For business owner Alex Todd, the abolition of the Commercial Ready business grants program came as a devastating and entirely unexpected blow.
Devastating, because putting together the substantial paperwork needed to apply for a Commercial Ready grant was a big part of Todd’s Adelaide-based business, Commercial Ready Consulting.
And unexpected because just a few weeks ago Todd heard the man responsible for the cut, Innovation Minister Kim Carr, heap praise on the latest round of businesses to receive Commercial Ready grants.
“Three or four weeks ago we attended an Ausindustry function at which Kim Carr was there talking about the importance of innovation and congratulating companies that had successfully applied for grants, and certainly he seemed pretty well pleased with the program and what it was achieving,” Todd says.
The sudden demise of the program has left business applicants for grants in the lurch, with some having invested significant time and resources on draft applications that now have nowhere to go.
“The program was pulled so suddenly, they stopped processing applications from the beginning of May essentially, but there was no indication to companies that were part way through the process or with draft applications with Ausindustry that it was going, so I think that was handled quite poorly,” Todd says.
But the bigger problem for many of those businesses is that they will now be forced to abandon projects because of a lack of funding to get them to market.
“The Government has been referring to a Productivity Commission report that many projects would go ahead with that support, but especially for smaller business I think that’s not the case and I know of several projects that now won’t go ahead because the program has been pulled,” he says.
One business counting its lucky stars that it was able to take advantage of Commercial Ready before the axe fell is Melbourne-based transport and logistics technology company SmartTrans.
Prime Minster Kevin Rudd launched SmartTrans key technology, EvenTrack – a mobile device that will be used to help non-Chinese speakers get around Beijing during this year’s Olympics – in the Chinese capital in April this year.
Rudd described EventTrack as a “very, very innovative” product that showcases Australians’ ability to produce “practical solutions to unique problems in unique environments”.
But according to SmartTrans chief executive Bryan Carr, the technology would never have got off the ground without a recent $700,000 grant from Commercial Ready.
“Without that funding we would not be here,” Carr says. “We’re very small and obviously without that assistance we would have struggled to find the funding or get backing for the risk of going into another country and get the product up and running,” Carr says.
The abolition of Commercial Ready could also make it more difficult for smaller businesses to attract venture capital funding. Prescient Venture Capital chief executive Doron Ben-Meir says the program often helped business top up early stage funding they got from other sources.
“It’s certainly something the venture capital sector looks to as well. We’ll invest several million in a business where there could be some matching Commercial Ready funding to help get the project over the line, so it is a strange decision they have made,” Ben-Meir says.