The Australian Chamber of Commerce and Industry welcomed the release this week of the Federal Government’s Industry Innovation and Competitiveness Agenda and its focus on four overarching ambitions aimed at fostering entrepreneurship and making it easier to do business in Australia.
This included the change to Employee Share Scheme arrangements that will now see options taxed when they are converted to shares, giving a tax exemption for start-up companies.
ACCI director of Economics & Industry Policy, John Osborn, said: “The agenda recognises that entrepreneurs and business are the real drivers of prosperity and that the role for government is to remove barriers to innovation and competitiveness.
“The government looks to have thankfully avoided the trap of proposing subsidies or direct market interventions that attempt to pick winners. This is where industry policy can go wrong.
“One stand-out win for entrepreneurs and start-ups is the reversal of changes to Employee Share Scheme arrangements that will now see options taxed when they are converted to shares and not when an employee receives them.
“The changes made in 2009 by the then Government had seriously negative ramifications for entrepreneurs who could no longer use options to attract necessary talent into start-ups. To their credit the now Opposition has publically recognised the failure of those changes.
“We can no longer let the tax system starve our small business start-ups of the critical cash flow they need to grow and reach critical mass.”
The ACCI said that it’s important to remember that innovation is predominantly a dynamic firm-level process that can come from anywhere at any time, so we cannot afford to be too prescriptive.
Australian Chamber of Commerce & Industry