The federal government has confirmed it is committed to completing reviews of key regulation hurdles for startups, such as the employee share scheme regulations and crowdsourced equity, launched by the Gillard Labor government in June.
The commitment, given by Industry Minister Ian Macfarlane’s office to reporters at The Australian, follows a call by Communications Minister Malcolm Turnbull who urged the government to think laterally about tax issues in January.
“We need to do more to encourage innovative companies in Australia . . . an obvious area is rectifying the anomalous treatment of employee shares and options in Oz,” Turnbull wrote at the time. “There is a lot of potential for crowdfunding-type models for aggregating venture capital. We need to think laterally on this critical issue.”
The commitment comes after the release of a detailed report with 23 recommendations for government action, released by peak body StartupAus last week.
“The government is continuing to review the current arrangements for employee share schemes,” a spokeswoman for Mr Macfarlane told The Australian. “The issues raised through this current consultation process will be addressed through the government’s industry investment and competitiveness agenda.”
The review so far has been met with goodwill tinged with some trepidation by leaders in the startup community, who are concerned the government and policymakers may not understand the challenges facing small, nimble and vulnerable companies they’re legislating for.
StartupAus board member Steve Baxter attended a private session with ATO and Treasury officials during the ESOP review.
He told StartupSmart it was reassuring the government was working hard to understand the issue.
“It’s good they want to understand start-ups, but I’m not saying they do,” Baxter says. “They’re a very large organisation and they get advised to almost exclusively by large organisations like the big accountancy firms. They want to help start-ups but they need to rethink them.”
The Coalition has also confirmed their commitment to a review of crowdsourced equity funding, with the spokesperson saying a report was due to the government shortly.
This is the first time the Department of Industry has confirmed its commitment to updating the rules complicating this increasingly popular fundraising method.