Luna’s Victorian FY21 Budget Summary
Got questions about the Victorian FY21 Budget and how it might affect you and your startup? Book a chat.
The ‘Empty Esky’ movement that encouraged road trips to support local businesses was the light at the end of the tunnel for a devastating bushfire season. But the smoke had barely cleared before a world-wide pandemic hit, and the thought of leaving your own suburb was a long distance memory.
After what was a tough year, ‘Putting People First’ is the headline of Victoria’s FY21 State Budget. The Victorian budget focused on the people - creating jobs, building strong communities and taking care of those we love.
For startups, this Victorian Budget was like no other, providing a funding boost of $186m and a vote of confidence in Victoria's startup ecosystem. Startups have proven time and time again to be reliable job multipliers and a great way to kick-start the economic recovery of the State.
We’ve outlined everything you need to know in plain english below.
Boost to the Victorian startup ecosystem
“Innovation will drive productivity, will drive employment, and that is the key focus of the government”
Enough said! Here are the measures directly impacting Victoria’s startup ecosystem.
$50m in low-interest R&D Cash Flow Loans
At a glance: $50m in low-interest loans will be provided to innovative Victorian businesses and startups undertaking R&D in Victoria. The loan is intended to cover up to 80% of your forecast refundable tax offset.
🦉 A hint:: This measure allows Victorian businesses and startups to access cash UPFRONT to fund R&D activity. More detail will come in the following months, however, get in touch with someone in our accounting team if you’d like to understand more about the R&D tax offset and how you might be able to access the low-interest loans.
$40m for LaunchVic over the next 4 years
At a glance: LaunchVic is a cornerstone of Victoria’s startup ecosystem. $40m will be provided to LaunchVic over the next 4 years to continue its role as the State’s startup agency and advocacy. LaunchVic will also oversee the rollout of the Victorian Startup Capital Fund and the Women’s Angel Sidecar Fund (see details below).
🦉 A hint:: More details on LaunchVic’s future strategy will be announced over the coming months. Stay tuned to see how this could impact you!
The Victorian Startup Capital 'Fund of Funds' $60.5m
At a glance: The Victorian Startup Capital 'Fund of Funds' is the first VC fund established by the Victorian government and is a fund that invests in other funds. The government will invest $60.5m into the Victorian Startup Capital Fund for the purpose of boosting Victoria’s startup ecosystem to aid innovative early-stage startups to launch, scale, create jobs and kick-start the State’s economic recovery. The government provided funds will be matched by new private sector investors, aiming to unlock over $180m in total funding.
🦉 A hint:: In order to access the Victorian Startup Capital Funds you will need to be VC backed and be a Victorian based business. The Victorian Startup Capital Fund won't invest directly into your startup without VC backing. Reach out if you’d like to have a chat about how to navigate the VC world!
The $10m Women’s Angel Sidecar Fund
At a glance: $10m has been allocated to a new Women’s Angel Sidecar Fund to help female founders access capital. The fund will offer up to $250k in co-investments into women-led startups, aiming to encourage more women into entrepreneurship and addressing some of the access to capital challenges faced by female founders. It is expected that the fund will be matched by private sector investors, aiming to unlock up to $30m in funding.
☝🏻 Our tip:: Expected to come into play in the first half of 2021 - the fund will be managed by LaunchVic. They’ve got a cool dashboard on the startup ecosystem, which can also be used for investors and startups to help find each other.
Check the dashboard out here
The $25.7m Venture Growth Fund
At a glance: The Victorian Government is set to invest $25.7m directly into the Victoria startup ecosystem. The investments will be structured as a loan, rather than equity (meaning it wont have any adverse implications for your cap table). The purpose of the fund is to keep high growth and high potential businesses located in Victoria.
☝🏻 Our tip:: This is aimed at later stage startups with high-growth and that are revenue generating. The specific eligibility criteria is yet to be announced - stay tuned!
Measures boosting Jobs
In 2018-19, unemployment levels hit an 11-year low of 4.6% and the Victorian budget focuses on getting us back to pre-pandemic levels by supporting new job creation, subsidies to employers and upskilling the youth and women.
Job creation through the ‘Jobs Plan’
A number of measures were announced as part of the Victorian governments “Jobs Plan”, some of these include:
$619m of wage subsidies and creation of new work placements targeting Victorians who were most affected during the pandemic.
A new tax credit of 10 cents for every dollar an eligible employer pays of Victorian taxable wages above the previous years, encouraging SMEs to restore staff hours and hire new staff.
Eligible employers now have the option to pay payroll tax annually instead of monthly.
$64m Digital Skills and Jobs program, aimed at providing high quality, industry-led short courses and internships to reskill unemployed workers to transition to digital careers.
$1bn invested in the TAFE and training systems giving thousands of Victorians the opportunity to reskill and upskill. Via this funding 80k new subsidied training and free TAFE places will be made available.
$5 million will go towards a 2 year pilot program that will provide casual workers in priority industries with 5 days sick and carers pay at minimum wage.
More info on the government's Jobs Plan go here.
Photo by Pat Whelen on Unsplash
