Federal Budget ’08 - The good, the bad, and the environmental
Overview
The Federal government handed down its budget on Tuesday 13 May – with a major impact on Government Grants.
A whopping $2.5 billion has been slashed from current government grant programs. In a surprise move, Commercial Ready has been axed, along with the politically troubled Regional Partnerships Program. Many other grant programs have been closed or cut back. In their place, a raft of new grant programs has been announced, worth $2.35 billion. Further funding has also been committed to supporting these new areas, but not in the form of government grants.
As part of the changes, there will be a greater focus on centralised responsibilities for innovation, industry, science and research within a single department. Significant savings will be made from this efficiency.
We have attempted to provide a concise summary of all changes to Government Grants that affect business. Please contact us to discuss specific programs, particularly how this may affect your current grant or future applications.
The Good
The government has stuck to its election promises and provided strong funding for environment, business support, export, manufacturing and skills training.
Business Enterprise Centres (BEC) – $42 million over four years
To fund the delivery of low cost small business advisory services through nominated BECs throughout Australia. Thirty six BECs will be supported through this measure.
Enterprise Connect Innovation Centres – $250.7 million over five years
To establish ten Enterprise Connect Innovation Centres around Australia. The centres will provide business and advisory and diagnostic services targeted at assisting SMEs improve productivity and capacity for innovation.
Export Market Development Grants Scheme — additional $50 million
Regional Food Producers’ Innovation and Productivity Program – $35 million over four years
Matching grants to Australia’s regional food producers to assist them in becoming more competitive through productivity and innovation improvements. Includes $10 million for seafood industry projects.
SA Innovation and Investment Fund and Labour Assistance Package to Mitsubishi Employees – $35 million over four years
Assistance to employees directly affected by the closure of Mitsubishi’s Tonsley Park plant.
Education Revolution
Skilling Australia for the Future – $1.9 billion over five years to address skills and labour shortages:
- $884.6 million for 238,000 additional vocational education and training places to individuals outside the workforce.
- $704.6 million for 392,000 new training places for those in the workforce to train/upgrade skills.
- $242.2 million to support 85,000 new apprenticeship places.
- $83.2 million for strengthened industry skills councils.
- $4.1 million for Skills and Training Information Centres to provide a one-stop advisory service.
Additionally, its enterprise and career education program is:
- Committing $6.4 million over four years for partnership between schools and businesses.
- Creating Trade Training Centres to complement minerals industry skills centres in mining regions.
- Reducing HECS by 50% for science graduates, benefiting geology and geosciences.
- The government will invest $1.386 million over four years to increase skilled migration program by 31,000.
- $19.6 million will be allocated over five years to create and support Skills Australia, a statutory body to advise the Government on current and future demand for skills and training in the Australian economy.
The Bad
The following programs have been discontinued, cutting available grant funds by a total of $2.2 billion:
- The Commercial Ready program, cut $707 million over four years. No further grants will be approved, all existing grant contracts will be honoured.
- Work Skills Vouchers – cut $778.3 million over five years.
- Regional Partnership, cut $236.2 million over five years.
- Australian Industry Productivity Centres, cut $157 million over five years and to be replaced with the Enterprise Connect Innovation Centres, costing $42 million over four years.
- FarmHelp, cut $97.4 million over five years.
- Community water Grants, cut $73.6 million over four years.
- Food Innovation Grants, cut $62.7 million over 5 years.
- FarmBis, cut $37.1 million over five years.
- Advancing Agricultural Industries, cut $33 million over 5 years.
- Business Skills Vouchers for Apprentices – cut $13.9 million over four years.
- Building Entrepreneurship in Small Business Program, cut $10.5 million over two years.
- New Industries Development Program, cut $6.6 million over four years.
- Pharmaceuticals Partnerships Program, cut $3.2 million over two years (unallocated funds).
Cutbacks have been applied to the following programs, reducing grant funds by a total of $242 million:
- Global Opportunities Program, worth $62.6 million over four years (transferred into Austrade).
- Low Emissions Technology Demonstration Fund, cut $90 million and transferred to the new National Clean Coal Fund and the Renewable Energy Fund.
- Renewable Remote Power Generation Program, cut $42 million over two years.
- Capability Technology Demonstrator Program, cut $30.3 million over four years.
- Australian Tourism Development Fund, cut by $15.5 million over three years.
- Low Emissions Technology and Abatement program, cut by $2.2 million.
The Environmental
The Government has delivered an unprecedented $1.9 billion in funding to support the environment and to tackle climate change through a range of initiatives spread over four years. In addition, the Government has allocated funding to work on the development on the emissions trading scheme, however the tax implications of the scheme are still to be determined.
Clean Business Australia – $240 million through the following programs:
- Climate Ready: $75 million over four years. Competitive grants program will assist small and medium enterprises to develop and bring to the market new products that save energy and water and reduce pollution.
- Retooling for Climate Change: $75 million over four years to assist Australian manufacturers to improve their production processes, energy and water efficiency and to reduce their carbon emissions. Grants of between $10,000 and $500,000, up to a third of the cost of each project, will be provided to small and medium sized companies for initiatives such as investing in energy efficient manufacturing tools, small scale cogeneration plants and water recycling. Advice will also be provided to small and medium enterprises on how to improve water efficiency through the National Manufacturing Network.
- Green Building Fund: $90 million over four years to assist business to implement energy efficient measures. The Fund will subsidise 50 percent of the cost of retro-fitting and retro-commissioning existing commercial office buildings, up to a maximum of $200,000 per building. Funds will be awarded to organisations on a competitive basis, with priority given to large buildings (over 5,000m2).
Energy Innovation Fund – $150 million over four years
To support the development of clean energy technologies. Includes: $50 million for the Australian Solar Institute; $50 million for photovoltaic R&D; and $50 million for general clean energy R&D
Green Car Innovation Fund – $500 million over five years
To assist the Australian automotive industry to develop and manufacture low emission vehicles. Industry will be expected to match the Government’s contribution on a one to three dollar basis, generating a total of $2 billion in investment.
National Clean Coal Fund – $500 million over eight years
To support clean coal and advanced fossil fuel technology. Initiatives to be supported include:
- $50 million for a national carbon mapping and infrastructure plan.
- $75 million for a National Clean Coal Research Program.
- $50 million for a pilot coal gasification plant in Queensland.
- $50 million to demonstrate carbon capture and storage.
- $50 million for a large scale post combustion capture plant in the Latrobe Valley in Victoria.
- $15 million to fund Australia’s involvement in the FutureGen Alliance.
- $20 million for the Australia-China Clean Coal Co-ordination Group.
Renewable Energy Fund – $499.7 million over seven years
Competitive grants between $10 million and $75 million to develop, commercialise and deploy renewable energy in Australia. Will assist in developing next generation ethanol technology by providing grants to Australian companies to commercialise new technology using alternative fuel sources.
Australia’s Farming Future: Climate Change Adjustment Program – $55 million over four years
Assist farmers in responding to climate change through the provision of professional advice and training grants. Re-establishment grants will also be available to eligible farmers who choose to leave their farm.
Adrian Spencer is a dedicated grants specialist. He has accessed over $40 Million for organisations through State and Federal Government grants, rebates and concessions. Adrian is the Founder and CEO of GrantReady.
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