Innovation in jeopardy if cuts go ahead

Budget cuts to long-term innovation and industry assistance programs will come at a cost to the nation’s economy, Shadow Research, Innovation and Industry Minister Senator Kim Carr warned today.

“There is widespread anxiety in the business community and start-up sector that the Abbott Government will slash programs which support innovation and business growth in the Australian economy,” Senator Carr said. 

“Innovation can’t simply be left to the market as the Treasurer seems to think – there’s an urgent need for a clear strategy from Government and ongoing programs that promote innovation.

“As former Microsoft executive Daniel Petre said today about Australia’s performance in innovation:

Australia is falling off a cliff.”  [AUSTRALIAN FINANCIAL REVIEW – 7 MAY 2014]

“Australia will continue to fall behind the rest of the world unless we fight to retain those with talent who are prepared to takes risks – otherwise we will lose them to the US, Europe and other countries where there are more opportunities.

“Recent reports suggest new firms add three million new jobs to the US economy each year.

“Cutting programs that seek to grow new Australian businesses and encourage investment – such as the Innovation Investment Fund, Commercialisation Australia, Enterprise Connect and the Export Finance Insurance Corporation – would be short-sighted in the extreme.”

Already, the Abbott Government has frozen grants to:

  • Commercialisation Australia, which has provided more than 500 firms in excess of $200 million in grant funding. On average, for every dollar of grant funds invested, this program raises two dollars of private capital investment.
  • Enterprise Connect, which has helped over 21,000 businesses increase their competitiveness. More than eight in 10 firms using this service report that their productivity has improved.

“Despite having been in office for eight months, Mr Abbott has no industry plan, no innovation policy, no science policy, and no plan to deal with job losses or transition Australia to the high-skill, high-tech jobs and industries of the future,” Senator Carr said.

“Instead, he has put critical industry programs on ice, and his government goaded our automotive manufacturing industry out of the country – with 50,000 direct jobs poised to go and 200,000 more at risk.

“Now Mr Abbott expects Victoria and South Australia to squabble over $100 million in Commonwealth funds in response to automotive closures. This is a paltry amount given the economic and social costs of the closure of automotive manufacturing – university modelling suggests there could be a $20 billion hit to the Budget bottom line in increased welfare payments and lost tax revenue.

“Clearly, it has been left to Labor to seek to fill the Abbott Government’s policy black hole when it comes to innovation, science and research policy in Australia.

“As a consequence, Labor has set up a wide-ranging Senate inquiry into Australia’s Innovation System to ensure we retain a focus on science and research and that the country is on the path to creating the jobs and industries of the future.

“In government, Labor put in place the framework for a world’s best science and research sector, a 10-year innovation agenda. That work and that investment must not be squandered.”


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