Budget 2014: Innovate and invent says Joe Hockey, but on your own

Delivering his first budget, Hockey maintained that one of Australia’s greatest strengths as a nation “is our capacity to innovate and invent.”

Clearly this innovation and invention is something Hockey expects startups to survive on, delivering significant cuts to the limited funds and programs that have offered the industry assistance over the years.

“The Government will start by abolishing a range of industry assistance programs, saving over $845 million,” Hockey says.

“We will refocus our effort on innovation and self-reliance.

“Businesses should stand or fall on their ability to produce the goods and services that people will actually want.

“To improve business opportunities, we are cutting company tax by 1.5 percentage points for around 800,000 businesses.”

The budget delivered some blistering news for those waiting to hear the fate of Commercialisation Australia. Along with the Innovation Investment Fund, and a number of other funds and programs, they have been rolled into a new Entrepreneurs’ Infrastructure Program, with a significantly reduced budget.

The fate of CA has been in the air since grants were frozen a few months ago in anticipation of the budget. The abolishment leaves companies who have invested a lot of time and money in the prolonged application process for CA grants, significantly out of pocket.

R&D tax incentives have also had a reduction, with the government saying these were relative to the cuts in the company tax rate, reducing the rates of refundable and non-refundable offsets by 1.5 percentage points.

Also in the government sights is NICTA, responsible for a number of successful Australian technology-focused startups, which will receive government funding for the next two years before it is expected to be self-funded.

There was some better news on the legal front, with small businesses to get the same protections as consumers when it comes to unfair contracts imposed on by big business.

The legislative reforms will make unfair terms in standard form contracts with small businesses void. This is expected to provide a level playing field for small businesses.

On exports, the government is also delivering a $200 million in cash capital to the Export Finance and Insurance Corporation to support small and medium size businesses to successfully grow their exports.

“Mining and resources represent about 10% of our economy but two percent of our employment,” Hockey says.

“It has, however, done much of the heavy lifting over the decade. So now we need to fire up the rest of the economy.”

Indeed. Though it seems where startups are concerned, the government certainly won’t be handing out any matches. Time to get out the sticks and stones.