Legislation paving the way for up to 2000 university students and recent graduates to defer the cost of accessing startup accelerator programs through HECS-style loans each year has been introduced to Parliament.
Education minister Jason Clare introduced the Education Legislation Amendment (Startup Year and other Measures) Bill 2023 on Thursday, following a six-week consultation on the loan scheme late last year.
The Startup Year program – an election commitment first proposed by Labor in 2015 – is intended to help young innovators launch innovative companies in recognition of the “important role” that startups play in job creation and commercialising ideas.
“What happens in our universities can change the world. They are ideas factories; they are playing an even bigger role in nurturing our startup ideas from concept to commercial applications through higher education-based accelerator programs,” Mr Clare said on Wednesday.
“In 2020, over 3000 new jobs could be attributed to Australia’s eight most successful startups. The Tech Council of Australia estimates that new tech startups can contribute 30,000 new jobs and seven billion dollars in value by 2030.
“But creating a successful startup requires knowhow and we need to support the development of the skills needed to drive those business and technologies of the future, and that’s what this bill does.”
Under Startup Year, final-year undergraduate students, post-graduate students and recent graduates will be able to access up to two loans of up to $11,800 over their lifetime through the HECS-HELP scheme.
The loans will enable students to participate in higher education-based accelerator programs, which “build skills in entrepreneurship and connect students with the support, mentorship and facilities they need to develop their startup ideas”, Mr Clare said.
Like other HECS-HELP loans, the payment will be made directly to the higher education providers who run the accelerator programs, but additional assistance payments, such as youth allowance or Austudy payments, will also be available to students.
Higher education organisations will be required to register their programs, with places to be “prioritised for courses that demonstrate greater engagement with and representation of underrepresented groups”, including women, indigenous Australians and people with a disability.
“This removes a significant roadblock to participation in accelerator programs and will encourage a broader and more diverse range of programs to be available to a larger cohort of participants,” Mr Clare added.
The program is expected to cost the government $15.4 million over four years from the 2022-23 financial year, according to the explanatory memorandum accompanying the bill.
Universities Australia acting chief executive Peter Chesworth welcomed the bill and said it brings much-needed financial support for university entrepreneurs a step closer.
“Universities have always been nurseries of big and bright ideas that make our nation better and our economy stronger,” he said.
“Unfortunately, financial barriers sometimes hinder the progress of these innovations and their transformative flow-on effects, including the creation of new jobs and economic opportunities.
“Universities support the Albanese Government’s commitment to breaking down these barriers and supporting the commercialisation of new ideas and solutions to the challenges and opportunities facing our nation.”
The government expects the bill to pass before July to pilot Startup Year in the second semester, with a full rollout expected in 2024. The pilot would include a small number of places at a select number of higher education provider-based accelerator programs.
In a statement, Industry and Science minister Ed Husic, who launched the consultation in September last year, said the scheme would help “young Australians create more sustainable firms, generating great jobs and strengthening our economy”.
The bill will also amend the Australian Research Council Act 2001 to apply current indexation rates to funding for the 2022-23, 2023-24 and 2024-25 financial years, and insert a new funding cap for the 2025-26 financial year.
Mr Clare said this would result in “additional appropriation to the ARC of just over $1 billion”, ensuring the university research funding agency can “continue to support Australia’s research sector by funding the highest quality of fundamental and applied research”.
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