Bill Ferris Press Conference

E&OE TRANSCRIPT
Press Conference
17 November 2015

Announcement of Bill Ferris as the new Chair of Innovation Australia.

Christopher Pyne: Well, thank you for coming to the Blue Room for another important announcement in the Industry, Innovation and Science space, a couple of weeks ago we announced the new Chief Scientist, Alan Finkel, today we are announcing the new Chair of Innovation Australia, Bill Ferris. Bill Ferris will be very well known to people in business and industry across the venture capital startups sector. He is probably Australia’s longest serving and best known venture capitalist, starting the first Australian venture capital business, as a startup itself, in 1970, which has had a number of different iterations over that period, for 45 years, but I think his best known is CHAMP Equities.

Everyone across this sector will see Bill Ferris’ appointment as a very strong indication from the Government that we want Innovation Australia to have a substantial role in the implementation of the national innovation and science agenda that will be announced in December. We also want people to recognise that we are appointing a businessman, a philanthropist, somebody who will continue to bring the higher education sector and the business sector together, to bring researchers and business together, to match up funds with great, groundbreaking research, to commercialise research. This adds to our agenda that is starting to be fleshed out around improving talents and skills, commercialising research, raising capital, and government as an exemplar, which will form the four pillars of the national innovation and science agenda.

So I am very pleased that Bill accepted the role. Innovation Australia will have a revamped part of the national innovation and science agenda. We will be giving it a beefed up role that will include advice, evaluation, and reviewing of the agenda. And I am so far have worked well with Bill, we have had lots of terrific discussions. His input has impacted upon the final shape of the national innovation and science agenda, and I am very excited about our ongoing future relationship and the role that he will play in bringing innovation, creativity, and agile economy very much to the center of Government's agenda.

Bill might like to say a few words as well, and then obviously we will take some questions. Bill.

Bill Ferris: Thank you Minister, for a very articulate introduction, and a generous one. Thank you.

It is an important day I think for those of us in the science and innovation system of Australia, and I think for all Australians, frankly, in that there is a real momentum from the top down, from the Prime Minister and from Minister Pyne; which gives me a lot of enthusiasm and encouragement that change is going to happen for the better. So one doesn't feel like one is wasting one's, time or yours. I come to this with … thank you for the comments about some successes; in fact I bring a lot of scar tissue as well. And I have learned that effectively, in that great big school of- business school of hard knocks out there, that you learn more from your failures, probably, than most of us do from our successes. And after a while you begin to identify luck as a pretty good part of the latter anyway. But I mention that only because I think we all do work, in a cultural sense, on perhaps often too big a play of the fear of failure, as opposed to the excitement of gain. And it’s the latter that drives, ultimately drives innovation right through the system. So I am happy to take any questions, Minister that may occur.

Christopher Pyne: Are there any questions? Yeah …

Question: Mr Ferris, I am just wondering about in building a sort of innovation climate, what role angel investors can have in your view, and in particular the proposal for broadening capital gains tax, exemptions for angel investors. Then at the other end of it, of the scheme, what sort of role do you think other foreign governments can play in helping Australia, like the talk about submarine programs, helping drive broader innovation in Australia?

Bill Ferris: Well I will throw the submarine one to the South Australian here. But on the first question, yes, I think we do need a lot more activity in the start-ups part of the food chain. The more we get happening in that area with seed capital and very early stage venturing will be a good thing. You’ve got to accept failure as well as successes in that end of it. But without more of it happening, without more collaboration between entrepreneurs, academics, here and abroad, we won't get it. And part of that will be fuelled by raw risk capital. And a chunk of that, and a chunk more of it, needs to come from private investors, including high net worth investors to your question. I think that the Government will be looking at whether the income tax deduction scheme can be more aggressively offered to compensate for that early risk, and also whether a capital gains tax, if people hold investments long enough, should that be relooked at? But certainly, I would expect and hope that in this whole process we will see more activity, more money coming from private high net worth investors into start-ups, into the accelerator incubator ecosystem that is surrounding that and growing rapidly in a very sophisticated way now in Australia. Early days, but good days. So more of that, yes.

Christopher Pyne: And I think AVCAL released their year book, it’s in the newspapers today, showing an exponential increase over the last two or three years in investments in this area, and new venture capital funds. And Malcolm Turnbull and I really want to ride that wave right now and turbo-charge it into the future. This is a great opportunity. We have a Prime Minister who is instinctively energetic about this part of the economy, and believes it can be a transformative part of our nation. And with a lot of business people and people with high net worth coming into the sector, as AVCAL's figures show, which are in the paper this morning, this shows that we are hitting it at exactly the right spot.

In terms of the national innovation and science agenda, there will be a quite lot in there that you will be able to write about with respect to changes around tax, taxes bankruptcy, the way we treat tax losses, etc. We want to create a ecosystem that really encourages exactly the kind of behaviour that we are wanting to see in Australia - so commercialising research, enabling risk. We are a risk-averse nation economically; we want to give people a great boost to believe that they should take risks, and that if sometimes they don't succeed they should try, try again. As Bill said, as a businessman of long standing, lots of failures, lots of successes, and you learn as much from the failures as from the successes.

Obviously, the defence procurement is a big part of a role the Government can play in supporting high-tech industries and advanced manufacturing. The Government has been saying for two years that whatever the outcome of the competitive evaluation process for the submarines, there will be a great deal of extra work and jobs and growth for South Australia in high-tech and advanced manufacturing. And of course South Australia has already won the Future Frigates project, which is a $43 billion investment, which will also be very important for advanced manufacturing and high-tech industries.

Question: So Minister given what you have just said …

Christopher Pyne: James.

Question: … about angel investors, following up on Fluer’s question, can we then infer that the innovation statement may adopt some form of David Coleman's proposal on capital gains tax? Is that what [indistinct]?

Christopher Pyne: [Interrupts] Well James, we’re not going to preview the national innovation and science agenda any further than I already have, because, I don’t- it is still a work in progress. Early in December, it will be released to you and to the public. I think you will be impressed with the comprehensive nature of it. I have outlined the four themes that it will address. It will certainly be around helping to raise capital and encouraging the raising of capital, the commercialisation of research, bringing talent back to Australia that has been overseas. There are 20,000 Australians in the Silicon Valley; we want people to go overseas and improve their skills, but we also want them to come back. We also need to work on our skills base here, in science, technology, engineering and maths, and the Government has a role as an exemplar and also as a procurer as the largest business, effectively, in the economy.

But I am not going to give little tidbits about what we might be doing for your newspapers before then, because I think it is a document that should stand on its own. But I think you can assume that there will be significant tax changes and corporate law changes that will encourage the kinds of behaviour that we are looking for the business community to get involved in. Matthew?

Question: Given the - just to follow up if I may - the emphasis we have seen from the new Turnbull Government on the importance of science and innovation, which has delighted the science sector, is it possible that the 115 or so million cut from the CSIRO in the 2014 Budget, is that something that might be reversed?

Christopher Pyne: Well now you’re fishing for more detail about the national innovation and science agenda, which is your job, and it is my job to blunt those attempts. So I won't be giving you any detail about the NISA. You will see it all when it is released in December. Matthew?

Question: Mr Ferris, you’ve mentioned Australia's trading while insolvent laws. Obviously they’re very strict and directors can go to jail if they are trading while insolvent. What changes would you like to see there from the Government?

Bill Ferris: Well, again I guess - not getting into the micro of what the Government might be considering - but I think one of the problems at the start-up end certainly, is how do you attract skills onto the boards and as mentors to these early ventures when the risk is at its highest in the whole profile between the start-up and a major public company, for example? So the test - trading while insolvent obviously is not something anybody should try to say isn't a very strict and necessary discipline to watch. But the Americans, for example, have laws which really at the start-up stage put the focus on the companies' responsibilities in that, not individuals and especially individual independent directors coming on to try and mentor and help.

So you know, it’s one of those nuanced things that we need to look at because we need those helps at the start-up end. Unless, from Fleur’s question and the answer so far, this whole focus I think in the agenda is of course very inclusive about start-ups. Absolutely important and very exciting, but the whole SME, the whole expanding small manufacturing public, the big end of town, greater engagement in innovation – it’s right through our whole system that we’ve got to charge if we can over the years - turbo charge. And so I think your question is more directed at that liability at the very start of this food chain.

Question: Mr Ferris, you talked about that fear of failure in Australia. What do we need to do as a society to get more young people interested in becoming entrepreneurs rather than going down the becoming salaried employees? How do we get that ambition going as a culture do you think?

Bill Ferris: Well that’s a very big question. I wish you could perhaps answer it for me. But I think it’s so many things. It does - people have talked about early stage education and intervention about what is possible and the STEM subjects may help people, will help people’s capabilities to participate in a digital world that has quicker paybacks often, both for failure and success, than the traditional business models, which take a longer time characteristically. But I think it is happening. I think it actually will be more of a bottom up thing. As much as it is great to have senior ministers and a Prime Minister talking about this and believing it and pushing it, I’ve actually got more confidence in the bottom up resurgence of doing it for yourself, getting out there and giving it a go.

Look at the number of young peoples doing that now, as I am, compared to say top level, top big boardroom down where there, there the fear of failure is at large. There, the box ticking and governance is trumping a lot of innovation and risk taking, I believe. This is not a government belief, I believe. So I think ultimately the answer is going to be a bottom up thing and it is happening. And I think the Government's measures and moves will help accelerate that.

Christopher Pyne: And to just briefly add to that, Peter. I mean, it’s a big cultural change and one of the aspects of this national innovation and science agenda is going to be addressing culture. In Israel, for example, the Chief Scientist told the Prime Minister not long ago, when asked this very question about the media handling of failure in Australia and how they did it in Israel. Because Israel has a venture capital government fund which sometimes invests in businesses that don't succeed. And of course in our media culture, there would be an instant story on the front page of your esteemed newspaper or someone else's saying you know, which minister allowed this to happen? That person should be sacked or resign or run out of town on a rail.

In Israel the Chief Scientist said, actually we have convinced the Israeli public that business failure can be a public good. Just like university students going to university and studying a course they might never actually work in, or they might never actually start paying their higher education contribution scheme back because they don't earn over the threshold, we regard that as a public good. There’s a public and a private good associated with higher education. We’ve always said that in this country and it’s true.

The Israeli Chief Minister said that- the Chief Scientist said in Israel we’ve convinced people that if you invest in a start-up and it fails, you might invest in the same person again a second time, they might fail. They have learnt from the first mistake, they’ve learnt from the second mistake. They might succeed the third time, even if they don’t they’ll probably succeed the fourth and fifth and sixth time. So the failures along the way have been a public good that we’re prepared to wear that cost, knowing that over time they will learn from those failures and probably earn a great deal more, pay a lot more taxes and contribute to Israeli society in that way.

That’s a cultural shift that we’ve got a long way to go on in Australia, but I think we can achieve it over time. And public government decisions aren’t supposed to be just for today, or the next election; they should be about changing the culture over a decade, and that’s what we are going to try and do.

Question: Minister Pyne, the Prime Minister famously told you to release your inner revolutionary.

Christopher Pyne: It’s been released.

Question: Has it been released - is it out there? Are we going to [indistinct] …

Christopher Pyne: It’s out there; it’s running amok in the Ministerial Wing.

Question: How does it feel?

Christopher Pyne: [Laughs] Well Matthew, the great thing about the Prime Minister is that he genuinely wants to try and make a difference around innovation, science, commercialisation of research. We can’t- we cannot continue to be the worst performer in the OECD in commercialising research, because what we’re doing is massive opportunity to create jobs and growth. We are doing great research and then we are manifestly failing to commercialise it. The taxpayers can rightly expect to get a better return for their extraordinary spending dollar, which is $9.7 billion a year, this year in 2015-2016.

So the Prime Minister really wants to come up with the ways of lifting us off the bottom of the table. Because he knows that will create jobs and growth. So this focus on this area fits very neatly into the Coalition’s long-term narrative, which is that we are about jobs and growth. And I have- I think we’ve come up with a terrific package, which is still being worked on between now and December, and will continue to be refined and improved and added to and subtracted from. But I think when it’s released it will be an opportunity to turbo charge this part of the economy. And I must say I’m very excited to be the Minister responsible for it.

Question: Can I take you slightly off topic to comment on today’s Newspoll, specifically on the GST question. You are on record saying Government has no plans. Also reports that you deny that the Government had no plans whatsoever to raise the GST. Do you think that today’s poll will perhaps convince you, and perhaps nervous backbenchers to really go after and pursue difficult tax reforms?

Christopher Pyne: Well the Government had no plans and the Government has no plans to change the rate of the GST. The states and territories have been promoting an agenda around increasing the GST. Some premiers because they want to spend more on health and education, some because they want to reduce their own taxes. We are having a national debate about this subject and what the Ipsos Poll shows today is that Labor has manifestly failed with their not very scary scare campaign to scare the Australian public away from a debate.

I think this is a very important development in the Australian politic because what the poll shows - whether you agree with particular numbers or margins of error – but what it does indicate generally is that the public are prepared and will to have that discussion. That they are sophisticated and intelligent and much more so than the Opposition, who return to old politics, old tired politics of scare campaigns and have been proven to be manifest failures in the poll this morning. Though we still don’t have any plans to increase of change the GST, it’s a debate that the country needs to have and we’re having it.

Question: When should that debate end Mr Pyne?

Christopher Pyne: Well debates and discussions have a habit of organically ending at the right time. And I’m happy to let that discussion run for as long as the public want to have it. Joe?

Question: On Paris, the Treasurer and Immigration Minister today called on the Grand Mufti to come out and make an unreserved condemnation of the attacks. Were you happy with the Grand Mufti’s statement yesterday, did it get the message right or not?

Christopher Pyne: I think the important thing about the response to the terrible events in Paris is for it not to become a domestic political issue about who said what to whom and when. This is far too serious a matter to reduce to a discussion around whether people are satisfied or not with the comments of a particular person in the Muslim community. Everyone is horrified by what happened in Paris on the weekend. Our response has been to obviously review the military action in the Middle East, and France has obviously stepped up their campaign within Syria.

We have ensured that our own national security in Australia is up to standard, and the NSC has been meeting with the Prime Minister by teleconference and telepresence to do that. We have reviewed our humanitarian response to ensure that the 12,000 Syrian refugees that we have agreed to take in addition to our humanitarian visas are well screened and are going to contribute to Australia society. These are the positive measures that need to be taken to defeat the scourge of ISIS and to show to the world that the Europeans and Australians, the United States and all moderate people around the world are united against extremism, whether it’s extremism of a Muslim type, or any other type. So I don’t want to extend the debate about the Grand Mufti’s comments. He has his answer for his own discussions but I’ve been very comfortable with the reaction of the Muslim community in Australia.

Question: Minister can I just ask, in regards to that, a man in Sydney this morning has launched the Muslim Party of Australia, do you welcome that and what do you think of the timing of the announcement?

Christopher Pyne: Well we are a secular, pluralist society and people can launch whatever political parties they choose to launch as long as they comply with the law. That requires them to have a certain number of members or to have a member of parliament who’s currently in office. Whether it’s a Muslim party or a Christian party is really of no consequence to me. I’m a member of the Liberal Party and I intend to remain a member of the Liberal Party and run under that flag. I don’t think a religious-based party will be very successful.

Question: Minister, just in response to what has happened in Paris, we have seen an opinion piece published in The Australian today by the former prime minister calling for Australia to expand its military action in the Middle East, how helpful is it to have Tony Abbott on the side lines putting forward these views which seem to be in contrast to what your Ministers appear to be saying in that we need to have clear heads, not rush into anything and examine the situation, where he is pushing forward it straight away?

Christopher Pyne: Well the National Security Committee of the Cabinet and the Cabinet is always considering whether the military response to the scourge of terrorism is adequate, and we will do so into the future. And we welcome all views; views from the former prime minister, views from anybody who wishes to contribute to keeping Australia safe from evil people, and I think on that note we might finish up. Thank you very much.

[ends]