Discretionary grant programs on hold, concern about startup components

The federal government is understood to have placed all federal discretionary grant programs on hold, impacting approximately 100 business grants.

StartupSmart understands the decision has been made in the lead up to the May budget as the Coalition considers which programs to continue with.

One startup founder, who asked not be identified, was waiting to hear about their Commercialisation Australia grant. He contacted StartupSmart to say that they had only been told a week ago that a decision would be made on their application at the May board meeting of Commercialisation Australia. They were obviously then surprised to be told today that would not be the case.

Commercialisation Australia is regarded as the best initiative the government has to support startups, offering funds for a range of startups from early stage to growth, which has allowed a large number of companies to commercialise their products.

It’s understood from several sources that there is concern within the department that a component for startups may be abolished post-May. StartupSmart has requested a comment from Commercialisation Australia, but had not heard back at the time of publication.

The startup founder estimated they had spent about $20,000 in time and money in preparing the Commercialisation Australia application.

“If this is how the government treats startups, we’ll just move to the US,” he says. “You don’t really have a choice at the end of the day.”

GrantReady chief executive Adrian Spencer says the move to place the grants on hold is the “usual approach” of a new government in the lead up to its first budget.

“It is important to remember that grant programs are a barometer of public policy and as such, the new government always sets fresh vision, and grants change to reflect these new priorities,” he says.

“We expect detailed information regarding the status of these programs to be available when the 2014-15 budget is released in May. In the meantime, business should not be concerned. These changes always bring the announcement of new programs and the refreshing of existing programs.”

Spencer says programs which will be impacted include Commercialisation Australia, Enterprise Connect and the Clean Technology Innovation Program.

However, he says other important legislated programs will not be impacted.

Continuing programs include the R&D tax incentives, Tradex and the Export Market Development Grants.