It has been widely recognised that the future of Australia’s economy lies with harnessing the population’s intellectual capital as the nation transitions away from an economy reliant on the once booming resources sector. Research and innovation has thus arisen as an important election battleground, whether indirectly through channels such as the NBN, education reform and small business incentives, or directly in the form of government funding and subsidies.
So how exactly does each major party plan to tackle this issue of research and innovation?
The Liberal Party:
The Turnbull Government has pledged $1.1b in funding over the next four years as part of their plan to invigorate Australia’s research and innovation sector. This has been designed to spark a so called ‘ideas boom’ as a key economic driver in the wake of the mining boom.
The package notably consists of generous tax incentives for investments in start-up businesses, intended to enhance the ability of start-ups to attract capital from high net-wealth individuals, known as angel investors.
Furthermore, proposed amendments to insolvency laws intend to relax regulations that have heavily penalised failed start-up ventures. This includes cutting the lockout period in which directors of bankrupt companies cannot start a new company from 3 years to 1 year, thus encouraging entrepreneurial behaviour.
$100m has also been provided to improve educational standards in the fields of STEM and digital literacy, as well as $14m dedicated to encouraging stronger representation of females in the STEM sector.
The Australian Labor Party:
The Opposition has focused heavily on human capital and education as the requisite foundations for driving innovation and economic growth. As such, they have pushed for greater prominence of STEM in all levels of education, through teaching scholarships as well as HECS write-offs for 100,000 tertiary students. Furthermore, the Opposition has pledged to push the introduction of coding into the primary and secondary curriculum of Australian schools.
Labor has also announced plans to establish the Smart Investment Fund, a $500m co-investment vehicle designed to pool funds with venture capitalists to provide much needed capital to budding, high-potential companies. The Investment Fund has hopes of replicating the success of the Innovation Investment Fund, a predecessor set-up by the Howard Government to which the conception of the online job-seeking giant, Seek.com, has been attributed to.
With a proposed $5b to be dedicated to revitalising Australian research and innovation sector over the next four years, it is clear that the Greens are the strongest proponents of fuelling an innovation-driven ideas boom. The proposed expenditure is to be funded by redirecting a portion of the $12b in subsidies the mining industry currently enjoys.
The expenditures largely involve reversing previous budget cuts to research, including CSIRO funding and R&D offsets ($996.5m), as well as significant funding increases for research grants and for the promotion of STEM uptake in schools and universities.
Although it would be unimaginable for the incentives proposed by the Greens to materialise in their unadulterated form, it should be interesting to see whether concessions to some form of middle ground may be made given the slim margins that pre-election polls have evinced.