For all the rhetoric last night, and over the past week, about how central startups are to Australia’s future, the budget has handed the industry a bitter pill it cannot swallow.
First, credit where it’s due: the R&D Tax Incentive has received its most significant uplift in years, with a 4.5 percentage point increase in the core offset, the intensity threshold cut from 2% to 1.5%, the expenditure cap lifted to $200 million and refundable offsets extended to companies with turnover of up to $50 million.
The Early Stage Venture Capital Limited Partnerships (ESVCLP) regime also received a long-overdue re-rating, with the asset cap on investee businesses raised from $250 million to $420 million and the maximum fund size lifted from $200 million to $270 million.
Loss carry-back has been permanently reintroduced for companies with turnover of up to $1 billion, while startups in their first two years will gain access to tax loss refundability.
