The Rudd Labor Government will begin consultation with industry about reforming employee share schemes to provide greater assistance to start-up companies.
The Government has today released a discussion paper Employee Share Schemes and Start-Up Companies in line with our commitment to undertake a regulatory review into employee share schemes.
The Government understands that this is a significant issue that can directly influence the success of emerging start-ups, which is why it is consulting with industry on the barriers faced by start-ups, including the way that employee share schemes work.
The discussion paper covers areas that industry has so far identified as problematic, including set-up costs, valuation issues and the point at which employee shares attract taxation.
"Labor is committed to a a vibrant start-up sector and we want to support these companies to overcome any barriers to growth. This sector has an important role to play in Australia's future prosperity and innovation alongside modern business processes will be key to its success," said Senator Kim Carr.
Minister Assisting for the Digital Economy, Senator Kate Lundy, said the Government's Advancing Australia as a Digital Economy: An Update to the National Digital Economy Strategy also recognised more could be done to support Australian start-ups, including addressing the cost and complexity of administering ESS.
"High tech start-ups are important for Australia to remain globally competitive," Senator Lundy said.
"We want to hear from the start-up community about how we can help them attract and retain skilled and experienced employees."
Assistant Treasurer David Bradbury said the discussion paper will help the Government to determine what can be done to strike the right balance between incentives and taxation.
"We want to ensure we have a flexible and simple incentive system for employees but protect the integrity of the Australian taxation system," Mr Bradbury said.
"We want to hear industry's views on the merits of the various reform options".
The discussion paper is available on the the Treasury website. Interested stakeholders are invited to provide a written submission to the review by close of business on 30 August 2013.
The review may be contacted by email at ess@treasury.gov.au or ventureaustralia@innovation.gov.au.