The Federal Budget has brought little good news for innovative companies that are developing technologies and securing Intellectual Property Rights.
The only new initiative outlined in the Budget is the allocation of a further $378.6 million dollars to the Venture Australia Program. Of this funding, $25.4 million will be handed to the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education to administer the Program.
The majority of the money, $350 million, will be used to fund a new round of the Innovation Investment Fund. The Program requires matched dollar for dollar funding from the private sector. The leftover, $3.2 million, will go into the promotion and marketing of Australian start-up success stories.
According to Joe Seisdedos, Wrays Group Head - Sydney, while these amounts may seem reasonable, the money will be spent over 15 years, meaning that, averaged over the lifetime of the Program, about $25 million will be spent per year – a drop in the bucket for start-ups and technology businesses.
The government faces a tough call on spending with a sharp fall in company tax receipts, a decline in commodity prices and a lower than expected revenue from the carbon and mining taxes. This year's budget presented the opportunity to incentivise new, technology and innovation driven companies, who would become the powerhouse of future economic growth and tax revenue.
"There is no acknowledgement of the vitally important role the development and ownership of Intellectual Property plays in driving economic growth and the creation of sustainable jobs," says Mr Seisdedos. "The UK has implemented a program to reduce company tax rates for companies that derive income from patents held by UK entities, where the income 'washes through' the UK. Australia, with our relatively strong economic conditions, has a wonderful opportunity to develop and implement similar policies, to attract and grow technology businesses, yet this budget fails to provide any real incentive for business to focus on technology or Intellectual Property."