’s no surprise”.   “I don’t think it’s really anything different to what the government said prior to the election. There is no great surprise and we’ve always supported the government and the Productivity Commission in its review of the Fair Work Act,” he says.   “We will be looking at penalty rates and we’ll be seeking a reduction, particularly on Sunday.”   The impact of red tape will also be considered as part of the review, which aims to establish “fair and equitable pay and conditions for employees, including the maintenance of a relevant safety net”, according to Fairfax.   The terms of reference are yet to be finalised by Parliament. However, the leaked document revealed it would “maximise outcomes for Australian employers, employees and the economy, bearing in mind the need to ensure workers are protected, the need for business to grow, prosper and employ and the need to reduce unnecessary and excessive regulation”.   While penalty rates are an important issue for small business, neither Strong nor Zimmerman expect them to be completely removed.   “We don’t think at this point in time we need to have penalty rates abolished completely,” Zimmerman says.   However, he does believe lowering weekend rates will help boost employment.   “Some of our large retail chains are closing doors on Sundays and public holidays. While this happens no one is getting employed. Obviously this is a detriment to the Australian economy and we need to look at making things better, fairer and boosting productivity for the whole of Australia.”   Strong says the broad scope of the review is necessary to meet the needs of small business.   “When things get too wound up in one issue, reviews like this tend to lose their way,” he says.   “From a small business point of view, it’s not one thing which affects us, it’s several.”   Strong says flexibility and pay conditions are also important issues for small business.   “With the flexibility legislation, many of us liked the laws which were introduced under the previous government, but they’re too hard to understand. So if the government and the commission is looking at how to better communicate with small business that’s a good thing,” he says.   “Pay conditions are also important. In a small workplace none of us are pay masters… We need a system which is easy for both the employers and employees to understand. There needs to be no ambiguity.”   Employment Minister Eric Abetz confirmed to ABC Radio the review would be broad and thorough, but did not elaborate further.   “We're not in a position to pre-empt what's going to be in the terms of reference other than to say we did promise a comprehensive, broad review of laws,” he says.   However, opposition employment spokesman Brendan O’Connor told ABC Radio the scope of the review was “frightening”.   “This government has Work Choices in its DNA and it wants to return to reducing conditions of employment particularly for low and mid income earners,” he told ABC radio.   “We know now the true intent behind this government in terms of reforming the Fair Work Act.”   But Strong says the Productivity Commission has a strong track history.   “We’ll get the right hearing and the right recommendations will come out of it, so long as the focus is on practicality, not ideology.”   Originally the review was due to be launched on March 7, but earlier this week it was delayed until after the March 15 state elections in Tasmania and South Australia.   This article first appeared on SmartCompany.

Coalition review of Franchising Code could see penalties hit $50,000

1:47AM | Monday, 6 January

The federal government will pick up where the former Labor government left off when it comes to reviewing the franchise sector, with the potential for penalties of up to $50,000 for breaches of the Franchising Code of Conduct.   Small Business Minister Bruce Billson told SmartCompany this morning “the Coalition advocate penalties to help enforcement of the code”.   In 2013, the Wein review of the Franchising Code of Conduct made 18 recommendations to update it, which were not implemented due to the federal election.   “We welcome the Wein recommendations, after urging the previous government to take action on the code for many years,” Billson says.   Billson says the federal government wants to ensure that franchisors who breach the code face consequences; that franchisees which are harmed have the resources to seek remedy; and that there is a nationally consistent regulatory framework rather than a fragmented state-by-state approach.   The franchise sector has been regulated by the compulsory code since 1998, but to date it does not include penalties for breaches.   Billson says the Coalition is “working as we speak” to ensure that changes are made, with a regulatory impact process expected to be completed by mid-year.   He says the potential fines of $50,000 will be for “serious but less egregious” breaches of the code, while there will still be full legal avenues and major fines for those found to be conducting “egregious” breaches.   Billson says the aim is to ensure a level playing field for franchisor and franchisee.   Franchise Advisory Centre principal Jason Gehrke told SmartCompany penalties are less about the treatment of franchisees, and more of a matter of adhering to the code.   For example, Gehrke says if a franchisor fails to give a disclosure document, a fine could be relevant.   “What would be a concern is the extent of the fine and the cause of the penalties – if it is an innocent or insignificant breach, a fine could be disproportionate,” he says.   “If they are required to provide a list of franchisees, and that list doesn’t include the franchisees that just joined the network, or if there are franchises in a state of transition, with one being sold to another, that inaccuracy could result in a fine.”   Gehrke says most franchisors won’t be worried about the potential of penalties, as most adhere to the legislative requirements implemented in 1998.   “Most are not concerned about fines, providing the extent of the fines or penalties are limited, clear and unambiguous,” he says.   Gehrke says that as part of the Coalition’s pre-election policies, it also promised to take a “root and branch” review of the competition law policies.   “Anything from the Wein inquiry that is adopted, they would want to make consistent with the competition law reviews,” he says.   This article first appeared on SmartCompany.

Bill Shorten names himself shadow small business minister

10:31AM | Tuesday, 22 October

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.

Bruce Billson on red tape warpath, with access to grants and the carbon tax repeal top priorities

10:06AM | Friday, 18 October

In 2014 small business looks set to have a fairer trading environment, improved access to government grants and a government which is “small business friendly”, Small Business Minister Bruce Billson told SmartCompany. Billson yesterday met with other federal, state and territory small business commissioners to discuss issues such as removing red tape and having a single point of entry for small business to access information on government grants.   The small business advocates also discussed overhauling legislation which affects small business, with the goal of making the laws simpler.   “We’re getting on with it and getting into it,” Billson says.   “There were three things we were trying to achieve yesterday. One was a formal opportunity to catch up with the state-based small business commissioners and secondly to hear from them what they’re seeing in the field, what issues are being raised and what disputes they’re responding to.”   Billson says making sure “field evidence” informs his own thinking is crucial.   “Some of the feedback which was shared was that it can be bewildering for a time poor small business person to find their way through the mystery of the different state and federal roles and departments which may be of interest to them,” he says.   “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.”   Billson says over time, the aim is for small business to be able to access things like information on government, available government grants and advisory services in one place.   “In the short-term we’re looking to make sure avenues for information like business.gov.au are publicised and that the information and links of most relevance for small businesses is easy to find,” he says.   “At the moment accessing grants can be overwhelming which acts as a disincentive.”   The single point of access for small business information will eventually be shifted from Industry to Treasury.   When meeting with the commissioners, Billson also started the discussion about transforming the role of Australian Small Business Commissioner (currently held by Mark Brennan) into the small business and family business ombudsman.   This role would have more authority to police fair commercial conduct between big and small businesses.   However the major focus for small business at the moment is repealing the carbon tax.   “Right now it’s abolishing the carbon tax, mainly because of its importance to restoring business and consumer confidence and relieving the cost of living pressures from households,” Billson says.   “But we also want to remove the cost pressures from businesses. They’re saying they’re optimistic about the future, but there are difficult trading conditions and there isn’t an appetite for consumers to pay more, so the cost pressures can result in profitless trading periods.”   Billson says he wants to help create a confident, stable and predictable government which will “encourage those inclined to invest to do so” in order to generate strength in the economy.   Other issues currently on the agenda for Billson include responding to the last week’s productivity commission findings into how regulators interact with small business, reviewing competition laws, and implementing some of the changes from the Wein franchise report in regard to legislation which overlaps with the states.   “We’re finding there are particular pressure points which have arisen. There has been quite a lot of traffic through their (the commissioners) offices about commercial disputes, there’s been a lot of activity in the construction sector and franchising and retail too,” he says.   “One of the discussions was to make sure what the Commonwealth does is complimentary to what the states are doing and not part of the confusion.”   As for the review of competition laws, Billson is looking into the “terms of reference and what arrangements will get the best outcomes”, removing unfair contract protections and making it easier for small businesses to do business.

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