Government secretly freezes funding for start-up services

The Federal Government has frozen funding for small business support services while telling people the process was ongoing.

Officials from the Department of Innovation, Industry, Science and Innovation told a Senate Estimates hearing in Canberra yesterday that “the advice that we would have provided to the applicants is that the assessment process is progressing”.

However, further questioning by the shadow parliamentary secretary for small business, Senator Scott Ryan, revealed program funding had been frozen under a Finance Department directive while applicants were kept in the dark.

The funding freeze follows the head of Commercialisation Australia confirming government grants are on hold following an “unheard of” government review.

Shadow small business minister Bruce Billson said the government had promised money to Business Enterprise Centres but instead put a freeze on the funding without letting those organisations know.

“Thanks to the government’s economic mismanagement it is putting a freeze on much-needed funding intended to support small business advisory services,” Billson said.

“Respected service providers are being left in limbo and forced to wind-back support to small businesses trying to cope with the challenges of a difficult economy made worse by the carbon tax and a growing red tape burden.”

Billson said the government had misled service providers into believing that tenders are still being evaluated when the funding has been frozen.

“While the government fudges its finances to create the illusion of a surplus, it has left small business advisory service providers ‘on hold’ waiting to learn of their funding fate,” Billson said.

“The responsible thing to do would be to advise applicants of the true state of the tender process and their likely fate.”

Jackie Zelinsky, chief executive of Business Enterprise Centre (BEC) Australia, told SmartCompany funding had been put on hold but she says rather than a freeze on funding what has happened is a “pause”.

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