Capital punishment

Happy Halloween to all the ghosts in the machine.

If you’re building a startup, uncertainty comes with the territory. And Canberra seems determined to ensure you score an extra helping from the tax system.

Treasurer Jim Chalmers brought the revised startup tax package to Parliament this week, including the capital gains concession for eligible founders, employees and investors. The government has partially listened: the innovation activity test is less restrictive, and there’s a new pathway to protect existing shareholders as companies mature.

But there’s a basic question left hanging: how much time should someone building a startup spend proving it fits Canberra’s definition of innovation?

I’m also reminded that when it comes to Kaftaesque Kamberra Kompliance, NDIS recipients are required to regularly prove their lost limb hasn’t grown back, their sight hasn’t returned and their child with Down syndrome has seen their chromosome 21 transform, yet again.

Which is why Wentworth MP Allegra Spender’s alternative deserves a proper hearing. She’s proposing a 40% CGT discount across a broader range of business assets, without time limits and employee/revenue thresholds – at no additional cost to the budget.

Yes, it’s a smaller discount than the planned 50% for qualifying startup investments, but the fine print there is “qualifying”. Share the love, Jim. Offer incentives to more founders and investors who can focus on building over bureaucracy, knowing the rules before they take the risks.

The same bill’s R&D changes remain contentious, particularly for biotech companies, and with the bill already passed in the lower house, the Greens are ready for a fight in the Senate

This week also had some reminders of what we can achieve.

Sydney’s MP Space raised $23 million in a Blackbird-led seed round to manufacture spacecraft power systems here. Its founders, former Tesla engineers Jay Manley and Sam Paterson, are taking batteries into orbit

In Adelaide, Airtree invested $5 million in Metacognition, taking its pre-seed funding to $15 million. The startup is developing software to help robots understand instructions and act reliably in the real world

They’re who to keep in mind as we argue about innovation policy – the belief and risk before anyone gets to worry about CGT.

Meanwhile, in a financial galaxy far, far away, Anthropic filed its IPO prospectus, with a possible US$2 trillion valuation being floated ahead of an expected November listing. The pitch in 90+ pages of risk disclosures boils down to “what doesn’t kill you only makes you richer”.

Unless you’re Google’s dad, Alphabet, which lost US$500 billion in market cap in a Shakespearean example of “hoist of their own petard” by AI. (Vale, Patrick Stewart).

Back in Canberra, the Digital Duty of Care Bill passed the lower house with changes targeting AI chatbots that encourage children to depend on them in place of humans. It still also needs Senate approval.

Finally, a moment away from money and machines.

Parliament paused to honour Helen Haines after the horrific attack that saw her lose both legs. The tributes spoke to her kindness, integrity and commitment. Argue fiercely about tax, tech and our future, but bring kindness and empathy to the table too.