With a federal election on the horizon, there are fears among Australian start-ups that the industry is "going backwards" politically.

It was not long ago that Australians were promised an "ideas boom" on bus stop ads across the country as part of the Government's innovation agenda, but today that enthusiasm is harder to find.

Alex McCauley, chief executive of advocacy group StartupAUS, cited a rollcall of setbacks: the encryption legislation, which became law over the technology sector's vehement objections, as well an ongoing dust-up over research incentives.

He doubted there would be too many carrots for the companies he represents in the upcoming national vote.

"I'm not holding my breath for a lot of start-up-focused policies," Mr McCauley said.

Ashik Ahmed, chief executive of the workplace software company Deputy, agreed: "Ever since [former prime minister Malcolm] Turnbull left, I don't think there has been any interest shown at all."

A fight over encryption

This week, some of Australia's largest start-ups and venture firms backed a submission criticising Australia's new encryption law, properly known as the Telecommunications and Other Legislation Amendment (TOLA).

Aimed at allowing police access to the encrypted communications of criminal suspects, the signatories said the law created a "harmful perception" of Australian technology products, among other criticisms.

Despite the vehement objections of start-ups, Google and Facebook as well as privacy groups, both major parties passed the Act through parliament on the last sitting day of 2018, citing national security concerns.

"At a time when we should be leaning into Australia's tech potential, we're anchoring it with legislation that hurts us," Atlassian co-founder Scott Farquhar said in a statement.

Atlassian cofounders Scott Farquhar and Mike Cannon-Brookes have criticised aspects of the TOLA laws. ( Reuters: Shannon Stapleton )

The fight has left the technology industry quite "scarred", according to Sarah Moran, chief executive of Girl Geek Academy. "I think that they think we're a fringe group with fringe issues, but that's just not true anymore," she said.

It is not that Canberra is trying to hurt start-ups, according to Rick Baker, partner at Blackbird Ventures. "It's just that they haven't been positively reinforcing it," he said.

"When they're passing a piece of legislation, our constant catchcry to anyone in government is, 'Please think of the start-up industry and make sure there aren't significant side effects' … this is just a classic case of that."

Shadow Attorney-General Mark Dreyfus told Parliament this week he wanted the laws referred to committee to assess their economic effect.

In response to a question regarding Mr Dreyfus's proposal, the office of Home Affairs Minister Peter Dutton said it had nothing to add while amendments to the act were being reviewed.

A fight over research funding

The technology sector is also facing a showdown over research funding.

The research and development tax incentive is aimed at encouraging more companies to come up with new ideas.

The last federal budget proposed tweaking the scheme and capping the amounts that could be claimed — a move "saving taxpayers $2 billion over the next four years", then-treasurer Scott Morrison said on budget night.

The potential legislative changes prompted some players, including the business software company MYOB, to warn they would consider moving research work overseas.

Yet the brakes are on, for now — a senate committee charged with reviewing legislative changes to the scheme recommended this week they be paused for further analysis.

Treasurer Josh Frydenberg has agreed with the committee's position.

Mr Turnbull was a strong supporter of the technology industry. ( ABC News: Marco Catalano )

Beth Webster, director of Swinburne University's Centre for Transformative Innovation, said stability around programs such as the R&D incentive was critical.

Constant change made it impossible for businesses to plan. "It just introduces an extra layer of uncertainty into their environment," Dr Webster said.

The committee report comes in the wake of concerns raised last year by some start-up founders that there had been a crackdown on what qualified for the R&D incentive scheme, especially for software development.

Minister for Industry Karen Andrews said AusIndustry's treatment of software development was consistent with other countries with similar R&D tax incentives.

A tax office spokesperson said that while it supported innovative companies, it was "also mindful that as we pay out approximately $3 billion each year in R&D tax offsets, the community expects us to uphold the integrity of the program".

Looking for a 'chief cheerleader'

Australia's political parties are yet to unveil all their election campaign policies, but Mr Baker said he wanted the Government to be "chief cheerleader and promoter of Australia as a place where innovation is happening".

"I'm not one of the people that think government should be pouring money into start-ups," he said.

"I worry that both parties are a little scarred by the fact they didn't tell the innovation story well last election."

Mr McCauley agreed it was not all bad news.

Government tweaks to the skilled visa system, helping companies attract overseas talent, have been largely welcomed by start-ups.

And enthusiasm from state and city governments has not waned.

In mid-2018, Victoria announced an $13.45 million investment aimed at establishing a number of accelerator programs. South Australia also kicked off a $28 million assistance program for new businesses this year.

But with a federal election on its way, Mr Ahmed said the industry needed champions on both sides of politics who think "10, 20, 50 years ahead".

"We can't rely on coal and mining to carry us forever into the future," he said.

"It shouldn't be our job to be professional at politics to be heard by politicians," Ms Moran added.