Budget gives startups $392 million fund to commercialise ideas, plus $101m for quantum and AI

The 2023 federal budget has earmarked $392 million Industry Growth Program in advice and grants for startups and small businesses, to help them commercialise their ideas.

The announcement by federal treasurer Jim Chalmers in the 2023 budget on Tuesday night is part of more than $500 million in funding that science and industry minister Ed Husic says will to lay the foundations for future economic growth in the sectors.

Twelve months after winning the election, it seems the budget announcement is the Treasurer dressing up the mutton of the former government’s Accelerating Commercialisation grant, as Labor lamb. That program shut down today.

It’s also worth remembering that following a damning audit report into the former Morrison government’s Entrepreneurs Program, which included Accelerating Commercialisation, the previous Chalmers Budget in October last year pulled $198 million from it, leaving the cash in the “uncommitted” bucket. Seven months on, the treasurer seems to have found a commitment.

This evening’s announcement was light on detail, but the old AC grant program offered matching funding of up to $1 million to bring ideas to market, alongside grants of up to $500,000 grants for commercialising research. Budget paper No. 2 says “support will be targeted towards businesses operating in the priority areas of the National Reconstruction Fund“, the government’s $15 billion manufacturing investment program, which is focused on renewables, fintech, AI, robotics and quantum

Husic said the Accelerating Commercialisation program will back innovators with investment and advice “so they can make the jump from brilliant idea to business plan to a growing enterprise” and expand the pipeline of investment-ready projects for the 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,” he said.

All up, there’s $431.9 million over 4 years from 2023–24 – and $79.2 million per year ongoing – to support SMEs and startups. After that, the Industry Growth Program has ongoing funding $68.2 million a year.

Then there’s also $39.6 million over 4 years from next financial year ($11m a year ongoing) to continue the Single Business Service, which supports SME engagement with all levels of government.

The Industry Growth Program was welcomed by the chair of medtech and biotech innovation company MTPConnect, Jaala Pulford, who said it would “help turbocharge the commercialisation journey” for medical science startups and SMEs.

“In a tough budget environment, it’s a welcome commitment to the potential of the MTP (medtech, biotech & pharmaceutical) sector to deliver new, high paying jobs and economic growth, through the development and commercialisation of new medicines and medical devices,” she said.

“The Industry Growth Program has the potential to work hand-in-glove with the National Reconstruction Fund, providing integrated support throughout a company’s commercial lifecycle.”

AI and quantum for business

There’s also good news for the quantum and artificial intelligence sectors (AI) with an additional $101 million over the next five years heading to businesses so they can integrate quantum and AI technologies into their operations.

All up there’s $116 million on the table to support the development of critical technologies.

That includes a Critical Technologies Challenge Program, which will support projects that use them to solve significant national challenges, and will commence with a focus on projects that use quantum computing – extending the National AI Centre and its role in supporting responsible AI usage through developing governance and industry capabilities – establishing an Australian Centre for Quantum Growth to support ecosystem growth and commercialisation in Australia’s quantum industry – supporting small and medium enterprises’ adoption of AI technologies to improve business processes and increase trade competitiveness

There’s also $14.8 million over 4 years from 2023-24 to establish the Powering Australia Industry Growth Centre, an election promise, to support the local manufacturing of renewable energy technology, as part of the government’s Australian Made Battery Plan.

That measure will be fully offset by redirecting funding from within the industry, science and resources portfolio.

“This funding will work in tandem with Australia’s first National Quantum Strategy, which the Government announced last week, and the Government’s $15 billion National Reconstruction Fund,” Husic said.

$2bn for hydrogen

Chalmers and the government are also betting big on hydrogen as part of the nation’s energy shift, with a $2 billion Hydrogen Headstart program.

“Hydrogen power means Wollongong, Gladstone and Whyalla, can make and export everything from renewable energy to green steel,” Chalmers said in his budget speech, adding that the government’s funding pledges for renewables is now at $40 billion.

“Seizing these kinds of industrial and economic opportunities will be the biggest driver and determinant of our future prosperity,” he said.

Hydrogen Headstart will provide revenue support for large-scale renewable hydrogen projects through competitive hydrogen production contracts. The funding is designed to help bridge the commercial gap for early projects, in the hope it will deliver up to a gigawatt of electrolyser capacity by 2030 through 2 to 3 flagship projects.