Canberra’s hollow subsidies

“Get free money from the government”, spruiks a website offering to help businesses get subsidies. Unfortunately, that ‘free’ government money isn’t as certain as the spruikers make out, as many entrepreneurs have found in recent years.

The Federal Government’s unannounced freeze on grants that SmartCompany revealed a few days ago repeats the disgraceful axing without notice of the Commercial Ready program in 2007 which wasted the time of dozens of technology companies.

Having done it again, the lesson from Canberra is clear for businesses – don’t spend too much time or money applying for government grants, particularly from federal agencies.

Government grants aren’t a complete waste of time; Austrade’s Export Market Development Grants (EMDG) program and the state-based Australian Technology Showcase are two examples of well-planned initiatives that have helped businesses grow.

Those businesses that successfully used those grants have taken a strategic approach in the programs they’ve applied for rather than just fall for the ‘free money’ line used by spivs. Instead of wasting their own, and everybody else’s, time applying for the wrong thing, they’ve gone for what fits with their objectives.

Most businesses didn’t take that attitude during the period I was with the NSW Government. I didn’t win many friends by pointing out to businesses looking for some funds that the hassle and time spent in applying for a $10k grant would be better spent driving a cab for six months to raise the money.

To be fair to the public servants, making sure grant money goes to the right people and is used for the intended purposes is fair enough. All of us in the business community would whinge long and hard about governments wasting money, so some bureaucracy and accountability shouldn’t be criticised.

While bureaucracy is understandable, uncertainty is not, and the current federal Labor government has shown its fine words about supporting innovation to be hollow by unilaterally axing programs a second time in five years.

One would hope that an Abbott government wouldn’t show the same contempt to the business and research communities. But as we’ve seen with Liberal state governments axing programs and making unexpected announcements such as abolishing the NSW Small Business September initiative, this ‘axe without consultation’ mentality is entrenched on both sides of politics.

The moral of the story is not to rely on ‘easy money’ from the government and treat any support as being a handy bonus.

Paul Wallbank is one of Australia’s leading experts on how industries and societies are changing in this connected, globalised era. When he isn’t explaining technology issues, he helps businesses and community organisations find opportunities in the new economy.