'Ideas boom' to drive the Australian economy: Turnbull

Malcolm Turnbull is looking to an “ideas boom” to be the new source for Australia’s growth, prosperity and jobs now the mining boom has faded.

Launching the first big policy of his prime ministership, a “national innovation and science agenda” costing $1.1 billion over four years, Turnbull declared he was seeking to make a big cultural shift, where risk taking was embraced and failure was not feared.

Nearly half the spending - $459 million – locks in funding for national research infrastructure, including the National Collaborative Research Infrastructure Strategy facilities, the Australian Synchrotron, and the Square Kilometre Array. This funding would be $2.3 billion over a decade.

Initiatives will encourage start ups, including a 20% non-refundable tax offset for investors, as well as a capital gains exemption.

The policy has big implications for the university sector, with a refocusing of research block grant funding towards promoting collaboration between academia and business.

As part of the effort to lift Australia’s research-industry collaboration – currently the lowest in the OECD - the government will support greater private sector investment by co-investing to commercialise promising ideas through a CSIRO innovation fund and a Biomedical Translation Fund.

The government will put $70 million into the $200 million CSIRO fund and provide $250 million for the Biomedical Fund. Neither are in the costings because they are off-budget.

Reform of the insolvency laws, which the policy says “put too much focus on penalising and stigmatising business failure”, will reduce the default bankruptcy period from three years to a year, and provide a “safe harbour” for directors from personal liability for insolvent trading if they appoint a professional restructuring adviser.

Turnbull said that even if a new venture failed “you may have lost some money, your investors may have lost some money, but the overall economy massively benefits because you are wiser, your employees are wiser, your investors are wiser, everyone’s learnt something and the ecosystem benefits”.

The talented and the innovative will be encouraged to Australia by a new entrepreneurs visa and foreign students graduating with advanced degrees in STEM and communications technology areas will be encouraged to stay here.

Extra resources will be put into STEM and computer education, and emphasis will be given to supporting the greater participation of girls and women in the research sector, STEM industries, start ups and entrepreneurial firms.

Government procurement policy will be used to make it easier for innovative small and medium businesses to vie for government work.

How the measures in the statement will be financed is not spelled out. No savings were specified.

A cabinet committee on innovation, chaired by Turnbull, will be set up. He said a critical theme of his government would be always to be driving innovation.

There had “never been a better time to start and grow a business from Australia, which can now compete for customers located anywhere in the world,” Turnbull said.

He said the policy statement “is not just a list of measures and incentives and the levers that governments pull - this package is designed to inspire. It is designed to lead. It is designed to encourage every single business, large or small to be more innovative, to be more prepared to have a go at something new.” It would “incentivise, dynamise, energise”, promoting “a national culture of innovation, of risk-taking”.

Turnbull said he was not guaranteeing that all the initiatives would be as successful as the government hoped. He was seeking to change the old politics where politicians felt they had to guarantee that every policy would work. The government would monitor them and do more of what worked and less of what did not. A 21st century government “has got to be as agile as the start-up businesses it seeks to inspire,” he said.

Business groups welcomed the package.

The Australian Industry Group said the policy “sets out decisive and positive steps towards creating the economy and jobs of the future”.

The Business Council of Australia said it was vital that the initiatives outlined were “complemented by improvements to economy-wide policy settings, including tax reform, the workplace relations system and the competition and deregulation agenda, which are fundamental to boosting Australia’s investment, innovation and productivity performance”.

But the ACTU was more sceptical and said the government’s announcement had ample mention of business but “the workers pivotal to these new industries were barely mentioned”.

“Unions also have concerns about proposals for capital gains tax exemptions being rorted, changes to bankruptcy rules which could leave workers and creditors out of pocket and, rather than a focus on overseas worker visas, we should be developing our local skilled workforce.”

Universities Australia welcomed that the statement recognised “the critical role of Australia’s nationally-significant research infrastructure”.

“These are the facilities that underpin Australia’s research capability. Without strong funding to keep them current and world-leading, our place in the world becomes more vulnerable.”

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.