Legislative Assembly for the ACT: Week 9 Hansard (19 August) . . Page.. 3911..
Partnership (Venture Capital Funds) Amendment Bill 2004
Debate resumed from 14 May 2004, on motion by Mr Stanhope:
That this bill be agreed to in principle.
MR SMYTH (Leader of the Opposition) (11.32): Mr Speaker, the Liberal Party will be supporting the Partnership (Venture Capital Funds) Amendment Bill 2004. The purpose of this bill is to implement a new form of partnership. This new type of business entity is intended to facilitate raising venture capital.
This bill will establish the framework for the registration and regulation of what are to be called "incorporated limited partnerships". These partnerships will be incorporated but they will be a legal entity separate from the partners in it and they will be able to be used as vehicles for accumulating and managing venture capital. This bill will bring the ACT into line with New South Wales and Victoria. What is being proposed is also part of a national scheme being put in place by the federal government and the states and territories to enhance access to venture capital.
This legislation demonstrates an essential feature of the approach that the Liberal Party believes should be adopted to encourage economic activity in the ACT-that is, to get the policy environment right. The market can work within a good policy framework to deliver economic benefits. Under this bill, people with local innovations and new businesses will be able to seek capital to fund their businesses. A considerable pool of funds exists in any community. The key issue is how to mobilise these funds. New forms of entities, such as incorporated limited partnerships, will assist in raising much needed development capital.
These new forms of partnership will also provide benefits such as flowthrough tax benefits and the benefit of limited liability for the "limited partners". It is a valuable new approach to accumulating capital venture. This initiative will underpin things like Creative Canberra and will encourage economic prosperity, increased employment opportunities and enhanced community benefits.
MS DUNDAS (11.34): After much consideration, I am willing to support this legislation because I agree that more investment in local start-up businesses would be of great benefit to the territory. Venture capital is an essential catalyst for new industries, for jobs, for a healthy economy, and for dynamic wealth creation. Venture capital includes start-up and seed capital, expansion stage capital, later stage development capital, and finance for management buyouts and buy-ins of established businesses.
The Democrats have previously advocated a mandated 1 per cent investment of super fund portfolios into risk or venture capital. Venture capital in Australia has helped small enterprises start up and grow, with some notable examples being Energy Development Ltd, Austal Ships Ltd, LookSmart, and ResMed.
While venture capital is available regardless of legislative incentives, it increases enormously if such incentives exist. The Commonwealth Taxation Laws Amendment (Venture Capital) Act 2002 created such incentives, and I can appreciate why the ACT