‘No clear understanding’ of start-up sector in Budget

Tiltsta’s Bonny Morlak.
Tiltsta’s Bonny Morlak.

TECH start-ups on the Sunshine Coast have welcomed the Federal Budget's small business provisions but point out that they are of limited value to those with no shopfront and few assets.

As reported in the Daily, the budget was lauded as a huge win for small business and is expected to stimulate growth in the sector.

Business owners can now claim up to $20,000 expenses and the company tax rate was reduced by 1.5%.

Tiltsta co-founder Bonny Morlak said the budget reflected a poor understanding of the tech start-up sector.

"The new budget is trying to acknowledge that start-ups exist as an economic reality," he said.

"While that is nice, we are still not seeing the supporting start-up ecosystem that you find in, say California."

Tiltsta is a social mobile video app with a global audience and was considering moving to the Silicon Valley where conditions were more favourable, Mr Morlak said.

"Start-ups, especially tech start-ups, can grow so fast and will almost always operate internationally," Mr Morlak said.

"To put us in the same basket as SMBs shows that there is still no clear understanding on what the tech start-up sector needs."

TalentVine founder and managing director Justin Falk said the expanded tax concessions for Employee Share Schemes outlined in the budget were of real interest to tech start-ups.

"They would enable employees to share in, and benefit from, the future growth and success of the business," he said.

Employees currently have to pay tax on income derived from shares or options from their start-up employer, whether or not they earn income from these.

The budget has removed this requirement.

Mr Falk said his main asset was employees, and finding and retaining them was his main challenge.

"As a lean online business, we aim to have as little assets as possible," he said.

"Our most valuable asset, especially when looking to compete with overseas businesses, is getting the most skilled employees to work for us.

"The best talent know their value so want to have a vested interest in the business they work for."

Mr Falk said the ability to claim self-education expenses, which were once capped at $2000, was something vital for tech start-ups.

Topics:  budget 2015 small business startup

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