Australia has a new Prime Minister (PM), our sixth in 10 years, and everyone is wondering if the the former Treasurer will continue being an ally of startups and SMEs.
Scott Morrison's history waves a couple of red flags for startups and SMEs, but entrepreneurs and managers should be optimistic for ScoMo. The good outweighs the bad.
Let's start with the elephant in the room, ScoMo's reshuffled ministry leaves Australia without a dedicated Cyber Security Minister. Cutting a ministry focusing on digital technologies in 2018 is a bad look. (Apparently, responsibility for cyber security policy is being absorbed by the Minister for Home Affairs.)
On the other hand, digital transformation
has been elevated to a full ministry: Michael Keenan is now Minister for Human Services and Digital Transformation.
Losing cyber security is a shame, but gaining digital transformation is a big win for innovation and technology.
As a software company digitally transforming how we create software by giving individual employees and domain experts within business the tools they need to take control of their own software (and destiny), we're about ready to get out the party poppers!
ScoMo has declared the drought as his number #1 priority, which is fair if you ask us. (His 2018 budget didn't include increases to drought relief, so clearly he's playing catch up.)
Australia's peak advocacy group for startups, StartupAUS, has criticised ScoMo's budgets for lacking focus on innovation and entrepreneurship. The top concern startups and SMEs have with ScoMo's budgets is the continued absence of any increases to the Research and Development Tax Incentive (R&DTI).
The good news is the ABC's 'winners and losers' reports have repeatedly declared small businesses a winner ScoMo's budgets. The continued extension of the $20,000 instant asset write-off is a key driver behind ScoMo's strong scorecard for small businesses. These budgets also cut taxes (starting with small businesses) and red tape.
A black spot on ScoMo's record is the 2017 FY budget's changes to HECS-HELP and working visas
, which cut back on education spending and increase the cost of hiring foreign workers. For Australian technology companies facing fierce competition from Silicon Valley, China, India, and elsewhere, a smaller hiring pool is potential risk. Admittedly, this risk is partially offset by the introduction of a new visa system for foreign workers: the Temporary Skill Shortage visa.
Overall, ScoMo is a bit of mixed-bag, but one we're optimistic about. We believe the cutbacks are more than balanced by other initiatives, particularly the instant asset write-off.
But what about Canberra, which is shaping up to be our very own King's Landing?
To get a better sense of where we're going, let's step back and cover how we got here.
Because of the double dissolution election in 2016, Australia has two separate election deadlines in 2019:
- half of the Senators no later than 18 May 2019
- the remaining Senators and all of the House of Representatives no later than 2 November 2019
These elections can be held simultaneously in early 2019.
The federal budget is normally delivered around May, which means it's unlikely ScoMo will have the opportunity to deliver one before first going to the polls.
We assume this means no major policy initiatives are on the horizon.
Scott Morrison is probably good news for most startups and SMEs. There are a couple of red flags, such as decreasing education spending and restricting working visas. Both of which will restrict access to high skill workers, such as software developers.
But then there's a good stuff.
For many startups and SMEs, downsides like higher education costs more are balanced by the immediate gain generated by the $20,000 instant asset write-off and tax cuts.
We're also excited by digital transformation being elevated to a full ministry.
We can see no reason for startups and SMEs to have FOMO (fear of missing out) based on ScoMo's history and ministry. The PM is shaping up to be a strong supporter of startups & SMEs.