Just prior to the recent May 2019 federal election, the House of Representatives Standing Committee on Economics presented its report on the impediments to business investment in Australia.
The objective of the year-long inquiry was to understand the factors blocking business investment and how the Australian Government can facilitate, encourage and further increase business investment within the economy.
In May 2018, the Australian Investment Council put forward its views to the inquiry highlighting a series of recommendations relating to policy settings around foreign investment, superannuation fund regulations, tax and the innovation economy. Council chief executive, Yasser El-Ansary, and head of policy and research, Kosta Sinelnikov, also gave evidence to the committee as part of formal hearings conducted during July 2018.
The committee’s report made 12 recommendations, spanning a range of key policy areas such as the company income tax rate, the instant asset write-off and Export Market Development Grants. Importantly for the private capital industry, the committee recommended that the Government considers recommitting to the National Science and Innovation Agenda (NISA), and making provision from the 2019-20 and subsequent federal budgets to fund ongoing NISA initiatives into the future.
Appearing before the committee in its first public hearing for the inquiry, the Australian Investment Council raised the importance of business investment and innovation, and the need for a new ‘NISA 2.0’ program which would help catalyse new co-investing opportunities in parts of the market that do not otherwise attract sufficient capital. Such policies also play a vital role in stimulating venture capital investment within the economy, leading to job creation, new product development and increased overall economic activity.
The report acknowledged the Council’s long-held view that cohesive and well thought out innovation policy is crucial for ‘boosting investment into our most productive sectors, fostering competitiveness, creating jobs and helping build and future-proof the economy’.
Over coming months the Australian Investment Council will continue to work with the returning Coalition Government to move forward with key recommendations made by the Committee that have not already been progressed as part of the 2019-20 federal budget.
The committee’s report is available on the House of Representatives Standing Committee’s website and the Australian Investment Council’s 2018 submission is available on our website.