Published on Jan 25, 2016
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The Australian Government is set to take a more lenient stance on bankruptcy and insolvency in an effort to boost innovation.
Last month Prime Minister Turnbull made his innovation statement which tipped some changes to insolvency laws. Most notable was a reduction in the wait time to start a new business from three years to one year for an individual with a personal bankruptcy, as well as the ability for a businesses to trade while insolvent.
Research suggests economies operating in a legal structure with a strong emphasis on protection of creditor rights demonstrate lower levels of innovation. Those that adopt a more forgiving approach to bankruptcy and insolvency by limiting liability and penalties foster a culture of innovation and faster industry growth.
It is hoped the new focus on innovation will challenge Australia’s culture of risk avoidance, drive our post mining boom economy and encourage innovation and change by introducing new tax offsets for early-stage investments and allowing crowd-funding.
The new laws, which will come to place in July 2016, will provide a 20 per cent non-refundable tax offset for business start-ups as well as capital gains tax exemptions – all designed to attract a higher level of private investment and seed funding.
Will businesses in the Cessnock LGA benefit from the change? Let us know what you think in the comments section.
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Topic: Advance Cessnock City, innovation, legislation