The federal government will be coming in hot with a fresh budget on Tuesday, which means there’s a lot of opinions floating around regarding what should be in there.
Now we know a few things already thanks to some strategically timed pre-budget announcements. Labor has also warned the nation that it won’t be a “fancy” budget, citing global economic strife for its impending frugal approach to the country’s purse strings.
But that hasn’t stopped speculation and opinion on what should be included in the budget for 2022-23. So we chatted to some Aussie startup founders to find out what was most important to them for the new budget.
And a few common themes cropped up.
Budget support for women in the workforce and female founders
There was a strong call for more support of women in the workforce, as well as female founders, in the budget. Some recent numbers from Cut Through Ventures strongly highlight why this is a priority.
In the past three months, 12% of capital raises have gone to mixed-gender teams, with 8% going to all-female teams. Deal participation during that time consisted of 9% mixed-gender teams and 13% all-female teams.
Comparatively, 80% of capital raises have gone to all-male teams during that time, with 78% being involved in deal participation.
There were some other stark statistics from some of the founders we talked to
Trenna Probert, CEO of Super Fierce:
“Anthony Albanese campaigned heavily on ‘being on women’s side’. So we hope he will put his (budget) money where his mouth is during Tuesday’s announcement.
“As an example, the benefits of the Stage 3 Tax Cuts currently fall 68% to men and 32% to women. This is because the cuts mostly benefit the wealthy — most of whom are men — so they will almost certainly help to worsen Australia’s gender wealth gap if they proceed unchanged.
“We would like to see the Prime Minister take four simple steps to shift these tax measures so they support lower income earners, reduce the gender wealth imbalances inherent in our taxation system, and save the budget some money too — we really can have it all!
“Firstly, the government should scrap the Stage 3 increase of the top threshold from $180,000 to $200,000 and, secondly, it should increase the top marginal tax rate from 45% to 47%.
“Thirdly, the government should scrap the Stage 3 reduction in the 32.5% tax bracket to 30% and, finally, it should lift the tax-free threshold from $18,200 to $22,000.
“In this scenario, our lowest income earners would enjoy the greatest benefits and there would be no net benefit to those above $180,000.
“Combined, these four steps would increase the benefit to an individual on $40,000 per annum (the median part-time income for a woman) from no benefit to $1050 per annum, representing a much-needed 3.5% increase in take-home income.”
Sarah Moran, co-founder and CEO of Girl Geek Academy:
“With Minister Husic committing to assessing all federal government Women in STEM initiatives for their effectiveness, it’s unlikely we will see any new funding committed to programs in this budget. This will 100% have an impact on the Boosting Female Founders initiative over the next 12 months.
“However that’s not necessarily a bad thing given how questionably the program was run under the past government — a review is fundamental to ensuring government-funded programs aiming to increase the number of women in STEM and women-founded startups actually address the problems women face (sexism, fatigue, a gaping gender pay gap, dissatisfaction with remuneration rates, low levels of seniority and cost-cutting).
“In the meantime, there are gender equality initiatives that will support women founders more broadly and as a starting point, I’d like to see the commitment to increase Paid Parental Leave fully funded immediately.
“When funded to 26 weeks including necessary ‘use it or lose it’ partner pay, this initiative will be a fresh boost to reducing some of the barriers women in tech face, with benefits including an increase in women’s lifetime earning potential, closing the gender pay gap, better relationships between children and both of their parents and boosting the Australian economy by billions of dollars with increased women’s workforce participation.”
Rachael Evans, founder and CEO, The Workshop Whisperer and Brave Media Network:
“I’d like to see a boost to government grants for female-founded businesses with a quota system — just over 2% of global venture capital globally is invested in female-owned startups.
“Also, more educational funding for female founders on how to better position themselves to pitch and apply for venture capital and investment in new female mentorship programs to help democratise the access and make it easier for female founders who have been successful and share the steps with the next generation of tech founders.
“It reflects the idea ‘You can’t be what you can’t see’.”
Budget support for STEM education and careers
Several founders also wanted to see more support for STEM careers in Australia. Their belief is that this can be bolstered not only by supporting early education in STEM topics, but also attracting skilled workers from overseas.
Tristan Sternson, CEO of leading digital tech services company ARQ Group:
“It’s great to fund new university courses and talent, but to get to 650,000 new jobs we need to think differently. We need to attract new job reskilling not just graduates, and at the same time, invest more in schools and curriculum to ensure kids finish school seeking careers in tech.
“To increase the talent pool we need to move beyond the major cities and look to regional areas. There is a pool of people we can reskill and areas to turn into technology hubs. To attract companies to train people in these areas, there will be an inherit cost of setup and logistics as part of distributing their workforce further. This is a great idea, but it would be great to see some financial incentives that help companies set up their regional hubs.
“We also need digital technology to speed up the Visa process to increase immigration. We should invest in intelligent automation such as Robot Process Automation to halve the time of this process and spend money on the technology rather than just on people to process the visas. We should also consider a new class of visa for urgent tech skills.”
Amit Choudhary, CEO and co-founder of saasguru:
“From our point of view, it’s all about a skilled workforce in technology. The three things we would want are to make it easier for companies to access tech-skilled workforce from overseas and incentives for companies to invest in developing skills in-house in emerging technologies.
“Lastly, we should align the curriculum in schools/unis with the tech skills of the future.”
Michael Bromley, CEO of Stone & Chalk:
“We would like to see more public investment in innovation ecosystem builders to support the development of an inclusive innovation career path for all Australians. We would welcome government assistance directed towards experts that can enable this (and avoid government having to pick winners). We would like more of a national focus and long term vision for a sustainable tech-driven economy. A strong national innovation ecosystem will lead to more job opportunities and enable Australian businesses to become more globally competitive in the long term.”
More grants, support and tax cuts for tech startups
Another common theme amongst founders was more grants, support and tax cuts for startups, particularly in the tech space. There was also discussions of more support for under-represented people in the space.
Tim Noakesmith, founder and chief product officer of Vow Food:
“Australia has proved itself an incredible hub for deep tech research, but to date has struggled with effective commercialisation. Grants and tax cuts for early and growth-stage deep technology companies will incentivise the right entrepreneurs to stay here and invest in the country’s talent pool. ”
Shivani Gopal, founder at ELLADEX (formerly The Remarkable Woman):
“Bringing back a Turnbull-style innovation agenda in the current climate would be a smart move in this round of budgets. Turnbull rightly said in 2019 that innovation is ‘key to productivity, and to the economy’ and this has never been more true post-pandemic. Scrapping the role of Innovation Minister was a real setback for Australian startups.
“A few years ago, the Australian Government would match funds for startups who successfully raised capital. This enabled Australian founders to accelerate their startups and compete against international ventures that have a thriving venture capital community.
“We also need to see the creation of tax concessions that actually benefit startups who are not yet in profit. Every budget creates tax write-offs for business in some way, as we’ve seen, but most startups won’t make a profit for the first 2 years at least, so how are they expected to compete and survive the most challenging years in business?”
Dean Arnold, Founder and CEO of PublicSquare
“Rather than layering on new incentives and distractions I would like to see a focus on reducing existing time and cost overheads. In other words, do the things that make it easy for founders to build products and services of value rather than business building or administration. There’s a reason why businesses are constantly calling for reduced red tape and increased efficiencies – because it stifles business development and hurts small business. But this requires more than tinkering around the edges. It needs a purge.
“Finally, we must stop taxing away innovation. Certain products and services can’t come to market because of one-size-fits-all tax treatment.”
Alan Jones, interim CEO of Australia’s original startup community, Fishburners:
“In my 30 years in the tech industry, I’ve never seen a more popular Australian federal minister in the science and technology portfolio than Ed Husic.
“The most exciting budget proposal we’ve seen so far is the ‘Startup Year’ initiative, which will help 2,000 students spend a year launching a startup via a university accelerator, instead of taking the traditional gap year.
“When you combine this with the government’s plan to fund 20,000 university places for disadvantaged and marginalised Australians it becomes really interesting.
“Imagine if a sizable proportion of this cohort then went on to participate in the Startup Year initiative as well. The resulting startups could be absolutely life-changing for some of Australia’s most under-represented groups.
“But it must also be remembered that, contrary to Hollywood’s depiction of Silicon Valley, most successful Australian tech startups are founded by entrepreneurs in their mid-to-late 40s.
“This age group is under financial pressure from rising interest rates, child care costs, flat wages and inflation right now. A similar loan scheme to Startup Year could make a big difference in encouraging this demographic to take a tech startup career change risk.
“Finally, we support growing calls for changes to the definition of a sophisticated investor to increase access to tech startup investing for all Australians. We also welcome any changes that provide tax incentives for angel investing in early-stage tech startups, in particular the need to allow non-redeemable convertible notes under the current ESIC rules.”
This article was first published by SmartCompany.