
Australian Government Should Follow Singapore in Supporting Startups - jaezen
http://www.forbes.com/sites/jlim/2014/05/21/australian-government-should-follow-singapore-in-supporting-startups/
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jlangenauer
One of the worst aspects of Australian business is its default to rent-seeking
in the face of any adversity. Look at the car companies and their blackmail
for handouts over the last decade. Look at Alan Joyce's recent attempt to get
a government debt guarantee for Qantas.

This attitude infects start-ups in this country too, though this article isn't
too bad. The demand for special tax treatment of start-up investors is
regularly made, and the demands for government grants is equally regularly
made.

Neither of these should be considered - the first from a position of mutual
obligation, where those investors who profit from startups need to contribute
to the society that makes those start-ups possible.

The demand for funding is best looked at by seeing what actually has been
funded by Commercialisation Australia grants, and - to put it politely -
there's not a lot of stuff there that is "commercial". Instead, there's a
museum of half-baked ideas that were able to cobble together a business plan
sophisticated enough to fool bureaucrats. My favourite, from memory, was one
for several hundred thousand dollars to develop software to help manage car
washes. Car washes!

(And by the way, the funding scene in Australia is vastly different from what
it was 5 years ago - seed capital is very much available from private
investors, even if subsequent round VC money is still a far harder boat to
catch)

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monochr
>One of the worst aspects of Australian business

The only way you can say this is you know nothing about the businesses in
other countries.

The reason why Australian car makers needed those concessions was because
America gave much bigger ones that made our industry non-competitive. Same for
airlines, Quantas is the Australian national carrier yet compared to companies
like Air France, Emirates, Lufthansa or British Airways it is left to fend for
itself much more.

To try and compete as a free market firm against companies with government
support is a recipe for bankruptcy or off-shoring, as our magically
disappearing car industry has shown.

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aurelian
I wonder how much Australian industry is affected by resource exports driving
up the currency making other exports more expensive and imports cheaper.

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hartror
It varies from industry to industry of course but it effect is huge.

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hartror
I look at what Norway has done with their oil wealth and compare that to what
Australia done to manage its mineral wealth and I cannot help but shake my
head in despair. Sure Australia isn't the same as Norway in many respects but
the fundamentals are the same. Ensure you collect and save a fair chunk of the
profits of your non-renewable resources for investing in a future that doesn't
involve hauling large amounts of rocks out of the ground.

~~~
vacri
The difference is that when Norway runs out of mineral wealth, they have
nothing unique to them (everyone can do a service economy), but when Australia
runs out of mineral wealth, there is still a very strong, growable
agricultural sector. Not saying that it's right - I prefer Norway's future
fund method - just that there's not a mineral-dependent economy with a
termination date in Australia.

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thmcmahon
Hi all - I work for Andrew Leigh MP, the Shadow Assistant Treasurer who is
responsible for Labor's tax policy leading up to the next election.

I'd be interested in hearing your views on what a future Labor govt could do
to support startups in Australia. If you'd prefer to email them,
thomas.mcmahon@aph.gov.au.

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monochr
Fix the internet. It doesn't matter how much it costs.

I have to wait a month to get our office connected to Optus, Telstra, iiNet et
al were just as bad, and as a small business that is killing our profit for
this year. I called them on the 10th this month and they will not have any
capacity until the 6th next month to connect anyone new. And this is in the
Melbourne CBD.

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jfoster
I've heard people suggest that internet access within AU is important for
startups, but could you explain why?

I think most AU startups would be targeting a global market, so the internet
in Australia is irrelevant for all but a small percentage of their customers.

On the other side, most startups now use cloud hosting with Amazon or Google.
So again the quality of internet access in Australia isn't very relevant.

In terms of getting work done, I think it's difficult to make an argument that
current internet speed is insufficient.

Don't get me wrong - faster internet would be lovely and I know that there are
other groups that would benefit, just not convinced that AU startups
specifically would benefit.

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c23gooey
First of all, its hard to build an internet business when you dont actually
have internet access.

Also, the vast majority of internet plans in Australia, provide very little
upstream bandwidth.

Your right, the market being targeted is irrelevant to the speed of internet.

With regards Amazon / Google, they need to get their files onto those services
in the first place. This ties into your point of getting work done.

When it takes a day to upload 1GB of data - business starts to suffer.

Faster internet, especially upstream would not change the quality of ideas
coming out of Australia, but it would remove a significant bottleneck in terms
of getting things done.

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jfoster
Everywhere urban in Australia does already have internet access. For that
reason, I don't understand your first point.

The upstream bandwidth isn't hampering any businesses that I am aware of, but
I agree that businesses uploading large amounts of data may struggle with it.
(sidenote: would it be worth spending so much on infrastructure to support
those few businesses?) That said, my understanding is that the upstream
bandwidth is intentionally capped by ISPs rather than being a result of the
infrastructure. Even with the most amazing infrastructure, you would need to
convince ISPs to drop the artificial limitation.

There is also an emerging behaviour where all data crunching is being done on
machines in the cloud. In that case, not much of the data would ever even
enter Australia unless you wanted it to.

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XorNot
This would require spending money on not mining companies. And if there's one
thing Australia is overwhelmingly against, it's doing anything which might
cause us to behave more like a first-world economy then a third world one.

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army
Singapore already has an (unjustified) superiority complex about Australia,
articles like this don't help. I don't mean to diminish what Singapore has
accomplished over the last fifty or sixty years - it could have turned out
very differently - but the reality is that Singapore's civil society and
democracy isn't robust. The human rights issues are a big thing, but even if
you write that off, then politically Singapore still has all its eggs in one
basket. If the ruling party ceases to be competent, it's difficult to say what
will happen: any viable opposition parties are sued into oblivion and there
hasn't been a peaceful transfer of power in over 50 years.

~~~
Gigablah
I don't know about superiority complex, if anything, a lot of Singaporeans
view Australia as an attractive immigration destination because they feel
cities there have a better quality of life.

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crdb
The elephant in the room here is immigration. I built a data science team in
Singapore for a two year old company, and out of the 6 people here, we have 5
nationalities (FR, UK, US, DE x 2, VN). All the visas were approved in a day
or two. No Singaporeans - the whole team was imported (5 more work remotely).
No Australians, either - 2% of applicants came from there but none made the
cut so far.

Now let's imagine that I, as a non-Singaporean citizen or PR, wanted to start
a business and was choosing between Singapore and Sydney. Both countries have
an entrepreneur visa of sorts. That's my primary consideration - all the
talent I know is foreign as far as both countries are concerned. I'm an
entrepreneur, so I don't care that much for tax rates (if it was absolute
dollars I wanted, I'd stay in corporate). From a quality of life perspective,
Sydney wins. SEA and Australia are similar markets in terms of potential
revenue - only 60 million people are connected in SEA (10% of the population)
and order values are much smaller, so potential balances out.

In Singapore, I just need to raise 75,000 SGD and then apply for matched
SPRING funding with a 7 page form. If I get it, my newly seeded company is now
eligible for an EntrePass for anybody with > 30% equity. In Australia, for a
Business Talent (subclass 132) visa, I need to raise... 1 million AUD. Or have
a net worth of 1.5 million AUD. How many first time entrepreneurs do you know
with that kind of net worth? How many not-yet-incorporated companies do you
know who get a term sheet for a million?

And of course, the US is out. Of the people we interviewed, only 20% were
American. I'm not going to restrict my talent pool to 20% of the market, or
take a punt on the April H1B circus. But that discussion is for another day.

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venus
The Australian government is technologically illiterate and will do no such
thing. If we're to have any real competition between countries to improve
their governance, entrepreneurs have to vote with their feet and actually move
to the countries with the best policies. Only then, when governments realise
that they're missing out on tax revenue, will they be motivated to change for
the better.

~~~
army
And entrepreneurs should look very carefully at the human rights records of
any countries they move to, including Singapore, regardless of how clean the
streets are.

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venus
How clean are the streets on Manus Island? Mopped up the blood there yet from
the last time one of our asylum seekers was shot dead?

We haven't got standing to criticise anyone about human rights.

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huragok
When the government is hacking at education and slashing essential
infrastructure for a services-based future (like the NBN), I hold no hope for
Australia supporting startups.

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bbromhead
Australia has an awesome tax incentive program for R&D that most startups will
qualify for. We've recovered about 30% of our initial seed money from this:

[http://www.ausindustry.gov.au/programs/innovation-rd/rd-
taxi...](http://www.ausindustry.gov.au/programs/innovation-rd/rd-
taxincentive/pages/default.aspx)

This incentive has been reduced by 1.5% under the 2014-15 budget.

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zmmmmm
The problems for Australian startups are cultural more than anything, I feel.
There's such a strong off-the-shelf culture here that it is near impossible
for a small player to get local traction even with a demonstrably better
product. Sadly IT is seen by parties on all sides - government, business,
consumer - as something Australians are just not very good at and should be
left to others. This is a bit of a catch-22, the attitude is justified by the
lack of really big, high profile Australian IT companies doing anything
useful. If a few companies had big exits (as Atlassian may do soon) then local
investors might start to take an interest in funding early stage startups. But
it is really more about attitude and culture more than anything and that is so
deeply rooted (tall poppy syndrome, etc) that I don't think much can change it
and startups with genuinely innovative ideas are far, far better just to move
to the US and get started there.

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andrewstuart
The Australian government is a bunch of luddites.

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vacri
Yes and no. We see things like the NBN and tech-related stuff as not being the
best they could be, but there's also plenty of policies where we're either
first in the world or in the first dozen or so who implement it. One example
is the MRRT, which was a pretty innovative idea. The current government is
horribly backwards overall, yet even one of their policies is fairly new in
global terms (very generous maternity leave welfare).

