Venture Capital Hates The Commission Of Audit Report

Photo: Getty/Scott Barbour

The association which represents Australia’s venture capital and private equity firms has come out swinging over today’s Commission of Audit report.

The Australian Private Equity and Venture Capital Association says the report is “flawed” and lacks commitment towards building a strong economy long term.

AVCAL is worked up because one of the seven bodies the commission has marked for abolition is the Innovation Investment Fund. While the other program AVCAL was hoping to sneak through unscathed, the Commercialisation Australia program, also made the grants to be abolish list.

The Innovation Investment Fund body provides subsidies to the venture capital industry. The commission said it is on it made the abolish list because it is a source of “industry-specific assistance” and getting rid of these types of bodies will help “avoid distorting resource decisions across the economy”.

The commission has recommended Commercialisation Australia get the chop because it’s a program which it says funds services that are, or could be, “provided by the private sector without government intervention”.

AVCAL chief executive Yasser El-Ansary said the commission “has got this wrong”.

“A small open market economy like ours has to focus on assisting Australian businesses to compete on the world stage, and that’s hugely important to bringing about productivity-enhancing reforms that will create more jobs and more economic growth in the years ahead,” he said.

El-Ansary said the recommendations to abolish both the fund and the program have not been backed up by a “credible or compelling argument”.

He said AVCAL was hoping the review would provide a “comprehensive analysis” on long term government spending obligations.

“In the context of Australia’s innovation system, the Commission looks to have fallen into the trap of taking a short-term view on cutting expenditure that will have a potentially devastating impact on our long-term prosperity,” El-Ansary said.

He warned the government needs to carefully consider the recommendations made around innovation in the report.

“Given the significant structural change that is taking place right now across key industry sectors such as manufacturing, the Government must put in place policies that promote greater private sector investment in new business ventures, which will ultimately play a vitally important role in Australia’s future economic growth,” he said.

Here are the other industry specific grant programs which the commission has also recommended be abolished.

    Asian Century Business Engagement Plan Grants
    Collaborative Research Networks
    Commercialisation Australia
    Community Broadcasting Programme
    Creative Young Stars Programme
    Enterprise Connect Innovation Centres
    Enterprise Solutions Programme – Establishment
    Export Market Development Grants
    Industry Collaboration Fund
    Industry Innovation Precincts
    Innovation Investment Fund
    National School Chaplaincy and Student Welfare Programme
    Parliament and Civics Education Rebate
    Rural Financial Counselling Service
    Small Business Advisory Services Programme
    Suburban Jobs Programme
    Tourism Quality Grants
    Voluntary Environment, Sustainability and Heritage Organisations

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