In short, the 2014 Budget means there will be fewer grants but more money is available.
The grant experts at Grant Ready have created this handy cheat sheet of what the 2014 Budget means for government grants. Check out what grants now apply to your startup and industry.
Less grants but more money
Funding programs have grown to 723 grant programs with over $50 billion awarded annually. This budget has sought to remove some of the duplication by combining programs to achieve greater efficiency and reduced administrative cost. As a result the number of grant programs will now drop to about 700 programs. However, the overall funding has not been reduced, in fact, it will increase.
Two of these new consolidated programs will be the Entrepreneurs’ Infrastructure Programme and the Industry Skills Fund.
Entrepreneurs’ Infrastructure Program
From January 2015, the Federal Government will replace a number of programs, including Commercialisation Australia, Enterprise Connect and the Textile, Clothing and Footwear programs.
(Editor’s note: Find out what the Budget means for the Australian startup ecosystem.)
This will provide an investment of $484.2 million over five years; the cessation of eight programs will save $845.6 million. The new program will provide services previously provided by the programs to be ceased, such as commercialisation of good ideas (currently the purview of Commercialisation Australia) and the facilitation of access to business management advice (an aspect of Enterprise Connect).
Industry Skills Fund
The establishment of the Industry Skills Fund will be delivered at a cost of $476M to deliver 121,500 training places and 74,300 support services. This program will replace ten different programs including the National Workplace Development Fund and Australian Apprenticeships Access Programme which will save the budget $1.0B. The new Industry Skills Fund will require business to make a co-contribution towards the cost of the training based on the business size.
The Medical Research Future Fund
The surprise of the budget, this endowment will be worth $20 billion, paid for by savings in the health portfolio. From 2015-16, the net earnings from the Fund will serve as a permanent revenue stream, primarily to the National Health and Medical Research Council (NHMRC). The Fund will distribute around $1.0 billion a year into medical research from 2022-23.
Minor changes to the R&D Tax Incentive
With the government committing itself to reduce the rate of company tax by 1.5% to in part account for the Paid Parental Leave Scheme, they have made a similar reduction in the R&D Tax Incentive. Both the refundable and non-refundable rates of R&D Tax Incentive will be reduced by 1.5% effective from 1 July 2014.
This reduction will have a minimal effect for companies currently receiving the non-refundable tax credit due to the reduction in their overall company tax rate. However, for companies who currently access the refundable rate, which don’t pay tax and therefore can’t offset the reduction in R&D Tax
Incentive benefit with the reduction in the company tax rate as a whole, this will mean a small, but real reduction in their benefit.
The cessation of car manufacturing in Australia has brought about a number of changes in grants programs. The government has addressed this with a multi‐part program under the banner of Growth Fund. The Federal Government will contribute $100.6 million to the $155 million Growth Fund that has contributions from both Victorian and South Australian State Governments and Holden and Toyota.
This program will assist transition industry, businesses and individuals affected by the end of car manufacturing through five different programs.
With cessation of ARENA and environment related funding programs, $2.8 billion grant funding has been removed. However, with the introduction of the new Green Army Programme, the Reef 2050 Plan, Working on Country and Land Sector Package, Landcare Programme and Emissions Reduction Fund, the government has committed over $4.55 billion to the environment, through a range on initiatives that will likely involve major grant programs.
The Export Market Development Grant (EMDG) program received an extra $50 million.
In addition, access is now easier with more grants on offer. Given our increasing number of free trade agreements, it is difficult for government to support exporters since tariffs and other measures are gone, so EMDG is a key way the government can help.
Tourism Australia budget has been increased by an extra $50 million for a new grant scheme that helps small operators sell themselves in international markets. National Stronger Regions Fund
The National Stronger Regions Fund will invest $200 million each year over five years in local capital works projects to improve local communities, for a total investment of $1 billion. From 2015, the fund will enable councils and community groups to apply for grants between $20,000 and $10 million, to meet half the cost of community building projects.
Funding priority will be given to disadvantaged regions with a higher than average unemployment rate.