Labor's $300m industry cuts
Karen Andrews: Labor's future plans for tech programs is “absolutely devastating”
Labor would cut more than $300 million from the Industry Growth Centres and Entrepreneurs’ Programme – nearly half of the overall budget for these initiatives – if it wins next week’s federal election.
Labor’s policy costings, released Friday morning, revealed $309 million would be “redirected” from the two innovation-focused programs over the next four years.
That equates to 48 per cent of the overall funding of both. The Coalition government has allocated a combined $639 million to the two programs to 2023, with about $160 million in funding annually.
The cuts would come from uncommitted program funds and be used to meet “Labor’s industry and innovation priorities”, going towards already announced policies such as the Electric Vehicle Manufacturing and Innovation Strategy, the Australian Space Industry Plan and the research and development tax incentive collaboration premium, the Opposition said.
Shadow industry minister Kim Carr said the programs in question are not performing effectively at the moment.
“We are committed to providing business capability and commercialisation support, but key industry and innovation objectives are not being met by the settings and organisation of the current government. Labor is taking a responsible approach to budget management and being transparent about our approach,” Senator Carr told InnovationAus.com.
Current innovation programs would also be reviewed and “reconfigured” if Labor wins the election to bring them into line with the party’s “innovation objectives".
“Five ministers in six years has left business dazed and confused about what the Liberal government is interested in or wants to do," Senator Carr said.
"We need to reduce fragmentation in programs, get more collaboration in the system and develop a stronger focus on how we build a 21st century economy that meets the challenge of climate change.”
The cuts to the two flagship Coalition innovation programs would be “absolutely devastating”, Industry Minister Karen Andrews told InnovationAus.com.
The breakdown between which specific in each programs that would bear the brunt of the cuts was not revealed, with $12 million to be cut in 2019-20, and nearly $100 million each year for the next three years.
The cuts have been slammed by Ms Andrews, despite the Coalition itself cutting nearly $50 million from the two programs across the last two federal budgets.
“Kim Carr is happy to rip $309 million from innovation and industry – this is appalling and Labor knows this, which is why they’ve waited so long to release their costings,” she said.
“Labor’s hypocrisy here is unbelievable. $309 million in cuts will be absolutely devastating to the sector and will have huge repercussions more broadly, on jobs, small businesses, industry and research outcomes,” Ms Andrews told InnovationAus.com.
Labor has long-been critical of the Industry Growth Centres program since it was launched by the Abbott government in 2013 in an effort to improve industry collaboration.
Senator Carr has labelled the scheme as a “stream of underfunded, disconnected, piecemeal programs that no-one has heard about”.
Speaking to InnovationAus.com late last year, Senator Carr questioned the effectiveness of the growth centres and whether taxpayers were getting value for money with the $120 million spent annually on them.
“You do have to really ask yourself, ‘what has actually been achieved by this program?’. It goes to the fundamental question, what is the role of the growth centres?” Senator Carr told InnovationAus.com in December.
“The feedback I am getting – from manufacturing firms across a variety of sectors in particular – are saying the Growth Centres’ attitude is dismissive and arrogant and that they are not working collaboratively. You would have to say that at best the performance is uneven. No-one has said the Growth Centres are doing an outstanding job.”
But Ms Andrews said the growth centres have enjoyed “incredible progress” since they were launched.
“The Industry Growth Centres initiative is about industries setting their own plans for long-term growth and profitability. They’ve engaged with over 25,000 firms, research organisations and industry associations,” she said.
“They’ve committed over $46 million to more than 100 collaborative projects – having leveraged over $63.2 million from industry and research partners, together these projects are worth more than $109 million.”
The Growth Centres were created with repurposed funding when the Coalition was elected to government in 2013, forming a major part of its $400 million innovation and competitiveness policy.
The centres were tasked with focusing on increasing collaboration and commercialisation, improving international opportunities and market access, enhancing management and workforce skills and identifying opportunities for regulatory reform.
The centres were originally meant to become self-funded through membership fees and member services after the four-year funding period came to a close.
In December last year, this goal was extended to six years, with a further $60 million in funding provided to the six growth centres over two years.
The growth sectors are focused on six different sectors: advanced manufacturing, cybersecurity, food and agribusiness, medical technology and pharmaceuticals, mining equipment, technologies and services, and oil, gas and energy resources.
A four-month performance review of the six Growth Centres was completed in November last year, but will not be made public before the 18 May election.
Despite the large amounts of funding for the growth centres, it was revealed during senate estimates last year that the government was set to spend $450,000 on a two-month communications campaign after a survey found there was “low awareness” of the initiative.
The Entrepreneurs’ Programme is a “flagship initiative for business competitiveness and productivity” launched by Mr Turnbull as part of the National Innovation and Science Agenda in late 2015. It has four main areas: Accelerating Commercialisation, business management, Incubator Support and innovation connections.
Ms Andrews said the program is a “key plank in economic growth and job creation”, with more than 300 grants worth nearly $170 million already being dished out.
The Coalition’s own cuts to these two programs, as revealed in the April budget, included $13.9 million in new savings, with $9.9 million to be stripped from the Entrepreneurs’ Programme and $4 million from the Growth Centres.
Labor has announced a series of innovation and tech-focused policies during the election campaign, including $170 million for a research and development tax incentive collaboration premium, $57 million for an electric vehicles manufacturing and innovation strategy, $3 million for an artificial intelligence centre of excellence and $26 million for regional digital