The Federal Government should introduce a publicly supported venture capital (VC) fund to enhance the entrepreneurial environment in Australia, according to the Institute of Public Accountants (IPA).

“We acknowledge that the Government through the National Innovation and Science Agenda is considering measures to increase the availability of VC funding in Australia,” said IPA chief executive officer, Andrew Conway.

“The VC fund could be established by either providing a significant proportion of funds to assist VC managers to attract other institutional investors to publicly supported VC funds or by becoming an institutional investor in a range of individual VC funds.

“This level of support by government to small business equity finance will improve the entrepreneurial environment in Australia and act as a catalyst in identifying and overcoming hurdles to successful and profitable investment.

“Many young firms face funding problems, particularly in uncertain technological or new knowledge environments because of their unattractiveness to bank lenders.

“It is a lost opportunity to the Australian economy when innovative firms with high commercial potential are constrained by the absence of external finance.

“Any government with a strong commitment to economic growth via research and development and investment which facilitates greater enterprise and innovation activity must ensure that early-stage venture capital finance remains available to high potential, young firms.

“Otherwise, we risk a reduction in new commercialisation opportunities stemming from national investments in science and technology,” said Mr Conway.

These recommendations form part of the IPA’s pre-Budget submission. For more information go to: