Global Outlook 2024 Report


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‘Scale-ups’ central to innovation and Australia’s economic future

Foreign investment rules should be relaxed to encourage a new wave of offshore funding and quarterly R&D tax credits introduced to help innovative, cash-poor firms as part of a bold blueprint to develop a high-tech Australian economy. 

On the eve of the 2016 federal election, AVCAL, Australia’s peak body for private equity and venture capital has called for a fast-tracked ‘limited partnership’ vehicle to encourage foreign investment into high-growth businesses. 
“Foreign investment has always played an important role in fuelling the Australian economy. Our current framework does not have the right balance between welcoming overseas capital, and ensuring Australia’s national interests are protected. The reality is that foreign investment is crucial to the funding of small and medium sized Australian businesses” said AVCAL Chief Executive, Yasser El-Ansary. 
Calling on the major political parties to do more to help home-grown ‘scale-up’ companies, AVCAL also wants the incoming federal government to remove regulatory impediments to superannuation funds investing more money into private equity and venture capital. 
Warning that many promising start-ups could “wither on the vine” without additional support, El-Ansary is calling for a concerted, bipartisan effort to drive the next wave of economic growth. 
In a fiercely competitive global market for capital and talent, Australia must do more to support its home-grown ‘scale-ups’: those companies that have graduated from the initial ‘start-up’ phase and now need further capital and expertise to compete on the world-stage. 
Research consistently shows that young small and medium size enterprises (SMEs) are the engine of employment growth – between 2006 and 2011, 40 per cent of all new Australian jobs were created by these enterprises. 
“The National Innovation & Science Agenda (NISA) will be transformative for Australia’s start-up ecosystem, providing investors and entrepreneurs with the right risk/return incentives. Now we have to turn our attention to the next phase of that work – NISA 2.0 – which must be focussed on boosting the availability of later-stage capital for fast-growing Australian businesses,” says El-Ansary. 
AVCAL has also identified a number of roadblocks getting in the way of superannuation funds investing more capital into Australian businesses through PE and VC. 
“We could do a much better job of re-casting our superannuation policy and regulatory framework to drive more meaningful economic outcomes for Australia – the opportunity to unleash the power of superannuation is right in front of us. Super funds are telling us they want to invest more in PE and VC as they see value for members,” El-Ansary says. 

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