Last week there was the federal budget on Tuesday, and then WA state budget on Thursday. Both provided surpluses – in WA, for the 6th year in a row.
Now the dust has settled, what startup news was tucked within?
Federal Budget: goodbye AC grants, hello… IGP?
Last year, the only time ‘startups’ were mentioned in the federal budget was in relation to Labor’s ‘Startup Year program‘. Rather than a grant program, this was a HELP-style loan for university students that they’ll have to pay back.
Compared to previous budgets, there were only a few beneficial incentives for startups, such as mental health and debt counselling support and a fund to encourage clean energy equipment upgrades.
What was mentioned, was a $197.7 million cut to the Entrepreneurs’ Program, which includes the Accelerating Commercialisation (AC) grant. Last year, this program had come under review by the Australian National Audit Office, which called the program’s management and procurement into question.
Well, the news this year is the entire Entrepreneurs’ Program has been shut down (as of 9th May 2023). So, no more Accelerating Commercialisation grants. Considering these had provided about $16M in grant and matched funding to WA startups over the past six years, this has come as quite a blow.
However, the federal budget did suggest a replacement: a $392M ‘Industry Growth Program‘ which would be some kind of ‘mentoring and grant’ program, perhaps an early-stage grants program to support companies for later investment from the $15 billion National Reconstruction Fund. So, although there were no details, an AC-type grant program may come out of this in the next few months.
Other news that could be relevant to startups was:
- an instant asset write-off threshold of $20,000 (cut from the pandemic levels of $150k) for 12 months from July 1;
- $325 off the power bills for one million eligible small businesses;
- tax incentive worth up to $20,000 to provide an additional 20% depreciation for assets that improve energy efficiency;
- $23.4M for a ‘cyber wardens program’ for small businesses to build in-house capability to protect against cyber threats;
- reducing the PAYG and GST uplift from 12% to 6% for 2023-24 income year, to assist cash flow.
- extra funding for the ATO for improved admin to assist small business, plus extending the period to amend income tax returns from 2 to 4 years.
- $18.1 million improve the ability for SMEs to compete for government procurement
- $101 million for companies to integrate quantum and AI technologies into their operations
State Budget: additional $9.1M for the New Industries Fund
Over in WA, our Premier and Treasury Mark McGowan brought down his sixth budget, and his sixth successive surplus.
For startups, the main news was in relation to the New Industries Fund (NIF), which supports the main innovation, startup and early-stage ecosystem sectors through its various programs such as WA Innovator of the Year, the Innovation Hubs, Innovation Booster Grants, X-TEND WA program, WAVES, support for West Tech Fest, …
The NIF is funded with $16.7M over 4 years. Since 2017, the year the McGowan government was elected, this fund has had $4.175M a year (over 6 years).
The good news for WA startups was an additional $9.1M in funds for the NIF to be provided over the next two financial years. This more than doubles the NIF, so expect more announcements as to what that will entail, in detail, in the next few months.
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