As the launch of the Australian federal government's Entrepreneurs' Infrastructure Program commercialisation grants draws closer, the country's startup sector is calling on the government to boost its proposed funding limit to AU$1 million.
Australian tech startup industry group StartupAUS today published an open letter to the federal government, asking that its incoming EIP commercialisation grants be made available to all sectors, that grants are awarded on merit, and that the upper limit of funding be boosted from its current amount of AU$250,000 to a minimum of AU$1 million.
The government announced the introduction of its EIP in its 2014-15 federal budget earlier this year, in a bid to replace some of the startup sector support provided by eight programs, including Commercialisation Australia and the Innovation Investment Fund.
The government estimated that it would save AU$845.6 million over five years by scrapping the programs. Meanwhile, the EIP is expected to cost AU$484.2 million over the same period.
However, there has been some concern among the startup industry about how the government intends to spend the funding, with fears that the country's resources sector could be overly-favoured by the program.
StartupAUS, which counts representatives from Google Australia, Southern Cross Ventures, and Freelancer.com among its sponsor organisations, said in its open letter that grants should be open to all sectors, and recipients should be awarded on merit.
"We believe it is critical that grants are allocated on merit, based on the quality of the IP and support from the private sector," said StartupAUS in the letter. "In particular, letters of support from reputable advisers and investors should be an essential requirement.
"The EIP should fund the most promising companies without any bias for particular sectors. Startups invent new sectors that didn’t exist ten years ago, from social media to the internet of things. If we are going to see more successes such as Atlassian, Seek and Ozforex, we should not confine support for innovation to specific industries," it said.
Additionally, the industry group said that if the government did not move to raise the upper limit of grant funding, Australian tech innovation could be stifled.
"The reduction in grant funding available through the commercialisation grants is a backward step that could lead to the further reduction in the availability of capital in Australia," it said. "Young businesses need capital to provide the appropriate runway, and give them time to deliver success.
"Capital needs to support the best ideas — and sometimes the best innovation needs significant level of backing. In fact, capital heavy industries can result in the strongest return on investment," it said.