Budget should deliver more innovative & competitive Australian economy
Wednesday 7 May 2014
Next week’s federal budget should be framed around policies that help support a more innovative and internationally competitive Australian economy, according to the Australian Private Equity & Venture Capital Association Limited (AVCAL).
“There has been a lot of focus in the last few weeks on how costs can be stripped out of the federal budget, but that’s only part of the answer to addressing the fiscal challenge confronting our economy,” said AVCAL Chief Executive, Yasser El-Ansary.
“The other part of the solution is to lay out a plan for how government can encourage more business investment in innovation, and how roadblocks that constrain the flow of capital into businesses can be taken away to help improve our competitive landscape.”
“If we can unlock the growth potential of businesses, you’ll see that translate into more tax revenue flowing through to the federal budget,” according to Mr El-Ansary.
“When you look at our global competitiveness position, Australia currently ranks number 15 in the group of 34 OECD countries [based on the World Economic Forum’s Global Competitiveness Index], and in order for us to lift our productivity and economic growth we are going to have to invest more in innovation,” he added.
AVCAL’s 2014-15 pre-budget submission set out a range of reform priorities geared towards increasing domestic and foreign investment into Australian businesses. The key budget policy measures in the submission include:
- Putting in place a long-term innovation investment program;
- Reforming tax rules for venture capital limited partnerships;
- Initiating a post-implementation review of the Stronger Super reforms;
- Releasing the Board of Tax report into collective investment vehicles;
- Expanding the significant investor visa regime, and
- Simplifying the employee share scheme tax rules for start-ups.
“There is a lot the government should do next week – which won’t come with a significant cost against the federal budget – to help boost private sector investment into Australian businesses. The highly competitive global race for capital and skills means we have to take every opportunity we can to put in place policies that set us up for long-term success,” said Mr El-Ansary.
A copy of AVCAL’s 2014-15 pre-budget submission can be downloaded here.
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Author: Adrian O’Shannessy, Director, Greenwoods & Herbert Smith Freehills
Author: Dr Kar Mei Tang, Head of Policy and Research, AVCAL