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Is Labor cutting Commercial Ready?

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By all accounts, the Commercial Ready scheme, which provides grants of up to $5 million to help SMEs develop and commercialise innovative technologies, is one of the Federal Government’s most successful business growth initiatives.

So why would Labor want to mess with a scheme that seems to be working so well?

At this week’s campaign launch, Labor leader Kevin Rudd made much of his $740 million plan to help businesses develop and commercialise green technology and reduce their environmental footprint.

What wasn’t highlighted, however, was Labor’s plan to fund a part of that package, the $240 million Clean Business Australia plan, by cutting $160 million over four years from the $800 million budget of the Commercial Ready program.

Clearly, some of the money earmarked for the Clean Business Australia plan – the $75 million Climate Ready fund to help business commercialise green technology – will in effect form part of the Commercial Ready pool.

It is unclear whether another part of the package, a $75 million program to help SME manufacturers re-tool to reduce their environmental impact, will also be administered through Commercial Ready.

Either way, Labor’s decision to reallocate some money from Commercial Ready to fund its green initiatives, rather than finding new money, will be disappointing to many.

According to Katrina Gerhardt, a consultant who helps business apply for the grants, businesses that receive money under the scheme get a big leg up in getting their products to market.

“If there’s a problem, it’s a highly competitive scheme – a lot of people apply for funds and certainly even if you have a fantastic or innovative product that doesn’t mean you will get a grant,” Gerhardt says.

Industry Minister Ian Macfarlane said to SmartCompany: “By reducing Commercial Ready funding and diverting these funds to a renewable energy only program, Labor is turning its back on technologies which have great potential to decrease Australia’s greenhouse gas emissions…the Coalition believes that you should support all technologies which have the potential to lower emissions, not ‘pick winners’ as Labor always wants to do.”

The Commercial Ready program and its small business focused companion program Commercial Ready Plus are good programs, but they need more funding, not de-funding, even partly.

The fact that a possible Labor plan to cut Commercial Ready has barely raised a comment in the wider press further illustrates the disappointing lack of focus given to this crucial policy area.

There is an upside in the Labor proposal, however: they promise to examine ways to streamline the Commercial Ready application process. Given that it reportedly takes three to six months to gather together the reams of technical and financial information that can be required to make a grant application, and attempt to cut the Commercial Ready red-tape would be welcome.

Labor’s media office was approached for comment but did not respond before publication.

There is a general failure in Australia to turn our gaze away from the headline hogging growth of the resources sector and look to what will be central to maintaining long term international competitiveness: a thriving and highly innovative SME sector.

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