KPMG Australia today welcomed the Federal Government’s innovation statement as a positive step forward on the journey to achieving Australia’s innovation potential and becoming globally competitive.
Peter Nash, National Chairman said: “As the Government has recognised today, innovation is not just about startups. It’s also about transformation and new thinking in existing businesses. Critically it’s about businesses staying in Australia and engaging with disruptors. Collaboration is key. It’s not been our natural strength and we need to lift our game. If we don’t meet this challenge business will move elsewhere, intellectual property will be licensed rather than owned by Australians and our long term growth as a nation will be impacted, with severe consequences.”
“We welcome this new focus, the realignment of what we do now and the critical adjustment to our policy settings on incentives and taxation.”
Ken Reid, National Managing Partner Brand & Innovation, believes the statement is a tipping point for Australia to begin ‘walking the talk’ on innovation culture. “We need to turn our entrepreneurs into super heroes,” he said.
“This applies to the winners and heroic failures. As I travel and talk to clients in other parts of the world there are some common themes that emerge about how Australians in business are seen – hard working, creative, problem-solving and fun. These are essential traits for an innovation culture, and with this new focus from Government I am convinced we can be globally competitive,” he added.
Grant Wardell-Johnson, Partner, Australian Tax Centre, KPMG said: “The tax and business incentives outlined today will be a boost to innovation. While the amounts of money involved are fairly low, they will make a difference. We look forward to seeing how this fits in the overall tax reform package next year, where we would like to see consideration also given to the creation of an Innovation Company, which would be able to monetise tax losses and hence attract investment from high net worth individuals.”
“This would help address the funding problems at the $2million-$40million from which many start-up companies suffer,” he added.
David Gelb, National Leader, R&D and Tax Incentives, KPMG said: “The maintenance of the R&D tax incentive is welcome in an overall exciting package.”
“It is good to see that the Government has recognised the importance of consistency and stability for those who rely on the R&D tax incentive to implement innovation. The creation of an independent body (Innovation and Science Australia) to provide strategic advice to the Government for the better planning and use of Australia's investment in research and development demonstrates an ongoing commitment to driving collaboration,” he added.
Matthew Woods, Head of Restructuring, KPMG Australia commented: “The proposed move to reduce the bankruptcy period to one year is in my view a common sense approach. Taking a bankrupt out of the market for three years is unnecessarily punitive. Sufficient protection already exists in the Bankruptcy Act for a Bankruptcy Trustee to seek to extend the bankruptcy period where the bankrupt is not complying with their obligations under the Act. It significantly discourages risk taking and also results in personal brand reputation and credit profiling which can continue well past the three years. The majority of business venture that fail do so because of circumstances other than the actions of the business’ owner/director.”
“I strongly support the introduction of safe harbour provisions into Australian Insolvency Law as a means for encouraging the pursuit of bona fide turnarounds of distressed businesses. This is a welcome move, though directors should not see any reform in this area as a means of diluting their director responsibilities.”
“The intent of the reform is to provide a safe harbour where directors can be guided by suitably qualified professionals through a restructuring process that has a reasonable potential to maximise the outcomes to all stakeholders. This strikes the right balance between encouraging risk taking by directors and giving protection to creditors from reckless insolvent trading.”
Bill Petreski, Director, KPMG Innovate said: “The government’s focus on capital in the Innovation Statement is most welcome for both potential investors and high-tech, high-growth, innovation active businesses. The most quantifiable outcomes come in the form of the tax incentives for early stage investors. This is an extremely positive step towards deploying Australia’s robust communities of investors, from angel investors to family trusts and family businesses.”
“The overall approach ensures the pillars are in place for an ongoing and active community of investors that will link in well with the other parts of the innovation statement that focusses on collaboration with the wealth of intellectual property and ideas emanating from our researchers and universities.”
Dr Helen Sant, Research & Development, KPMG Australia said: “The most striking feature of the Australian innovation landscape is the lack of collaboration between the university sector and business. There is a missing link here. More needs to be done to bridge the business and academic cultures. In the UK, Europe and the United States there is greater awareness of what business and academia are each doing.”
“But there are some major and exciting direct and indirect collaboration and commercialisation initiatives announced in the Innovation Statement aimed at encouraging closer work between universities, research institutions and industry. There is an underlying driver to ensure academia has a long-term goal of generating ideas that can bring commercial value to Australia. This new program, with its variety of incentives is a major change in direction for the government and is very encouraging for entrepreneurs of the future.”
Michael Wall, National Leader, Immigration, KPMG commented: “A sharp slowdown in the number of temporary 457 visas over the last two years has had a clear and adverse effect on the Australian economy. Visa programs can deliver workers to precisely where they are needed in the economy by businesses who are creating the wealth for our country.”
“Drawing talent from overseas will increase our connectedness with other markets and the intensity of our innovation clusters. Special priority needs to be given to bring Science, Technology, Engineering and Mathematics (STEM) skilled researchers and professionals and those with a clear entrepreneurial record.”
Michael Hiller, National Leader, Infrastructure & Government added: “The key will be co-operation across all levels of Government in a joined up way; and demonstration of genuine collaboration on the part of Government to work with industry to create the future – building on ideas, revisiting regulation, ensuring procurement approaches are flexible, and having a greater appetite regarding risk.”
“Underpinning all of this is the Government being prepared to commit to performance targets and regular review of performance. As noted in the Innovation Statement we need to create a culture that backs good ideas and learns from taking risks and making mistake – we would therefore expect that regular review of performance will result in the vision and policy settings being dynamic enough to appropriately respond.”
James Mabbott, Head of KPMG Innovate said: “We need to think big as entrepreneurs and aspire to be global. Our economy is not a closed system and so much of our success is dependent on our ability to participate successfully in the global economy.”
“The commitment from government to leading by example in terms of open data, start-up friendlier procurement practices, and offshore landing pads shows a recognition that the issues to be addressed are not just the responsibility of the commercial sector but systemic. There is also a real innovators mindset at play with a clear indication that the government is prepared to experiment, test and iterate to determine what will work.”
Elise Wherry, KPMG’s Head of education said: “Highly developed STEM skills will be required not only to deliver the research and technology that Australia will need to compete in the future global economy, but also to tackle the challenges that we face around natural resource management, the changing urban environment and sustainable growth. Taking a student-centred approach to learning is going to be essential. This involves tailoring education to individual needs throughout a student’s educational life-cycle. Think about the best customer experiences. Likewise our education sector has plenty of opportunities to explore how we can put the student and their needs at the centre to create a more engaging environment.”
“The advent of new and exciting technologies like 3-D printing and accessible robotics provide new in-roads to tap into the intrinsic motivation of young people to experiment and explore. This inspirational subject matter needs to be delivered through inspirational teaching methods.”
Head of Communications, KPMG Australia
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Senior Communications Manager, KPMG Australia
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Communications Manager – Innovation & Entrepreneurship, KPMG Australia
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This report provides our key insights from the 2015 Federal Government Science & Innovation Policy Statement.