The group representing Australia’s private equity and venture capital sector has urged the federal government’s National Commission of Audit to maintain support for the Innovation Investment Fund and establish a fund to support the biotech industry.
The Australian Private Equity & Venture Capital Association says in a submission the IIF is a vital source of funding for many Australian start-ups while a Translational Biotech Fund would help early-stage biotech companies to commercialise their discoveries.
“There is an irrefutable flaw in our current policy prioritisation,” AVCAL chief executive Yasser El-Ansary says in a statement.
“We don’t invest enough in innovation, and we have to start taking steps to arrest the slide. Our chronic under-investment goes some way to explaining why Australia currently lags behind our global counterparts in collaborative innovation.”
The Abbott government established the National Commission of Audit as an independent body to review and report on the performance, functions and roles of the Commonwealth government and it due to report the first phase of its review by the end of January 2014.
The IIF co-invests with private sector investors in venture capital funds to grow early-stage companies.
“By bridging the funding gap for companies looking to commercialise their concepts, we can ensure that Australian innovation remains a key ingredient for future economic growth while at the same time having very little impact on the government’s fiscal balance.” El-Ansary says.
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He says a biotech fund would support research commercialisation by bridging the “valley of death” at the early clinical stage and testing of medical devices.
El-Ansary adds that both programs involve the acquisition of financial assets through administered capital, which meant they do not impact the government’s fiscal balance.
“There aren’t many areas of public policy where the government can actually make money by spending money.”
He says that from an overall annual funding base of around $400 billion, the government currently spends around $9 billion on science, research and innovation, with less than an estimated 1.5% of that going towards commercialisation of research.