Monday, May 16, 2022

Startup execs and VCs on what they want from the federal budget

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Federal Treasurer Josh Frydenberg hands over his fourth and final budget for Tuesday night’s federal election and the startup industry is hopeful that the Morrison administration, as it prepares for the polls, will address a range of problems facing technology.

So what’s on the wish list? We spoke to a range of startup executives, founders and venture capitalists for their views on the issues that matter.

This is what they think about

Adam Milgrom

Partner, giant leap

Targeted support for female founders + health and climate technology startups

We see the role of government in helping the ecosystem thrive and obviously the budget is an important opportunity to show their support.

Within that framework, we would like to see an increase in early stage R&D funding for cleantech and health technology companies as we have great founders creating solutions to the climate crisis (HolonIQ Climate 100 data) and combining research and technology to solve complex challenges in health care, and both areas are largely underfunded to date.

We would also like to see funding for women founders continued and extended to other underrepresented groups to increase diversity in the innovation ecosystem.

Mark Perry

Chief Customer Officer, Biza.io

More for open finance and to embrace the digital economy

It is clear that the government is committed to investing in digital strategies to align Australia with other leading markets, such as the UK, when it comes to data sharing.

Consumer data law is the backbone of Open Banking and Finance and will transform the telecom and energy sector in the coming years. This is a good thing for everyone as consumers have more choice and competition increases.

However, what we really need to see is further investment to get the mechanics right. It’s no secret that the rollout is somewhat fraught with speed bumps.

More funding for the digital economy portfolio to improve government communications is critical to the success of the CDR. We need more education about what the CDR is, what the benefits are for consumers, and what businesses can expect from the process.

In addition, we need better processes around rule changes.

Currently, it’s up to companies to sift through hundreds of thousands of lines to identify minor changes in specifications.

An investment in clear, concise government communications would mean businesses can spend more time innovating and building robust, functional solutions. Many companies, especially the smaller data holders, simply don’t have the manpower to do everything.

Noel Allnutt

Director, securo

Noel Allnutt

Greater investment in cybersecurity

In the run-up to this year’s budget and federal elections, we’ve seen positive signs that the government is finally recognizing the critical need to invest in Australia’s cybersecurity defences.

Recently the Home Office launched an $89 million center specifically tasked with preventing cybercriminals from defrauding, stealing and defrauding Australians.

Any greater investment in tactical and educational tools to fight cybercrime is a good thing for everyone. That said, just one of the nuclear subs we bought from the US cost us nearly $9 billion, far less than the $89 million spent on the cybersecurity center.

Perhaps we could have done without one of these submarines and invested it instead in what is currently Australia’s fastest growing frontline: the cyber war.

While any money invested in cybersecurity should be applauded, what we really want to see is a focus on arming Australian businesses and consumers with the knowledge and tools to prevent cybercrime itself.

Maybe we could use that $89 million to provide free password managers or anti-phishing software to every Australian adult instead of making fun of cybercriminals.

Nigel Fellowes Freeman

CEO and founder, Kanopi

Headshot by Nigel Fellowes-Freeman

Speed ​​up R&D payments and clarify and simplify additional grants

The Australian R&D tax incentive is on the right track. More could be done to speed up payments once the forms are submitted. It currently takes up to eight weeks for payment to be processed and since it takes nearly four months to collect the paperwork for this, it is a nearly six month process.

Perhaps the bigger downside is that R&D incentives currently feel like they’re the only form of federal government support for the industry. Grants and other benefits offered are ad hoc, difficult to understand and even more difficult to apply for. Further steps should be taken to increase the clarity of these other programs so that startups clearly understand what they can and cannot apply for.

Funding and a working group to accelerate the rollout of the CDR

How long have we been talking about the roll-out of Consumer Data Law (CDR)? It’s been nearly two years since it was announced and yet there are very few consumer applications on the market for the policies and technology that underpin it. If this budget is to focus on the cost of living, it would be remiss if it completely ignores the CDR as it was previously cited by the federal government as one of the biggest catalysts for business competition in Australia.

This reform will have a major impact on the insurance sector. It will come into effect for us next year, but at this rate, that seems unlikely.

We need to get to the bottom of why progress on this has stalled, perhaps through a working group of industry and government agencies, with the primary goal of rolling out CDR services by 2022 – or at least explaining why it is. delayed.

Improve tech talent migration process

The pool of technical talent in Australia is terrible. It is currently the biggest challenge for the sector. It drives the market rate of salaries above the limit of what a startup can afford, eventually slowing growth and potentially closing businesses across the country.

The obvious solution to this is to encourage the migration of technical talent from abroad. There are also plenty of talented people who want to work here. But the process of transferring them is expensive, time consuming and full of bureaucracy. We’ve been trying to get someone from Singapore to work for us, it’s been seven months now and we’re only halfway through the process.

Australia is currently lagging behind in its net migration projections due to COVID-19, and as a result, the bottleneck of talent shortages is being felt across all sectors. There will likely be a national response to this in the budget, we can only hope it includes the startup and technology sector as this is the next driver of overall economic growth.

Alok Kulkarnic

DIRECTOR, Cyara

Alok Kulkarnic

Cyara co-founder and CEO Alok Kulkarni

Creating the Great Silicon Reef

Australia has had several successful startups that have scaled up on a global scale, but much more needs to be done to nurture the next generation of Australian innovators and entrepreneurs. That starts with a change of mindset.

We should see Australia as a hub for technology makers, as opposed to technology users. More government investment in the Australian startup ecosystem has the potential to spawn the next round of innovations, just like in Silicon Valley. Now is the time to invest in the Great Silicon Reef.

This type of funding would support the creation of incubation centers where companies can operate when they are first launched, so they can share ideas and thrive at an early stage. The fiscal incentive for government R&D also needs to be reviewed and revised, as not all R&D starts from scratch.

There are many companies that build on and develop existing innovations, but these are not covered by the current incentive. Rather than limiting government support to new innovations only, it should broaden its scope and allow for greater flexibility.”

Cultivating a STEM workforce

While the federal government has financially supported the creation of a skilled workforce, much more needs to be done to build a STEM workforce.

We saw the Australian tech industry crippled by talent shortages during the pandemic as international borders closed and Australian companies survived on a small pool of local workers. Being able to enrich a team with talent from abroad is what makes the Australian technology sector great. However, relying on international workers to fill a void left by a lack of native talent is not a long-term solution.

We need to start nurturing a genuine interest and passion for STEM subjects among Australian high school students, and we also need to encourage more girls to venture into STEM. This can be in the form of more scholarships and training opportunities for students. Funding should also be available to retrain existing workers and provide support to Australians looking to transform their careers in the technology sector.

Support for workers in rural and regional Australia is often overlooked, but the pandemic has changed the way workers work and proved they can work anywhere. With better infrastructure in regional Australia, such as investments in high-speed broadband and improved mobile connections, more companies will be able to hire people from across the country, regardless of where they live.

Enterprise Share Scheme (ESS)

The government should provide more flexibility in the Enterprise Share Scheme (ESS), including making it easier for smaller companies and startups to realistically offer their employees shares and more rights, without restrictions, and better tax treatment.

This has the potential to be a game changer when it comes to retention and productivity in a tight job market, especially since startups often don’t have the resources to match the competitive salaries of large companies.

And if the stock eventually becomes worth something, the government wins thanks to tax breaks.

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