NSW Liberals slam Labor’s Sydney Startup Hub relocation
The move to relocate Sydney Startup Hub has sparked a backlash over the lack of details as NSW Liberals question the state government’s commitment to early-stage startups.
The New South Wales’ government’s decision to relocate the Sydney Startup Hub to the Tech Central precinct by October 2025 has sparked controversy and drawn sharp criticism from the Liberal opposition.
The move, announced by Minister for Innovation, Science and Technology Anoulack Chanthivong last week, has prompted questions about the future of the state’s startup ecosystem and the government’s commitment to supporting early-stage innovation.
Minister Chanthivong’s announcement last week outlined plans to close the Startup Hub currently located above Wynyard Station, and move it instead to somewhere within Tech Central.
The government argues this transition will give NSW startups “the best chance to flourish” by placing them in closer proximity to universities and research institutes.
Minister Chanthivong said the new Tech Central Strategy is aimed at empowering the innovation ecosystem while also supporting housing, creative industries, and visitor and 24-hour economies.
A series of hits for the NSW startup sector
However, the decision to combine this strategy with initiatives for other industries, as well as a lack of a specific location within Tech Central and a clear transition plan has raised concerns.
“The Labor Government has demonstrated a basic misunderstanding about the need for speed and scale in the startup industry,” NSW Shadow Assistant Minister for Innovation Jacqui Munro told SmartCompany.
“In September, under examination during Budget Estimates, Minister Chanthivong promised ‘long-term policy, stability and clarity’ for the Sydney Startup Hub.
“This announcement has come as a shock to startup founders and tenants, and with no certainty or support for the transition, demonstrates once again that this government is operating without a plan for the startup ecosystem.”
The relocation announcement comes amid a series of policy changes and delays that have affected the startup sector.
The government’s Innovation Blueprint, initially promised 15 months ago, has been pushed to the first half of 2025.
Munro has challenged this timeline, saying the Coalition uncovered no provision for funding in the current budget to implement the Innovation Blueprint or an industry strategy during Budget Estimates earlier this year.
“Coupled with uncertainty about a non-existent trade and industry strategy and no clarity about the future of Tech Central and the Macquarie Park Innovation District, there is legitimate concern about what the future of innovation looks like in NSW,” Munro said.
Additionally, the government has cut funding for several startup initiatives, including the Sydney Startup Hub itself, and the Carla Zampatti VC fund for female founders.
There has also been a reduction in funding in the NSW MVP Grant Program, which raised concerns earlier this year for seemingly favouring startups from affluent Sydney suburbs.
“Of all the relationships founders build to start their ventures, founders should be able to rely on the government as a reliable partner and guide. Instead, this Labor Government has paused and slashed programs without warning or explanation, [and] promised an Innovation Blueprint by June, which is yet to materialise,” Munro said.
This has raised questions about the government’s commitment to fostering innovation and supporting early-stage companies in NSW.
Munro noted a 26% drop in new company formations in NSW compared to 2022 and a $2 billion decline in annual venture capital investment.
“From axing enterprise, industry and trade grants to slashing significant operational costs, including staff, at Investment NSW, this government has cut well over $1 billion from the budget, demonstrating that Labor fundamentally misunderstands the pathway to our state’s economic prosperity,” Munro said.
The contrast between NSW’s approach and other Australian states is stark.
Western Australia recently announced $45 million in funding to leverage investment by VC firms in local startups, while Victoria invested an additional $40 million into LaunchVic.
The Queensland government also launched the $130 million Queensland Venture Capital Development Fund to attract venture capital firms and support local startups.
Labor defends its decision to relocate the Sydney Startup Hub
However, the Labor government has defended its decision to fold the Sydney Startup Hub into Tech Central, which spans six square kilometres in the Sydney CBD.
“One of the drivers of the Tech Central Strategy is to look at how startups and scale-ups can take full advantages of being in Tech Central – from access to talent, proximity to venture capital, and opportunities for collaboration across the district,” a spokesman for Minister Chanthivong told SmartCompany.
“The transition of the Sydney Startup Hub to Tech Central will give NSW startups the best chance to flourish in a district where founders, entrepreneurs, investors and corporates can collaborate with the universities and research institutes that are right on their doorstep.
“Sydney’s innovation ecosystem is valued at $72 billion – four times the regional average, and with Sydney ranking the highest in the Southern Hemisphere in the Global Startup Ecosystem Report 2024, there’s no better place for startups and scaleups to be located.”
The government also reiterated that the long-awaited Innovation Blueprint would be released in the coming months.
“[It] will explore a new accommodation model at the Tech Central Scaleup Hub, including refreshed services and support for businesses across the ecosystem at all stages of growth.”
The NSW Coalition says Sydney startup ecosystem left in the lurch
The announcement has also raised questions about the government’s priorities. For one, the precinct supporting housing, creative industries, and the 24-hour economy could potentially overshadow support for early-stage startups.
“The reality is that this government has already demonstrated its preference for housing above all else with the significant rezoning of the Macquarie Park Innovation District, which has led to the flight of major companies and startups from the area,” Munro said.
Munro also criticised Labor for name-dropping major players in its announcement, such as Atlassian, while not recognising ecosystem enablers such as Fishburners, Stone & Chalk or Tank Stream Labs.
“They have once again demonstrated a fundamental misunderstanding of the pipeline of growth that is required to build a thriving startup ecosystem from early-stage to scale-up, and instead chosen to cosy up to the top end of town,” Munro said.
Despite the backlash, key players in the startup ecosystem have publicly expressed cautious optimism and support for the move.
Stone & Chalk CEO Christopher Kirk said while the Startup Hub closure brings change, it’s also “an opportunity to build something even more powerful – a globally connected, collaborative hub at Tech Central”.
Kirk emphasised the potential economic impact, suggesting a possible “$34.5 billion uplift for the economy if we get this right”.
Similarly, Fishburners CEO Martin Karafilis shared his team sees “tremendous opportunities for our community and the broader startup ecosystem”.
Both CEOs stressed the importance of community engagement and promised to work closely with stakeholders to ensure a smooth transition.
It’s currently unclear when the NSW Labor government will announce more specific details about its Tech Central Strategy or where the Sydney Startup Hub’s new home will be after October 2025.
“The government should be announcing a Tech Central Strategy before making significant announcements. But almost two years after being elected they have left innovation precincts to languish,” Munro said.
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