Review resumes on employee share schemes for start-ups

The federal government has resumed a review on employee share schemes that had paused pre-election when the government entered caretaker mode. Submissions that were lodged previously with the government will be considered as part of this consultation process and new submissions will be accepted now.

The government has also announced it will commence direct consultations in Melbourne, Sydney and by teleconference with interested stakeholders for two weeks from 28 January 2014. Expressions of interest in presenting to the review are invited up to 24 January 2014 at http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2014/Employee-Share-Schemes-and-Startups.

AusBiotech will be making a submission that the 2009 changes should be repealed and will include the comments made in submissions by AusBiotech members in response to the previous call as well as new submissions. AusBiotech members may contribute comment for the submission up to 5 February or submit directly to the review by 7 February 2014. Submissions may address any or all of the questions below:

• The 2009 changes and their effects on businesses
  If you were a start-up prior to 2009-10, did you change your ESS arrangements following the 2009-10 Budget changes? If so, how?
  What were the compliance impacts on your business of the new withholding and reporting requirements introduced in 2009-10?
  Are there other impacts on your business from the changes in 2009-10?

• What are the barriers to offering an employee share scheme?
  If you are a start-up, do you offer shares or options through an ESS to your employees? What other benefits do you offer your employees? Are these sufficient to retain or attract the necessary employees? If you do not offer an ESS, what are the major reasons why not?

• What steps should be implemented to overcome these barriers?

• What would be the broader economic benefits in implementing these steps?

• What is a start-up?
  What are the key characteristics of the type of start-up that is most likely to make use of an ESS?

• Any other costs or issues associated with the implementation of an employee share scheme
  What difficulties and costs do start-ups face in valuing shares or options for an ESS?
  If you are a start-up, do you use an independent valuation? Why?
  As a start-up, how often do you carry out valuations for ESS purposes?
  Do you require a valuation of your start-up for other purposes? What type/s do you use?
  What difficulties do start-ups face with respect to corporate regulation of ESS?
  Are there other regulatory requirements that impose costs or difficulties for start-ups wanting to offer an ESS?