The Entrepreneurs Infrastructure Program, implemented in last year’s budget as a replacement for Innovation Investment Fund and Commercialisation Australia, was a target for savings in the latest federal budget.
Budget papers show the government will cut funding for the program by $27.3 million over five years. The savings will be achieved in part by changing the implementation of elements of the Single Business Service and Business Management initiatives.
Funding of $526.4 million over four years from 2015-16 will remain available to support the program’s objectives. The program’s goal is to support the commercialisation good ideas, job creation and lifting the capabilities of small businesses, the provision of market and industry information, and the facilitation of access to business management advice and skills from experienced private sector providers and researchers.
It’s been a disappointing replacement for a Commercialisation Australia, a body that had invested over $200 million in more than 500 companies when last year’s cuts were announced. The 2015 Crossroads Report, commissioned by StartupAUS and released last month, criticised the government for replacing Commercialisation Australia with the Entrepreneurs Infrastructure Fund’s Commercialising Ideas stream. A move that reduced the amount of grant funding available to startups by approximately half.
“StartupAUS made a submission on the EIP, noting that the government’s decision to reduce grant funding to startups would lead to a further reduction in the availability of early stage capital, and that this would accelerate the existing trend towards startups leaving Australia in search of more favourable funding environments,” the report says.
The report called for the government to expand funding to the program in order to allow it more effectively accelerate the growth of Australian startups.
The government achieved savings of $31.7 million over three years from 2014-15 closing the Commercialisation Australia, Enterprise Connect and Industry Innovation Precinct programs, that were all closed to new applications on January 1 2015.
The Minister for Industry and Science Ian Macfarlane says the budget reaffirms the Government’s commitment to creating stronger connections between industry and science, in order to capitalise on new opportunities for economic growth and new jobs.