Turnbull government’s agenda includes new business initiatives, such as tax-breaks for start-ups, which intend to drive economic growth and create new jobs
A suite of new business initiatives, including tax breaks for start-ups, under the Turnbull government’s innovation agenda will help drive growth and jobs, Treasurer Scott Morrison says.
The government is reforming insolvency laws, knowing entrepreneurs can fail several times before they succeed, and the tax breaks for start-ups guard against tax losses should a business change its activities once it is up and running.
Mr. Morrison says that the agenda builds on the government’s responses to the Harper competition policy review and Murray financial system inquiry, and that the next step is building a more innovative and agile economy.
‘Our focus is on giving Australians confidence they can continue to work through the transition of our economy and ensure their families will be better off,’ the treasurer said in a statement.
The new measures include:
- Tax breaks for early-stage investors in start-ups that will receive a 20% non-refundable tax offset based on the amount of their investment, as well as a capital gains tax exemption
- Introduction of a 10% non-refundable tax offset for capital invested in new early-stage venture capital limited partnerships, and increasing the cap on committed capital from $100 million to $200 million.
- Relaxing tax rules surrounding losses if a company changes its business activities to allow a start-up to bring in an equity partner and secure new business opportunities without worrying about tax penalties.
- Removing rules limiting depreciation deductions for some intangible assets – such as patents – to allow them to be depreciated over their economic life, as occurs for other assets.
- Reforming insolvency laws in the knowledge entrepreneurs sometimes fail several times before succeeding, and reducing the default bankruptcy period of three years to one, and firms will be allowed to enter a legal ‘safe harbour’ to develop a turnaround plan.