In a Federal Budget with few surprises and challenging news for the general innovation sector, this week the Australian Government dramatically cut funding to a number of  federally funded programmes designed to aid Australian innovators to get their products to market, cut funding to Australia’s national research organisations, but on the plus side, introduced a new medical research future fund.

Savings of $845.6 million over five years are predicted by the cessation of the following programmes from 1 January 2015:

  • Australian Industry Participation;
  • Commercialisation Australia;
  • Enterprise Solutions;
  • Innovation Investment Fund;
  • Industry Innovation Councils;
  • Enterprise Connect;
  • Industry Innovation Precincts; and
  • Textile, Clothing and Footwear Small Business and Building Innovative Capability.

Commercialisation Australia was the programme established in 2010 to take the place of the popular COMET (Commercialising Emerging Technology), the demise of which, at the time, caused great distress in the Australian technology sector.  Enterprise Connect has also had considerable success in some regions.

As expected the Clean Technology (Investment and Innovation) programme has taken a hit as has the programme of Cooperative Research Centres which will collectively lose funding to the tune of $124.7 million over five years. The Australian Renewable Energy Agency has been axed, and the Carbon Capture and Storage Flagships programme will have reduced funding.

A new programme: the Entrepreneurs' Infrastructure Programme will be provided with $484.2 million over five years from 201314 as part of the Government’s implemention of its industry policy. The programme will reportedly focus on supporting the ‘commercialisation of good ideas, job creation and lifting the capability of small business, the provision of market and industry information, and the facilitation of access to business management advice and skills from experienced private sector providers and researchers’. Twinning this programme, and in a nod possibly to the large number of job losses associated with the announced closure of several major employers, the Government will provide $476.0 million over four years to establish the Industry Skills Fund (ISF) from 1 January 2015 to support the training needs of small to medium enterprises. Industries targeted will include: health and biomedical products; mining, oil and gas equipment technology and services; and advanced manufacturing, including defence and aerospace. The ISF is expected to deliver 121,500 training places and 74,300 support services (including mentoring and foundation skills) over four years. Businesses will be required to make cocontributions towards the cost of training on a sliding scale depending on the size of the enterprise. Both programmes will be the responsibility of the Department of Industry.

Australia’s major Publicly Funded Research Organisations will be the subject of funding restriction. Savings of $146.8 million over four years are to come from reduced research funding for the Commonwealth Scientific and Industrial Research Organisation, the Australian Nuclear Science and Technology Organisation and the Australian Institute of Marine. CSIRO has already undertaken a broad programme of staff redundancies, and presumably, more can be expected.

Medical researchers may end up being the only winners in the innovation space. The Government announced that $5 of the new $7 co payment for all visits to general practitioners, and for outofhospital pathology and diagnostic imaging services, will be squirreled away to provide $276.2 million over three years from 1 July 2015 in net earnings from the Medical Research Future Fund (MRFF) which will fund critical medical research in the medium to long term. The MRFF aims to establish a sustained funding stream for medical research, with the total fund expected to reach around $1.0 billion per year from 2022-23.