The Turnbull government has announced a $1.1 billion package of 24 measures to improve drive innovation across the Australian economy.

The National Innovation and Science Agenda will include concessional tax treatments for investors who support “innovative start-ups”.

First, investors will receive a 20 per cent non-refundable tax offset on the amount of their investment, capped at $200,000 per investors, per year.

Second, investors will receive a 10-year capital gains tax exemption for investments held for three years.

The government said the new tax incentives – which are expected to be in place by early 2016 – will combat the so-called ‘Valley of Death’ (the period between the initial funding of a start-up and when it starts generating revenue).

The government believes more than 4,500 start-ups are missing out on equity finance and additional funding each year.

Yesterday’s announcement will also see changes to the structure of venture capital partnerships.

Early stage venture capital partnerships will receive a 10 per cent non-refundable tax offset on capital invested in start-up companies.

In addition, the maximum size for early stage venture capital partnerships will be increased from $100 million to $200 million; and early stage venture capital partnerships will no longer need to divest from a company when its value exceeds $250 million.

Both early stage and normal venture capital partnerships will be allowed to undertake a “broader range of investment activities” with a “greater diversity of investors”, said the government.

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