Prime Minister Tony Abbott wants businesses to work more closely with researchers and schools in a bid to create new jobs and industries.
The federal government will spend $400 million on tax breaks for start-up companies and innovation centres in a bid to kick-start the economy.
The announced withdrawal of Holden, Ford and Toyota from car making in Australia gave added momentum to the government talking to business and scientists about how best to create new industries and jobs.
The end result was the Industry Innovation and Competitiveness Agenda, released by Prime Minister Tony Abbott in Canberra on Tuesday.
Mr Abbott said new jobs would come from five sectors, each of which would have its own “innovation centre”: food and agribusiness; mining equipment and services; oil, gas and energy; medical technology and pharmaceuticals; and advanced manufacturing.
Venues for the centres have not yet been announced.
Start-up companies will receive a $200 million tax break in a bid to set up employee share schemes, which give workers a financial share of the company’s potential success.
Businesses with a turnover of less than $50 million will be able to provide employee share options at a small discount that will not be subject to up-front tax, as long as the employee holds the shares or options for at least three years.
The government will reverse Labor’s 2009 changes, which imposed immediate tax liability on employees with share options.
Treasurer Joe Hockey will consult industry before releasing draft legislation, which the government wants to start on July 1, 2015.
Australian Chamber of Commerce and Industry policy director John Osborn hopes Labor will support the changes.
“We can no longer let the tax system starve our small business start-ups of the critical cash flow they need to grow and reach critical mass,” Mr Osborn said.
The application process for the 457 visa scheme will be streamlined for businesses finding it hard to source skilled workers, but safeguards will remain to protect Australian workers.
“We want these to be a way of helping business to grow,” Mr Abbott said.
A new $12 million program will put more resources into schools for science and technology and encourage companies to form partnerships with schools, similar to schemes in the United States.
Greens deputy leader Adam Bandt said the government was sending mixed messages by cutting science spending to a 30-year low.
Chief Scientist Professor Ian Chubb said a new Commonwealth Science Council and the extra investment would help connect Australia’s strengths, future needs, comparative advantages and shared ambitions.
Industry Minister Ian Macfarlane said a review into the existing cooperative research centres could see some abolished but others expanded.
The CRCs would be aligned with the five innovation centres which would have a $188.5 million budget.
The first of the new centres would be rolled out from early 2015, with the aim of exploiting new global markets and supply chains, inventing and commercialising new products.