Australia’s next boom: Why young entrepreneurs need the same backing as first home buyers

If policymakers can waive stamp duties and underwrite deposits, they can also slash taxes and red tape for entrepreneurs. Incentivising innovation zones could spark local manufacturing and reduce reliance on imports.

Australia’s governments have poured significant effort into helping first home buyers enter the property market. A flagship policy is the First Home Guarantee scheme, recently expanded to allow any first home buyer to purchase with just a five per cent deposit. This expansion, launched ahead of schedule on 1 October 2025, removed caps on the number of applicants and income limits, effectively opening the door for thousands more young Australians to buy a home. The program has already supported over 185,000 Australians into home ownership since inception, reflecting the desperate push to realize the “Australian dream” of owning a home.

Policymakers tout not only the social benefits of home ownership but also the economic spin-offs these incentives generate. When a first-time buyer purchases a house, it often stimulates construction activity, home renovations, and ancillary spending on furnishings – all of which create jobs in the economy. State governments, for their part, see a fiscal upside: even with first home buyer concessions, property transactions still reap substantial stamp duty revenue on many sales. In fact, stamp duty has become a lucrative (if controversial) income stream for states, rising dramatically alongside property prices. For example, the stamp duty on a median-priced Sydney house soared from the equivalent of 4five per cent of annual household income in 2000 to 120 per cent of annual income in 2024 – a burden which underscores how much cash these transactions funnel to government coffers. While this windfall helps fund public services, economists have long warned that heavy reliance on stamp duties distorts the housing market and drags on economic efficiency. Nonetheless, there’s no denying that robust housing turnover pads government budgets in the short term.

Government-backed housing schemes can also be politically popular, but their effectiveness is debated. Critics note that such incentives may simply inflate demand and prices rather than improve affordability. As independent economist Saul Eslake observed, any policy that enables Australians to spend more on housing - be it grants, stamp duty concessions, or low-deposit guarantees - tends to drive prices up and ultimately does little to increase the overall home ownership rate. Indeed, recent data show first home buyer loans jumped 3.8 per cent (to 125,000 loans in the year to March 2025) largely thanks to these schemes, suggesting the main outcome is bringing forward purchases rather than fundamentally altering who can buy a house. Still, from the government’s perspective, the housing push delivers visible results: more young families with house keys in hand, more construction cranes in the sky, and more revenue flowing in.

The missing piece: Where are the start-up incentives?

While helping young Australians buy houses is a laudable goal, it raises an uncomfortable question: What is being done to help young Australians start businesses with equal fervor? As a Public Accountant with 10+ years of experience advising small businesses, I’ve seen first-hand how budding entrepreneurs often struggle to get a toehold. Launching a start-up or manufacturing venture in Australia comes with steep upfront costs and risks – from high wages and rents to complex regulations and taxes. Unlike saving for a house deposit (where government grants or guarantees might chip in), a would-be entrepreneur finds far fewer hands reaching out to help them accumulate business capital or reduce their initial costs.

This imbalance in focus is striking. Every dollar a young Aussie sinks into a house deposit is capital not going into a new enterprise. Yes, home ownership is a foundation for financial security, but so is business ownership and innovation, which can create multi-fold benefits: jobs, exports, technological advancement and a broader tax base in the long run. If governments are willing to underwrite 1five per cent of a home loan (the portion guaranteed under the five per cent deposit scheme) to get someone into a house, shouldn’t we consider comparable support – or at least an equitable policy effort – to get someone to launch the next Aussie-made product or service? The current landscape suggests we have a policy gap: an energetic push for “homes today” but a timid approach to seeding the industries of tomorrow.

To be fair, there are some government programs aimed at entrepreneurs. For instance, the federal government’s Industry Growth Program is offering grants up to $5 million to help innovative start-ups and small businesses commercialise their ideas. This is part of a broader $15 billion National Reconstruction Fund strategy to rebuild Australia’s industrial capability and encourage a “Future Made in Australia.” The Industry Minister Ed Husic has explicitly said that “turning Aussie know-how into thriving businesses and secure, well-paid jobs is at the heart of a Future Made in Australia”. According to Husic, over 340 businesses have already accessed advisory services under this program, building a pipeline of projects ready for commercialization. Additionally, longstanding measures like the R&D Tax Incentive provide refundable tax offsets (up to 43.5 per cent of qualifying research spend) for companies developing new technology, which many start-ups leverage. These initiatives demonstrate that the government recognizes the importance of innovation and has begun planting some seeds.

However, the scale and visibility of start-up support pale in comparison to the highly publicized housing incentives. The uptake numbers tell the story: a few hundred firms getting support versus hundreds of thousands of home buyers being helped. Moreover, the hurdles to entrepreneurship remain high. Young Australians with a clever invention or business idea often still face the stark reality of needing to save or borrow significant funds to get started, all while navigating a high-cost environment. It’s no surprise that some give up or even take their talents overseas to places where early-stage business support is more generous.

Leveling the playing field: Bold ideas to spur entrepreneurship

If Australia is serious about securing its economic future, we need to motivate and empower our young entrepreneurs with the same zeal we apply to first home buyers. This could mean adopting bold, unconventional ideas in our policy mix. One proposal gaining traction is the creation of special enterprise zones - areas where start-ups and manufacturers enjoy temporary tax breaks, lower regulatory burdens, or other incentives to get off the ground. Around 7five per cent of countries worldwide use special economic zones (SEZs) to attract investment. These zones typically offer a differentiated tax system, streamlined approvals, and even infrastructure support to entice businesses. In essence, a special economic zone is a designated area with more favourable economic regulations and incentives than the rest of the country.

Imagine an "Australian Innovation Zone" in a regional center or industrial park: within this zone, a start-up founder might pay zero or minimal corporate tax for the first few years, enjoy reduced payroll tax or GST concessions, fast-track permits, and access subsidized facilities. Such conditions might sound radical, but they could dramatically lower the barriers to starting production locally. China-style zones were instrumental in that country’s explosive manufacturing growth - Australia could tailor a version to suit our legal and economic context, focusing on strategic industries. The Northern Territory is one region where leaders and economists have floated this idea, citing the need for a one-stop-shop for investors and special tax treatment to “crystallise... opportunities” up north. Thus far, the federal response has been cool, fearing distortion or competition between regions. But the core concept remains powerful: remove some shackles from enterprise and it will flourish, yielding more jobs and ultimately more tax revenue in the long term.

Tax incentives targeted at new businesses are another lever. We have examples to draw on: the opposition (Coalition) earlier this year proposed an “entrepreneurship accelerator” tax scheme to spur start-ups if elected. Under this plan, a new small business would be taxed on only 25 per cent of its first $100,000 of income in the first year (effectively a 75 per cent tax reduction on those earnings). The concession would then taper off over the next two years as the business grows. The idea behind such an approach is to let fledgling companies reinvest what they would have paid in tax back into the business – fueling faster growth and hiring. Ambitious targets accompanied the plan: growing the number of small businesses by 350,000 within four years. Whether or not one agrees with the specifics, this proposal shows there are tangible ways to reduce the financial strain on new entrepreneurs in those critical early years. It’s a stark contrast to expecting a start-up founder to shoulder a full tax load from day one, which can feel like trying to lift-off with lead weights attached.

Besides tax and zone incentives, cultural and educational support is key to motivating young Aussies to become entrepreneurs. We could expand mentorship programs, startup incubators, and public challenges or prizes for innovation. The goal should be to send a clear message: if you’re a young Australian with a big idea, your country will back you. Just as we celebrate someone buying their first home, we should celebrate someone opening their first business or factory, treating it as an achievement of equal nation-building value.

A Future Made in Australia: Homegrown success in housing and industry

Australia’s economic story has long been tied to real estate and resource extraction, but our future prosperity demands that we also become creators and innovators. The current emphasis on first home buyer assistance, while addressing a genuine social need, highlights how responsive governments can be in one area of young people’s lives. It’s time to bring that same urgency and creativity to nurturing entrepreneurs. We need policies that acknowledge a simple truth: encouraging a generation of job creators is just as important as enabling a generation of homeowners.

The good news is there are signs of progress. The federal government’s investments in manufacturing and technology (like the National Reconstruction Fund and targeted production incentives for critical minerals and hydrogen) indicate a recognition that Australia must rebuild its industrial capability. Ministers speak of adding to our “industrial muscle” and creating secure jobs through innovation. These efforts are promising, but they must scale up and broaden to truly spark a start-up renaissance. It will require persistence and perhaps stepping outside conventional policy comfort zones.

Australia’s young entrepreneurs are brimming with ideas – I see it every tax season in the excitement of clients sketching out new ventures. With the right incentives and support, today’s ambitious tech developer, designer, or manufacturer could build the next Atlassian or Cochlear on home soil, rather than seeking greener pastures abroad. The payoff to the nation would far exceed any upfront tax concessions or grants given. As one prominent business advocate noted, “Investment today is production, consumption and jobs tomorrow.” In other words, backing start-ups now means a richer Australia later.

In conclusion, helping Australians buy their first home should remain on the agenda – but let’s not let the home ownership narrative overshadow the entrepreneurship narrative. We can do both. A balanced approach would continue easing the path to home ownership and aggressively tear down obstacles for those eager to launch businesses. By doing so, we seed the growth of new industries and reduce reliance on overseas goods and ideas. It’s time our policymakers show the same desperation and determination for First Home Buyers and First-Time Founders alike. With bold incentives and a hopeful vision, we can inspire a generation of innovators to build a truly self-reliant, prosperous Australia – one start-up at a time.

Puneet Singh is the founder and principal accountant at Nanak Accountants and Associates.