Radio National Breakfast
08 Dec 2015
Transcipt E&OE TRANSCRIPT
Interview - Radio National Breakfast
Tuesday 8 December 2015
SUBJECT: National Innovation and Science Agenda.
James Carleton: Well Australia’s mining boom is giving way to what the Turnbull Government is calling Australia’s ideas boom. It’s unveiled of course its $1 billion National Innovation and Science Agenda, which includes tax concessions for startups, new visas for entrepreneurs, the reinstatement of money for CSIRO, relaxed bankruptcy laws to encourage risk taking. The Prime Minister is urging one and all to overcome a fear of failure and embrace new ideas and enterprises.
[Excerpt]
Malcolm Turnbull: One of the aspects of the political paradigm I am seeking to change is the old politics where politicians felt that they had to guarantee that every policy would work, they had to water everything down so there was no element of risk. Let me tell you- I’m not guaranteeing that all of these policies will be as successful as we hope they will be, you know? If some of these policies are not as successful as we like, we will change them. And we will learn from them.
[End of excerpt]
James Carleton: The Innovation Statement was put together by the Industry Minister Christopher Pyne who was in our Parliament House studio and to speak with him political editor Alison Carabine.
Alison Carabine: Christopher Pyne good to see you.
Christopher Pyne: Good morning Alison.
Alison Carabine: The Prime Minister is asking us to embrace risk and eschew- the Prime Minister is asking us to embrace risk and eschew a fear of failure. It’s one thing for investors to risk their own money in new ventures. Why should taxpayers’ money be used to prop up enterprises that might have little chance of succeeding?
Christopher Pyne: Well they won’t be used to do that. So the two venture capital funds that I think you’re referring to- the Biomedical Translation Fund and the CSIRO Innovation Fund…
Alison Carabine: No that’s not what I’m talking about, I’m talking about the tax offsets and also the capital gains exemptions that you’ll be offering investors in startups.
Christopher Pyne: Oh well we often use- I mean governments of all hues use the Tax Act to try and encourage particular economic behaviour, like for example superannuation over the last 20 or 30 years. So it’s not unusual at all for the Government to change the tax arrangements to try and push people in a particular direction. Now we believe that innovation and science will be at the centre of our Australian economy into the future. It’s the new ideas boom as the Prime Minister has dubbed it, replacing mining over time, although we’ll always have mining, we’ll always have agriculture, always have education services and tourism and financial services but we need to supercharge that part of the economy where young people are going to have jobs into the future and if we have to use the tax system even mildly to try and push people in that direction, that’s exactly what government should be doing.
Alison Carabine: But you’re pushing investors in the direction of startups which have a high failure rate only about one in 11 succeed. Is there a risk that startups could become the new version of the old managed investment schemes, most of which were just tax shelters and very quickly went bust?
Christopher Pyne: No not at all I mean the managed investment schemes are an entirely different system, an entirely different apparatus. All we’re asking people to do if they wished to do so is to put their investments not just into property, not just into stocks and shares, but to also support businesses that have the capacity to employ hundreds or thousands of Australians.
Alison Carabine: The Prime Minister says that we can learn a lot from business failures, as such you are also changing the insolvency laws to allow businesses to trade while they’re insolvent. You are also reducing the period during which bankrupts are not allowed to run other businesses. The Government clearly wants people to have a go but how do you strike the right balance between risk and outright recklessness?
Christopher Pyne:Well we’ve struck the right balance because we still require trustees or courts to be able to take action to extend the bankruptcy period in cases where they think the bankrupt is not an honest and decent person. But what we’re trying to do is get away from the situation in Australia where as soon as a business of any size is looking like it might be in choppy waters, the creditors instantaneously shut down the business, the personal liability of directors for bankruptcies instantly are bought into play. Now we want businesses if they can to try and trade out of difficulties more like the United States while also having protections in place and these release changes to insolvency will encourage that kind of behaviour so that people don’t lose their jobs and directors don’t find themselves bankrupt because they’ve had the chance to trade out of their difficulties.
Alison Carabine: So you are trying to encourage a certain kind of behaviour, but isn’t the real key to unlocking innovation research and development? Australia lags a number of our key competitors on that front, such as the United States who you’ve just cited. The United States has a very good record encouraging innovation. Why haven’t you looked at R&D in this package?
Christopher Pyne:Well most of the package is about research and development so the- all the changes in universities for example, are about commercialising research. The CSIRO Innovation Fund is about commercialising research, so developing research, the…
Alison Carabine: But what about research and development for businesses?
Christopher Pyne:Well we’re not changing the research and development tax offset and there are significant parts of this comprehensive package which are about bringing industry and universities and researchers together, for example, we’re going to expand innovation connections where businesses have researchers come from universities and institutes into their business to help them in the short term. We’re going to supercharge incubators and accelerators in Australia but the largest part of the change is the nexus between industry and universities in terms of research and development. So we’re going to introduce a new metric that measures research impact which will impact on whether universities get more or less research money. So most of the package is about research and development.
Alison Carabine: But what about lifting business R&D as a proportion of GDP? You haven’t done that in this package.
Christopher Pyne:Well because of the incentives that we’re putting in for universities and into the venture capitalists and start-ups and so on, that of itself will push the businesses towards putting more of their funds into research and development because of course if you are thinking about developing a particular idea and you go to a university and you support their research and the university attracts more funds from the Government, obviously you’re more inclined to do that because of this package than you were before.
Alison Carabine: Okay one of the other areas that you will be investing substantial amount of money is the CSIRO, $200 million. Last year you cut 150 million from CSIRO, now you’re putting the money back in; is that a pretty stark admission that you got it wrong last year?
Christopher Pyne:Well there are two big elements for CSIRO- there’s the $200 million Innovation Fund and $75 million for Data61 which is also part of CSIRO, so it’s really $275 million for CSIRO which is why they’ve welcomed it so enthusiastically. In fact the third party support for this package has been quite overwhelming and we haven’t, of course, cut CSIRO but rather than arguing about the past, what we’re doing is striking out in a new direction in the future. $275 million for CSIRO is obviously a significant investment but they are one of our international flagships. So why wouldn’t we want to use them when they have such practical applications for their research and development like Wi-Fi which came from the CSIRO? We’re going to let them keep the profits they made from Wi-Fi and reinvest those in commercialising other of their excellent research.
Alison Carabine: So no regrets what happened last year?
Christopher Pyne:Well I wasn’t the minister last year, Alison, but I am the minister now.
Alison Carabine: No but you were the education minister and you did put the funding at risk for the National Collaborative Research Infrastructure Scheme NCRIS.
Christopher Pyne:I saved the NCRIS.
Alison Carabine: Well yes now that-
Christopher Pyne:I fixed it this year, I’ve now fixed it for good.
Alison Carabine: Yes $1.5 billion over a decade…
Christopher Pyne:That’s right.
Alison Carabine: That does sound like it has been fixed.
Christopher Pyne:Certainly fixed.
Alison Carabine: Now this time last year though you were threatening to strip NCRIS of its funding, which put 1700 research positions at risk. How do you account for your quite extraordinary conversion on the road to Damascus if not at least the road to CSIRO’s Discovery Centre?
Christopher Pyne:Well the university reform package provided the funds, $150 million to save the National Collaborative Research Infrastructure Scheme. We funded that, separately, when we couldn’t get it through the Senate, so I fixed it then for two years. Now we’re giving it $1.5 billion. So rather than thinking about what happened last year, all the 1700 people who work for the National Collaborative Research Infrastructure Scheme now they have at least a decade of certainty into the future. So people should be very pleased about that and they are very pleased about that.
Alison Carabine: Minister just finally then, there is also money to boost science, technology, engineering and mathematics skills in schools and universities which is terrific. Why then do we need this new visa category to encourage young entrepreneurs to move to Australia, considering the money you’re now investing in the STEM subjects, can’t we grow our own young entrepreneurs?
Christopher Pyne:Well over time that will definitely happen, and investings in science technology, engineering and maths in school, preschool and universities is obviously going to make a difference over time. We also need entrepreneurs coming to Australia right now and creating start-up businesses, so people who can show us that they have third party financial support we’ll give them a go here. If they don’t succeed, their visas won’t be extended. If they do succeed, we’ll have pathways for them for permanent residence. So one is a short to medium term policy and the other is a longer term policy. But this package is so comprehensive of course that we’re trying to cover the whole gamut of what can be done.
Alison Carabine: Christopher Pyne, just finally then, Ian Macfarlane: Warren Truss says the Nationals are underrepresented in Cabinet. Would you accept Ian Macfarlane back in the Cabinet room?
Christopher Pyne: Well Ian Macfarlane hasn’t been released from the Liberal Party and of course he’s signed a nomination form nominating for a seat that has been allocated to the Liberal Party in Groom, so he can’t unilaterally just join the National Party. So I think there’s quite a bit of water to go under that bridge yet.
Alison Carabine: Who would release them, would it be the LNP executive in Queensland?
Christopher Pyne: Well he- yes that’s exactly right. So he signed a contract with the Liberal Party effectively to say that he would be a Liberal candidate in a Liberal allocated seat, the seat of Groom.
Alison Carabine: And if he is released, would you welcome him back in Cabinet.
