Sudden Commercial Ready cut leaves businesses in the lurch
Monday, May 19, 2008/
A business that has been left in the lurch by the Rudd Government’s abrupt decision to axe the Commercial Ready grant program has slammed the handling of the decision as “unprofessional”.
Brisbane-based driver training simulator business Vigil Systems is typical of the businesses that have participated in the program; only a few years old, technology driven and succeeding in an intensely competitive international market.
On Monday last week, Ausindustry informed Vigil Systems that its application for a Commercial Ready grant to fund the commercialisation of a new driving simulation product was complete and ready to be put forward for a final decision.
Just 24 hours later, Treasurer Wayne Swan delivered his first budget, and Vigil Systems’s chief executive Ian Haynes got the news that Commercial Ready had been axed – and his businesses application along with it.
“It came totally out of the blue, no one expected it. We got the go ahead one day, and for the program to be gone the next is just farcical,” Haynes says.
Haynes believes it is a mistake to cut a program that has helped his business and many others like it bring innovative products to market, but he is just as angry with the abrupt way in which the program was cancelled.
The Commercial Ready grant process is quite work intensive for applications, with several steps including the preparation and lodgement of a comprehensive business plan detailing how the money will be used required just to be considered.
For Vigil Systems that has meant several hundred hours of work by staff, including almost full-time attention by Haynes himself over the past few weeks, not to mention many thousands of dollars spent on consultants with expertise in preparing applications.
“It is a double kick in the guts, because we’ve only been profitable for two years,” Haynes says. “We’re trying to plan, and to let us go to all that effort and then tell us the day after our application has been accepted that the program is gone is a real kick in the teeth – you can only describe it as unprofessional really.”
And, Haynes says, he wasn’t the only one surprised by the news – the Government officials his business was working with to put together the application were also caught on the hop.
“The Ausindustry people have been more than helpful; they were as shocked as we were and the fact they sent us that letter the day before suggests a complete breakdown in communication between the Government and one of their departments,” Haynes says.
Peter Allen runs a consulting firm that helps companies put Commercial Ready grants together, and says the time and resources put into their application by Vigil Systems is typical of businesses seeking to use the program.
He says the axing of the program could mean that the next Australian international business successes will now struggle to get out of the garage.
“Business like Cochlear and Wotif have used these grants to grow,” Allen says. “It helps to fund start up companies that are in their garage or starting in a very small way to take that first big step. World icons like Microsoft started up in that way and we just don’t have the venture capital networks to fund those things now.”