{"id":6953,"date":"2020-12-22T02:43:30","date_gmt":"2020-12-22T02:43:30","guid":{"rendered":"https:\/\/www.innovationaus.com\/?p=15792"},"modified":"2020-12-22T02:43:30","modified_gmt":"2020-12-22T02:43:30","slug":"govt-dismissive-of-tech-concerns-on-firb-changes","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2020\/12\/22\/govt-dismissive-of-tech-concerns-on-firb-changes\/","title":{"rendered":"Govt \u2018dismissive\u2019 of tech concerns on FIRB changes"},"content":{"rendered":"

The federal government was<\/strong> \u201cdismissive\u201d of concerns raised during consultations about the impact of reforms to Australia\u2019s foreign investment laws on local tech companies, with these left unaddressed in the final legislation, according to Q-CTRL founder Professor Michael Biercuk.<\/p>\n

During the last sitting fortnight of the year, significant reforms to Australia\u2019s foreign investment framework were passed with bipartisan support.<\/p>\n

The reforms include a new national security test with no monetary threshold for any company deemed to be a national security business, which are defined as \u201cendeavours that if disrupted or carried out in a particular way may create national security risks\u201d. The definition likely covers a number of local tech companies and startups.<\/p>\n

The legislation also hands the Treasurer significant powers to block or divest an investment.<\/p>\n

\"Michael
Michael Biercuk: Disappointing Treasury response to the legitimate concerns of deep tech<\/figcaption><\/figure>\n

There are widespread concerns, including from the Australian Investment Council, the Law Council of Australia and the Victorian and Queensland state governments, that the changes will act as a disincentive for foreign investors looking at Australian companies and create significant levels of uncertainty for local businesses.<\/p>\n

In a submission to government, Professor Biercuk said the changes would \u201cimperil\u201d the future of the Australian quantum sector in particular, due to its reliance on foreign investment.<\/p>\n

Professor Biercuk also participated in Treasury-led roundtables on the legislation and asked multiple questions about the impact of the reforms on the venture capital-backed tech sector but was left \u201cdisappointed\u201d by the \u201cdismissive responses\u201d from the Treasury.<\/p>\n

\u201cFor instance, when discussing the outsized potential impact of this legislation on new companies seeking VC investment, the somewhat anodyne response was \u2018Treasury is aware that a larger number of entities will be captured in the updated regime\u2019,\u201d Professor Biercuk told InnovationAus.<\/p>\n

\u201cTreasury stated that the fees associated with the review regime are an impost on investors. When asked whether it would be legislated that fees could not be passed from investors to investees, Treasury responded, \u2018it\u2019s up to an individual company to secure an appropriate deal with its investors\u2019.<\/p>\n

\u201cThis response dismisses the standard expectations of the VC sector where the costs of a deal are generally borne by the organisation taking investment.\u201d<\/p><\/blockquote>\n

Professor Biercuk also said that he asked the Treasury officials to whitelist certain countries and exempt their investors from the screening, such as the other Five Eyes countries.<\/p>\n

\u201cTreasury responded that they are pursuing a \u2018non-discriminatory\u2019 approach to jurisdictional enforcement. This does not comport with the clearly discriminatory nature of national security and intelligence sharing, but Treasury did not provide further clarification or justification for this gap,\u201d he said.<\/p>\n

There is still hope for some of the issues with the reforms to be ironed out in the detailed rules through legislative instruments, Professor Biercuk said, with an aim to make the definition of a national security business to be more specific and exempt some early-stage startups.<\/p>\n

\u201cWe are hopeful at this stage it remains possible to better define \u2018national security businesses\u2019 to refine focus on true businesses of concern, whose disruption would indeed pose a risk to national security,\u201d Professor Biercuk said.<\/p>\n

\u201cIt\u2019s hard to justify this definition for a new startup that\u2019s been around six or 12 months and seeking international seed funding. Accordingly, we remain eager to engage with Treasury in order to craft suitable definitions that do not unreasonably burden emerging technology businesses in exciting but research-intensive areas.\u201d<\/p>\n

The post Govt \u2018dismissive\u2019 of tech concerns on FIRB changes<\/a> appeared first on InnovationAus<\/a>.<\/p>\n\n

This post was originally published on InnovationAus<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

The federal government was \u201cdismissive\u201d of concerns raised during consultations about the impact of reforms to Australia\u2019s foreign investment laws on local tech companies, with these left unaddressed in the final legislation, according to Q-CTRL founder Professor Michael Biercuk. During the last sitting fortnight of the year, significant reforms to Australia\u2019s foreign investment framework were…<\/p>\n

The post Govt \u2018dismissive\u2019 of tech concerns on FIRB changes<\/a> appeared first on InnovationAus<\/a>.<\/p>\n","protected":false},"author":626,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1894,1895,1896,1897,1898,1892,1899,1893],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/6953"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/626"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=6953"}],"version-history":[{"count":1,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/6953\/revisions"}],"predecessor-version":[{"id":6954,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/6953\/revisions\/6954"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=6953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=6953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=6953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}