15 March 2016

Turnbull Government introduces tax incentives to boost growth and jobs

The Turnbull Government will tomorrow introduce a suite of measures into the Parliament which will help drive investment, economic growth and jobs in our transitioning economy by encouraging innovation, risk taking and an entrepreneurial culture in Australia.

The Tax Laws Amendment (Tax Incentives for Innovation) Bill 2016 introduced tomorrow includes:

  • The Tax Incentive for Early Stage Investors - giving concessional tax treatment to investors to promote investment in innovative, high-growth potential start-up companies. This will boost growth by fostering new enterprises and promoting entrepreneurship with  a twenty per cent non-refundable carry forward tax offset on investments in qualifying companies, capped at $200,000 per investor per year; and a ten year exemption on capital gains tax, provided investments are held for 12 months or more.
  • The New Arrangements for Venture Capital Limited Partnerships - delivering changes to the tax treatment of Early Stage Venture Capital Limited Partnerships (ESVCLP) to attract more investment into venture capital. Through this measure, investors will receive a ten per cent non-refundable carry forward tax offset on capital invested through an ESVCLP. In addition, the maximum fund size for new and existing ESVCLPs will be increased to $200 million with a number of reforms made to the income tax treatment of venture capital more generally.

The Government has been listening carefully to stakeholders during the development of these measures. We have consulted widely with investors, industry bodies, universities and the start-up community to  incentivise innovation and reward greater risk taking, while also maintaining the integrity and sustainability of the tax system.

The measures are part of the Turnbull Government’s $1.1 billion National Innovation and Science Agenda (NISA) that will broaden and diversify the economy through economic policies to build growth and increase the productive capacity of Australia.

The NISA fosters an environment that incentivises and rewards innovation, science and taking risks to succeed and is critical to building a more innovative and agile economy.

Backing innovation to drive productivity is part of the Turnbull Government’s economic plan to successfully manage our transition. Unlike Labor, the Turnbull Government knows that our transitioning economy requires increased investment and we will build the conditions necessary for that investment.

This is another practical example of how the Turnbull Government is acting to support the positive transition that is taking place in our economy.

More information on the NISA is available at: www.innovation.gov.au