Australia wants to entice entrepreneur expats with generous tax breaks for start-up businesses in a bid to broaden the economy away from a reliance on mining.
The government proposes to introduce an entrepreneur visa linked to a 20% tax offset and capital gains tax exemptions run on similar lines to the UK’s Seed Enterprise Investment Scheme (SEIS).
Prime Minister Malcolm Turnbull explained the country needed an ‘ideas boom’ to boost the economy.
“The mining boom cannot go on forever, but investing in innovation can,” he said.
“Australia needs to wake up and see that mining is stalling and that if we want the economy to carry on growing, we need new ideas, new companies and people who can make them work.”
Ideas boom needed
Australia has seen two decades of economic growth based on mining, but like the rest of the world, the country is seeing demand for commodities fall, lower prices and a fall in tax revenues.
Turnbull, a businessman with a technology background, said in an announcement that Australia was lacking the rest of the leading developed countries in research and development and that a cultural shift was needed.
“Australians are not comfortable with risk and new businesses find raising funds difficult,” said Turnbull.
“We expect more failures than success, but we appreciate that entrepreneurs learn from their failures.”
The new entrepreneur visa will have no cap on numbers.
Money for university spin-offs
The government will invest £525 million in start ups – but Turnbull has pledged to change his policies if they do not work as intended.
“We want to get away from the idea that every government policy will work. It won’t. If a policy doesn’t work then we will look at why and change it,” he said. “That’s how a business works and government should be the same.”
In Australia, insolvency laws will undergo changes to make them less of a stigma for businesses that fail.
Schools will also be encouraged to teach children computer programming and a £95 million science funding project will provide money for university research spin-offs.
“We want to attract the best brains from abroad but also have to invest in our own schools and universities if this policy is to work,” said Turnbull.