Startups are Facing Difficulty Due to Recent Budget Cuts.


Startups are Facing Difficulty Due to Recent Budget Cuts.

Budget 2014 has recently show the Government with the capability to demonstrate its commitment on supporting Australian tech entrepreneurs, and correcting any marketing failures that have been holding the development back of their startup ecosystem.

The recently published Crossroads report have show a set of numbers for key issues currently faced by Australia, and outlined the opportunity for Australia to diversify its economy from one based on resources, mainly industries and domestic focused business to one based on extreme growth knowledge-intensive business.


The abolition of Commercialisation Australia will remove a highly important source  for Australian startups and much needed support for angel investment.

Commercialiation Australia has been a important source for Australian startups. Having successfully supported over 500 companies with grants that total up to $200 million. Much of this funding has gone to companies such as ingogo, Liquid State and 121cast who take this initial funding, build a feasible business, and go on to raise additional private funds.

StartupAUS hopes that closure of the Innovation Investment Funds, which has involved itself with investments that have reached more than $300 million in Australian venture capital (VC) funds, does not signal the end of government support for Australia’s VC industry. StartupAUS would like to see future funding that develops and supports a world-class cohort of VC fund managers, allocates capital to the most deserving funds, adopts a transparent decision-making process and effectively deploys funds to stimulate a vibrant VC industry in Australia.


There currently not enough information based on this recent Entrepreneurs Infrastructure Programme to form a view about its usefulness, or relevance to tech startups, during this stage. The initial wordings have suggested some concerns that are focused on SME’s rather than high-growth tech business.

Steven Baxter, board member, StartupAUS managing director River City Labs commented: “The reality is there’s nothing in this budget that indicates the government wants to support tech startups in Australia. The concerning top-level conclusion is that a “saving” of $845.6 million over five years is another way of saying the government will reduce its support for innovation by nearly $170 million a year.

“Whilst we can understand the Government’s rationale in regulating support for corporates, they are in danger of throwing the baby out with the bathwater. Commercialisation Australia and the IIFs were not handouts, they were valuable early stage funding mechanisms that enabled great ideas to be commercialised and startups to get their product to market. Their loss pulls the rug out from under a large number of startups, and will have an immediate impact on our startup ecosystem.

“Australia invests a fraction of what other developed countries do funding tech startups, and the budget has provided no solid proof that the government intends to rectify this. We need tech startups as a major focus of the Entrepreneurs’ Infrastructure Programme as they are an important driver of economic growth and their needs are very different to those of regular small businesses.”

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Kevin is passionate about startups and loves to write about them. Previously Kevin ran a design studio. Now he loves to write about tech and startups.

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