Tax breaks to encourage risk-taking

Start-up companies will get a leg-up under federal government tax breaks to encourage risk-taking.

Treasurer Scott Morrison on Wednesday introduced to parliament a suite of tax changes, including concessional treatment for start-up backers and tax offsets for venture capital investors.

The measures are specifically designed to reward risk-takers.

"We need to earn more by increased innovation to drive greater productivity," Mr Morrison told parliament on Wednesday.

"We are backing Australians in our transitioning economy."

The government wants to bridge the high-risk gap between initial funding in a start-up company and when it starts generating revenue.

Investors will get a 20 per cent tax offset incentive, along with a 10-year exemption on capital gains tax if investment in shares are held for at least 12 months.

"Difficulty attracting funding can prevent entrepreneurs from developing and commercialising their ideas," Mr Morrison said.

Venture capital investors would get a 10 per cent tax offset on money pumped into early-stage partnerships.

The measures were part of the government's innovation and science agenda, Mr Morrison said.

"We are setting up the environment to reward our innovators and our entrepreneurs who have the concepts and ideas and the passion that will see that they benefit all Australians."