Budget 2023: $392.4 million for startups and SMEs from new Industry Growth Program

One of the biggest things startup founders were calling for in the lead-up to the budget was more funding. And it looks like they got their wish. The Labor government has pledged $393.4 million to establish a new Industry Growth Program.

According to the budget papers, the program will support Australian startups and SMEs to “commercialise their ideas and grow their operations.”

The $392.4 million will be distributed over four years, and followed by $79.2 million for each subsequent year. 

“This will enable emerging businesses to become the big employers of the future – backing our innovators with investment and advice so they can make the jump from brilliant idea to business plan to a growing enterprise,” Minister for Industry and Science Ed Husic said in a statement.

Husic confirmed that the Industry Growth Program would include grants and mentorship.

The support is said to be targeted at businesses that operate within the priority areas of the $15 billion National Reconstruction Fund.

“This end-to-end approach will maximise the return on taxpayers’ investments and provide a clear pathway for our entrepreneurs to turn their ideas into thriving businesses in Australia instead of overseas,” Husic said.

According to Husic, this funding will work “in tandem” with the National Quantum Strategy that was announced last week. The budget papers expanded upon this, announcing a $101 million investment into the “responsible development” of AI and quantum industries within Australia.

A further $39.6 million over four years will go towards the continuation of the Single Business Service which supports SME engagement with the government.

This particular measure is a repurpose and expansion of the funding previously offered to SMEs through the Entrepreneurs’ Programme. It is further offset by funding that has been redirected from the Industry, Science and Resources portfolio.

A significant improvement on the October 2022 budget

$392.4 million is about 392 million times better than the treatment of startups in the October 2022 budget. Founders certainly weren’t happy at the time.

As we reported last year, ‘startups’ were only mentioned in relation to Labor’s Startup Year program. Rather than a grant program, it is 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 $197.7 million in uncommitted funding from the Entrepreneurs’ Program. Last year it came under review by the Australian National Audit Office, which called the management of the program into question.

Between the new Industry Growth Program and the continuation of the Single Business Service, it seems we are now seeing where some of the previously uncommitted funding has gone.

This certainly isn’t the only budget win for startups — you can read our roundup here.

To see SmartCompany‘s full budget coverage, click here.