Twenty years running a technology company in Australia. In that time I've watched every federal government announce a bold new innovation strategy, fund it just enough to generate a press release, then quietly gut it in the next budget cycle.
This week's budget was no different.
The government announced a National Resilience and Science Council. It sounds important. It will "coordinate and align public innovation investments with Australia's economic objectives." There will be meetings. There will be a report. The report will recommend things. The things won't get funded. We've done this before.
In the same budget, they axed the $760 million Australia's Economic Accelerator program — the one program specifically designed to commercialise research into actual products and businesses. Researchers who spent months preparing grant applications found out their work was wasted. RMIT alone had 85 applications in the pipeline. Gone.
Robbing Peter to pay Paul. That's not a strategy. That's a shuffle.
The Gap Isn't Ideas. It's Follow-Through.
Australia has no shortage of smart people. Our universities produce world-class research. CSIRO has a Nobel Prize on the shelf and Wi-Fi on the patent ledger. We punch well above our weight in scientific output per capita.
But scientific output isn't economic output. Papers don't create jobs. Patents that get licensed to American companies don't build Australian industries.
The gap is commercialisation. Taking research from a lab and turning it into a company that employs people, pays taxes, and competes globally. Every country that does innovation well has figured this out. Australia hasn't.
What Other Countries Actually Do
Israel: Share the Risk
Israel has 9.8 million people — half the population of Sydney's greater metro area. It has more NASDAQ-listed companies than all of Europe combined. More startups per capita than anywhere on Earth.
This didn't happen by accident. The Israeli government, through the Innovation Authority, covers 20 to 50 percent of R&D costs for startups. If you fail, you don't pay it back. If you succeed, you repay as royalties. The government shares your downside risk.
Their incubator program funds up to 85 percent of startup costs for two years. Not a tax credit you claim after the fact. Actual money, upfront, when you need it most.
In the 1990s, Israel's government seeded the venture capital industry directly. They put $100 million into ten VC funds, grew the ecosystem, then privatised them. They built the infrastructure for innovation from scratch.
And critically, they created a pipeline. Mandatory military service includes elite technology units where young Israelis learn cybersecurity, AI, and communications engineering. They exit at 21 with world-class skills and a network of future co-founders. Then they start companies.
Singapore: Treat Innovation Like National Security
Singapore has 5.9 million people and no natural resources. They decided thirty years ago that brains are the resource.
The result is a government that makes it absurdly easy to build a technology company. The Enterprise Development Grant covers up to 70 percent of business transformation costs. Proof-of-Value grants provide up to $800,000 SGD for startups past the prototype stage. The central bank runs a $60 million fintech innovation fund.
Tax? Full exemption on your first $100,000 of profit. Fifty percent exemption on the next $200,000. Corporate rate is 17 percent. They want you to reinvest.
Singapore's sovereign wealth funds — GIC and Temasek — actively invest in local startups. The government doesn't just encourage innovation. It participates.
Estonia: Remove the Friction
Estonia has 1.3 million people. Smaller than Adelaide. It produced Skype, Wise, Bolt, and Pipedrive. More unicorns per capita than anywhere in Europe.
They digitised everything. Ninety-nine percent of government services are online. You can register a company, file taxes, sign contracts, and open a bank account without leaving your desk. Their e-Residency program lets anyone in the world start an EU company in hours. Over 100,000 people from 170 countries have done it.
Their tax system is elegant. Zero percent corporate tax on reinvested profits. You only pay tax when you take money out of the company. This single policy incentivises growth over extraction.
What Australia Does Instead
We create advisory councils. We commission reviews. We announce billions in "commitments" spread across forward estimates that get quietly revised downward. We scatter funding across dozens of bodies — ARC, CSIRO, ARENA, NHMRC, state innovation offices — and then wonder why nothing is coordinated.
Our R&D tax incentive is a reimbursement program, not an investment program. You spend the money first, claim it later, and hope the ATO doesn't audit you into oblivion. This week's budget increased the headline rate but removed "supporting R&D" eligibility — the trials, integration work, and process development that hardware and deep tech companies actually need. The rate goes up, the claimable base shrinks. Net benefit for real innovators? Less than advertised.
We don't have a startup visa. We don't have a military-to-tech pipeline. We don't have sovereign wealth actively investing in local startups. Our Future Fund — one of the largest sovereign wealth funds in the world — barely touches Australian technology companies.
And our immigration system? Sixty-eight percent of permanent arrivals aren't personally skills-assessed. We're not strategically importing innovation talent. We're running a family reunion and humanitarian program with a skilled migration wrapper.
I'm not arguing against family or humanitarian migration. I'm arguing that if we're going to claim we have a "skilled migration program," the skills should be the point. Singapore and Estonia actively recruit founders and technologists. We recruit whoever fills the current shortages in aged care and hospitality.
The Personal Cost
I run Kudosity — a twenty-year-old Australian messaging company pivoting into AI-powered conversational platforms. I'm spending my own money on API costs, hardware, and training. I'm upskilling at midnight because there's no government program that fits.
I'm too established for startup grants. Too small for enterprise incentives. Too innovative for existing industry bodies. I fall through every crack in a system that was designed for a world that doesn't exist anymore.
My competitors in Singapore get 70 percent of their transformation costs covered by the government. My competitors in Israel get their R&D co-funded with no repayment if they fail. My competitors in Estonia pay zero tax on reinvested profits.
I get a BAS reminder and a budget announcement about a council that will "coordinate and align" things.
What Would Actually Work
If Australia were serious about innovation, here's what it would look like.
A single Innovation Authority. One body. Clear mandate. Actual funding power. Not an advisory council — a decision-making entity that can write cheques, like Israel's Innovation Authority. Consolidate the alphabet soup of funding bodies into one front door.
Risk-sharing, not reimbursement. Fund R&D upfront. If the company fails, write it off. If it succeeds, take royalties. Align the government's incentives with the founder's incentives. Stop making founders carry all the risk while the government takes none.
A founder visa. If you're building a scalable technology company and you want to do it in Australia, you should be able to get residency. Full stop. Singapore does this. Estonia does this. We should do this.
Zero tax on reinvested profits. Estonia's model. You only pay corporate tax when you extract money from the company. This single change would transform investment behaviour overnight.
A commercialisation pipeline. Stop cutting the programs that bridge research to market. The AEA was doing exactly this. It's gone now. Replace it with something permanent — not another program that gets axed in three years.
Sovereign wealth that invests locally. The Future Fund should have a mandate to allocate a meaningful percentage to Australian technology companies. Not as charity. As investment. If Temasek can do it for Singapore, the Future Fund can do it for Australia.
The Bottom Line
Australia's R&D spending is 1.7 percent of GDP. The OECD average is 2.7 percent. Israel spends 5.4 percent. South Korea spends 4.9 percent. We're not even in the conversation.
Every year we don't fix this, more founders leave. More IP goes offshore. More Australian ideas become American or Singaporean companies. We keep the research, they keep the revenue.
I love this country. I've built my business here for two decades. But I'm tired of watching governments announce innovation strategies they have no intention of funding. I'm tired of being told to be grateful for a tax credit that arrives eighteen months after I needed the money. I'm tired of competing against companies in countries where the government is a partner, not just a regulator.
Australia doesn't have an innovation problem. It has a commitment problem. And until the people writing budgets understand the difference between announcing a strategy and actually funding one, founders like me will keep doing it despite the system, not because of it.
