Business assistance – Almost $1 billion of business programs slashed
Tuesday, May 13, 2008/
The Rudd Government has axed the Commercial Ready program as part of a wide range of cuts to business assistance. Some of the programs cut include:
The building entrepreneurship in small business program, at a saving of $10.5 million over four years.
The national nanotechnology strategy, saving $11.7 million over the next four years. The Government will examine the needs of the nanotechnology sector in its innovation review.
The new industries development program, announced in the 2004-05 budget, which was aimed at regional food producers and processors. This measure will save $6.6 million.
The food innovation grants for regional food producers, which was part of the national food industry strategy.
The global opportunities program, at a saving of $62.6 million over four years, although some funds will be allocated to Austrade for overseas investment promotion.
The innovation ambassador program, at a cost of $5 million.
The cessation of the small business field officers program, saving around $7.5 million a year.
In addition to this, the access to the entrepreneurs’ tax offset will be slashed from July 1. The program, which provides a 25% tax offset for small businesses with annual turnover of less than $75,000, will be changed to “focus the benefit towards genuine small businesses”. Singles with over $75,000 and families with over $120,000 of adjustable taxable income will no longer be eligible. The change will save $90 million over four years, and it may be means tested.
The cancellation of the Commercial Ready program is clearly the biggest surprise for small business. The Government, which forecasts the cut will save $707.2 million over four years, quotes a 2007 Productivity Commission report which it says “found that there is robust evidence that the Commercial Ready program supports too many projects that would have proceeded without public support, and that the national benefits from the program are, at best, uncertain”.
The Government says it will consider other commercialisation options pending the completion of its innovation review, currently being chaired by Terry Cutler.
The biggest business assistance initiative announced by the Government is the establishment of the Enterprise Connect Innovation Centres, which will receive funding of $250.7 million over five years. There will be 10 centres around Australia, aimed at assisting small and medium businesses improve their productivity and capacity for innovation.
But don’t get too excited by the new centres – the Government is closing the Australian Industry Productivity Centres at the same time, which means its big new business initiative is essentially a repackaging of an old concept.
As announced during the election campaign, the government will provide an extra $50 million in 2009-10 to the Export Market Development Grants Scheme. That will increase the total amount available to exporters under the scheme to $190 million in the 2009-10 year.