Allan Blood, the founder of Victorian Hydrogen & Ammonia Industries Limited, has opted to relocate his ambitious $3 billion coal-to-fertilizer project from Victoria’s Latrobe Valley to New Zealand’s Southland region. This decision followed claims that the Victorian government was uncooperative and unsupportive of his efforts.
Blood’s investors have thrown their support behind the move, drawn to what he describes as New Zealand’s drastically different and more welcoming business environment compared to Australia.
In an interview with nine.com.au, Blood expressed his frustration, stating, “We grew tired of the situation and decided to come here, where the government is incredibly supportive. The level of assistance, friendliness, and facilitation is remarkable.”
He further praised the New Zealand government, noting their proactive stance in facilitating business ventures, unlike their Australian counterparts.
Blood clarified that his decision was not influenced by changes in the Capital Gains Tax discount.
However, he cautioned that other entrepreneurs, especially young start-up founders, might interpret the situation as a sign to follow his lead and seek more supportive opportunities elsewhere.
“It would absolutely be a smart move… the system here is better,” he said.
“They can facilitate that without having to offer any money or incentives.
“It’s only a couple of hours from Melbourne or Sydney. Communication is easy, and in the world today with IT, you can run a business equally as well from NZ as you can from Australia.”
Blood said he is even considering floating his company on the NZX instead of the ASX in the wake of the federal budget.
He warned the Australian government is “flying in the face of what they want to achieve” by doubling down on taxes.
“That really was the sort of death kick… we were going to list our company in Australia, we may now consider having the primary listing here in NZ,” Blood added.
“From the standpoint of our investors, they would be far better off here than in Australia.”
Killing Australia’s entrepreneurial spirit
Bill Ovenden, the co-founder of Queensland bed sheet brand The Lad Collective, believes changing the CGT discount will stifle Australian entrepreneurship.
Australia has been the breeding ground some of the world’s most successful tech giants, including billion-dollar outfits Atlassian and Canva.
Ovenden is concerned the local start-up industry will shrink and entrepreneurial spirit will fade over the next few years.
“I feel like these sorts of sweeping taxation reforms are enough to sort of stop really smart, talented people with good ideas in their tracks,” Ovenden said.
“We have an awesome community of entrepreneurs here in Australia, but there are other countries out there that really need and want the talent that Australia produces.
“I can see a massive shift off-shore, primarily NZ.”
Ovenden said bootstrapped founders deserve to enjoy the fruits of their labour – but some higher-valued companies face up to 47 per cent capital gains tax.
NZ may be a natural fit for many future Australian business owners who want to avoid this tax altogether.
“They need to be rewarded for the hard work they put in,” he said.
“Even in a place like NZ â sure, it might not have as many people, but I do think that their government is far more supportive from a taxation standpoint.”
If there is a mass exodus of deep-pocketed investors and founders to NZ or the US, Australia could miss out on billions of dollars that will instead be pumped off-shore.
The co-founder of Melbourne start-up QSIC, Matthew Elsey, who now lives in the US, agrees that fellow Australian founders will now be rethinking the geography of their next venture.
“This is a sad state of affairs. It is part of the Aussie spirit to have a crack and give it a go. Jim is getting us going all right. Going overseas,” he said in a post on LinkedIn.
“If you’re optimising for success and you look at this tax treatment, you now need to be way more successful in Australia to achieve the same outcome you could overseas.
“In an industry where most businesses fail, no one will take that risk.”
