Australia backs crowdfunding scheme, offers start-up tax breaks

The extra funding will allow the Australian Securities & Investments Commission (ASIC) to spend the next four years implementing and monitoring a new set of crowdfunding guidelines. Around A$2.6 millon of this has been budgeted for the current financial year, and an initial framework is expected to be in place by the end of this year.

This comes after the Corporations and Markets Advisory Committee recommended the government bring in new rules allowing retail investors to invest up to A$10,000 a year via equity crowdfunding platforms. It also suggested start-ups be allowed to raise up to $2 million a year on such platforms.

The budget expanded tax concessions for employee share schemes that will enable start-ups to pay employees in shares or options without incurring a tax liability up-front. In addition, start-ups will be allowed to immediately deduct professional expenses incurred when they start a business.

The government also introduced a tax cut of 1.5% for small companies and a 5% discount on income from unincorporated small business activity.

In a statement, Yasser El-Ansary, chief executive of the Australian Private Equity & Venture Capital Association Limited (AVCAL), said he welcomed the government's commitment to implementing a new crowd-sourced equity funding regulatory framework but also expressed disappointment at the absence of other changes.

"In our submissions to the government, we urged them to implement urgent changes to the taxation of venture capital limited partnerships, which would turbo-charge the raising of new capital from domestic and offshore investors - they haven't implemented this change tonight, and that's disappointing for more than 30,000 Australian businesses that are in desperate need of new private capital investment," he said.

He also noted that the government had not provided more detail on the proposed investment mandate for the new Medical Research Future Fund (MRFF). The government is looking to distribute A$400 milion from the MRFF over the next four years. Legislation to establish the new fund will take effect from August of this year. It is expected to reach A$20 billion in 2019‑2020.

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• Topics
• Australasia
• Regulation
• Technology
• Australia
• Crowdfunding
• regulation
• AVCAL
• Technology