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Suggestions for Reforming Australia’s Early Stage Investor Program

  • Stephen Barkoczy
  • Tamara Wilkinson
Chapter
Part of the SpringerBriefs in Law book series (BRIEFSLAW)

Abstract

This book has examined the critical role that venture capital investment plays in supporting start-ups and the importance of these companies’ success for the development of a country’s innovation system. The earlier chapters focused on a number of tax incentive programs that have been introduced by the Australian and United Kingdom Governments to encourage venture capital investment. In particular, Chap.  3 examined Australia’s formal venture capital tax incentive programs, Chap.  4 examined Australia’s new ESI program and Chap.  5 examined the United Kingdom’s SEIS (on which the ESI program was loosely modelled). Building on the policy framework and detailed discussion set out in these earlier chapters, this chapter makes some suggestions for reforming the ESI program so that it might be able to better achieve its policy objectives. The suggestions draw on comparisons made between the ESI program and the SEIS, as well as aspects of Australia’s formal venture capital tax incentive programs. The reform options put forward in this chapter involve: providing ISA with the power to make rulings in determining whether a company qualifies as an ESIC; allowing investors to claim capital losses on the disposal of their ESIC shares; introducing reinvestment relief similar to that provided under the SEIS; extending an angel tax incentive to investment in later stage companies to ensure that companies are supported throughout their stages of growth; and removing the 10 year CGT limit. The chapter concludes by recognising the importance of the ESI program to Australia’s innovation system and its critical role in helping Australia remain a clever country in the twenty-first century.

References

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Copyright information

© The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  • Stephen Barkoczy
    • 1
  • Tamara Wilkinson
    • 1
  1. 1.Monash UniversityClaytonAustralia

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