“An election budget not an entrepreneur’s one”: Startups react to the 2024 budget
Given the back-to-basics approach of the budget, it’s unsurprising that startup industry professionals had some things to say about it.
It was a quiet budget for the Australian startup sector. While there were a handful of announcements, most were tangentially related to the sector. In fact, the word ‘startups’ only appeared once in the budget papers.
Given the back-to-basics approach of the budget, it’s unsurprising that industry professionals had some things to say about it.
Carolyn Breeze, CEO, Scalare Partners
“It’s disappointing to see a lack of meaningful investment in local technology development in this year’s budget. With at least $466 million in taxpayer funds going to US Quantum Computing, we hoped to see comparable backing for local solutions across spaces outside of manufacturing, such as artificial intelligence.
“The Government has reiterated its $39.9 million pledge for the development of policies and capability to support adoption and use of AI in a safe and responsible manner, but we would like to see more encouraging local talent to roll up their sleeves and develop world-class tech innovations.
“New STEM Diversity programs and innovation visas look positive on paper, but it will be some time until the impact of these can be observed within the industry. The Government could have done more in this budget to enable businesses and individuals working on new technology today.”
Ben Thompson, CEO and co-founder, Employment Hero
“The budget extends the $20,000 instant asset write-off for another year until 30 June 2025, demonstrating a significant commitment to supporting the backbone of the Australian economy — small businesses.
“By enabling these businesses to immediately deduct the full cost of eligible assets under $20,000, the government is not only easing cash flow pressures but also encouraging continued investment in the tools and technology that can drive business growth and innovation.”
Rehan D’Almedia, CEO, FinTech Australia
“As expected, cost of living is front and centre of this budget and supporting existing proven industries such as fintech wouldn’t be a priority.
“We, however, welcome some of the measures that will benefit fintechs, such as the much-needed funding to continue modernising the regulatory frameworks for payments and digital assets while ensuring ASIC can handle the licensing influx.
“We also welcome the new funds for sustainable finance initiatives, net zero transition and programs designed to address financial scams and fraud. Fintech has a key role to play here. We also look forward to the establishment of two new Austrade Landing Pads, which have been well utilised by fintechs in the past.
“But we’re concerned that the fintech industry, with a proven track record for innovation and job creation, receives limited support. While existing funds are yet to run their course, there’s no new funding measures for the Consumer Data Right — a key piece of the government’s plans to help reduce cost of living pressures by raising competition. To see this policy realised, after years of work, we’re now banking on funding for the CDR during a potential election-year budget.
“Nor is there much in the way of direct measures that will support a marked decline in fintech funding, which is down from a high of $3 billion in 2021 to $331 million last year.”
Luke Fossett, general manager ANZ, GoCardless
“What isn’t in this budget is any kind of significant over-the-till support for businesses. The extension of the $20,000 instant asset write-off and energy bill relief assistance is somewhat helpful, but there’s nothing here that will encourage patrons to support local businesses or ease the pressure of slowing cash flow, dwindling patronage and escalating overheads.
“Given the shifts in the global investment landscape over the last 18 months, it’s clear that our federal government needs to take a more proactive approach to support the tech sector. There’s a critical need to champion the next generation of Australian tech entrepreneurs.
“With the decline in international funding for startups that are pre-revenue or even pre-profit, local support has become essential. If we don’t address this issue, we risk either diluting our unique entrepreneurial culture or losing our best talent to more robust VC markets like the US or UK.”
Amber Daines, founder of Bespoke Co. and ESG4PR
“As an early-stage tech founder for an ESG-focused app, I was disappointed to see there was very little if anything for self-funded tech founders to scale or expand their offering in the 2024-25 budget.
“Our business had anticipated more investment in for example, in a round 4 stage of the government’s Boosting Female Founders Initiative which was flagged as a way for women entrepreneurs to grow their startups and scale into domestic and global markets.
“We have started to work in the Asian market so this grant would be aligned. It seems Treasurer Jim Chalmers’ focus on helping Australians broadly with the cost of living and inflationary firefighting, while vital and valid, feels like an election budget, not an entrepreneur’s one.”
Adam Milgrom, partner, Giant Leap
“This is perhaps Australia’s most impact-led federal budget yet; it resonates strongly with our investment focus and we’re excited to see new funding commitments for health, climate and education.
“Unfortunately despite the support for these key high-impact sectors we see little in the way of direct support for the startup industry and it’s unclear how the startup sector will interact with the Future Made in Australia policy.
“We are buoyed by the focus on the environment and resources aimed at improving health and educational outcomes but the lack of support for the startup ecosystem is a missed opportunity.
“There’s plenty of policy changes and strategic investments the government could make that include the industry to lever greater change.
“Perhaps that’s the message behind these measures, that the government still isn’t convinced that it’s their role to ensure Australia’s startup ecosystem continues to thrive into its next growth phase.”
Jordan Taylor-Bartels, CEO, Prophet
“In the 2023 federal budget, the government pledged $41.2 million to support the responsible deployment of AI in the national economy, including setting the National Artificial Intelligence Centre on a more sustainable footing to support the Responsible AI Network.
This investment now appears to be $39.9 million. The safe and responsible development and deployment of AI is good to see, but the government appears to still largely be focused almost exclusively on building guardrails rather than also enabling innovation. An increased focus on responsible deployment of AI is reassuring, but we would have liked to have seen a further commitment by the federal government specifically to support and help fund locally developed AI innovations.”
Des Hang, CEO, Carbar
“There’s a change of tone in this federal budget. Rather than fund support services or programs that benefit startups, the government is making a specific bet on industries, such as energy or quantum computing. Given this, even the continuation of the instant asset write-off is a surprise.
“This makes sense given the government is towing a fine line [between] supporting the economy while trying to dampen inflation. Support for the startup industry was bound to be in the firing line, as it can be an economic accelerator.
“Still, each year, the sector acts surprised. Is it time to accept that the federal government won’t support the sector as we’ve seen in the past. And perhaps that raises questions about the sector’s relationship with the federal government.”
To see SmartCompany‘s full budget coverage, click here.
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