Government freeze on grants raises concern in biotech sector

The life science sector is increasingly concerned over an indefinite freeze which has been placed on federal government grants that support innovation.

The freeze is not only preventing funds from flowing through to companies that have lodged applications, but the uncertainty over the nature and implications of the freeze is causing some to fear that certain grants may be cut.

As of August 30, the federal government put a freeze on paying out new grants, including those offered by Commercialisation Australia and the Clean Technology Investment Fund.

According to a spokesperson for the Industry and Innovation Minister Greg Combet, the freeze is a “normal part of the Budget process” even though such freezes have not occurred regularly in previous years.

The government has also not announced when the freeze will end, and questions from ALS to that effect directed to AusIndustry and the Department of Industry, Innovation, Science, Research and Tertiary Education (DIISRTE) have gone unanswered.

The full response from Minister Combet’s spokesperson to a range of questions about the nature, extent and reasons for the freeze is as follows:

“The Government is collecting additional information on how grants programs are being rolled out and examining every dollar of spending to make sure taxpayers are getting value for money.

“This is a normal part of the Budget process and is exactly what fiscally responsible governments do. While this process is underway there will be a brief pause in the granting of funds.

“However, all the background work such as the preparation of guidelines and assessment of applications is continuing in the normal way.”

According to AusBiotech CEO, Dr Anna Lavelle, the unexplained grant freeze is causing consternation in the biotechnology industry, which is the recipient of many of the frozen grants that are designed to promote innovation.

“This is a very concerning development on so many levels,” she said. “This interruption to support for a burgeoning industry has the potential to wind back our hard-won momentum in biotechnology.

“Members are extremely and justifiably anxious about what this means about if and when the programs will resume normal functioning – especially with the disastrous and swift axing of the Commercial Ready program fresh in their memories.

“On behalf of the industry I call on the Government to give a clear timeline for resumption and an assurance that these programs are not at risk – after years of policy planning, inquiries, reviews and funds have been invested in their implementation,” said Lavelle.

Some in the industry fear the government has prioritised a budget surplus in the lead up to an election in 2013 above the needs of small innovative companies, and it seeking to cut costs in the face of declining government revenues.

The life sciences industry is already shaken by the prospect of the newly introduced R&D Tax Incentive will be trimmed.