The Claim
“Cut $845.6 million from programs which fund innovative start-ups.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The claim that the Coalition government cut $845.6 million from start-up funding programs is factually accurate. The 2014-15 federal budget announced the abolition of eight programs, with projected savings of $845.6 million over five years [1][2][3].
The programs abolished included:
- Commercialisation Australia (CA) - Had provided over $200 million in funding to 503 companies since its inception, including successful companies like Seek.com [4][5]
- Innovation Investment Fund (IIF) - Had invested over $300 million in Australian venture capital funds [6]
- Australian Industry Participation
- Enterprise Solutions
- Industry Innovations Councils
- Enterprise Connect
- Industry Innovation Precincts
- National ICT Australia (NICTA) funding (ceased from 2016) [2]
The government replaced these programs with a single Entrepreneurs' Infrastructure Program, funded at $484.2 million over five years [3][7]. This represented a net reduction of approximately $361.4 million in innovation program funding compared to the previous arrangements.
Missing Context
The cuts followed National Commission of Audit recommendations. The budget implemented recommendations from the National Commission of Audit to "abolish or merge dozens of government agencies" and reduce industry assistance programs [2][8].
The government provided an alternative program. Rather than simply cutting support, the government established the Entrepreneurs' Infrastructure Program with $484.2 million to focus on "supporting the commercialisation of good ideas, job creation and lifting the capabilities of small businesses" [3][7].
The policy rationale was stated. Treasurer Joe Hockey said the government would "refocus our effort on innovation and self-reliance" and that "businesses should stand or fall on their ability to produce goods and services that people actually want" [3].
Additional cuts affected related programs. The Interactive Games Fund (established by Labor in 2012 with $20 million over three years) was also axed, saving $10 million [9].
Source Credibility Assessment
itnews.com.au is an Australian technology news website focused on business technology news, analysis, and opinion for Australian CIOs and IT professionals. It is owned by nextmedia and is generally regarded as a mainstream technology industry publication without strong partisan alignment. The source reported factual budget information that was widely corroborated by other outlets including the Australian Financial Review, ZDNet, and SmartCompany [1][2][3].
Labor Comparison
Did Labor establish these programs?
Yes. The programs that were cut were largely established or expanded under previous Labor governments:
- Commercialisation Australia was established under the Rudd Labor government in 2009 as part of the "Powering Ideas" innovation agenda [10]
- Innovation Investment Fund was also a Labor-era program, dating back to 2009-2010 [10]
- Australian Interactive Games Fund was established by Labor in 2012 with $20 million over three years [9]
Labor's innovation track record:
The Labor government (2007-2013) invested in these programs as part of their innovation policy. However, it's worth noting that innovation funding has historically fluctuated between governments of both parties based on budget priorities and economic conditions.
Coalition's subsequent innovation policy:
In December 2015, the Turnbull Coalition government launched the National Innovation and Science Agenda (NISA), committing over $1.1 billion over four years to innovation, including $459 million for key research organizations and $2.3 billion over 10 years for broader innovation support [11]. This represented a significant renewed investment in innovation, albeit with different program structures than those abolished in 2014.
Balanced Perspective
While the claim accurately reports the $845.6 million in savings from abolishing start-up programs, it omits important context about the government's rationale and replacement programs.
Criticisms of the cuts:
Industry groups including StartupAUS, the Australian Information Industry Association (AIIA), and individual entrepreneurs strongly criticized the cuts. StartupAUS described Commercialisation Australia as "a vital lifeline for Australian startups and much needed support for angel investment" [6]. Critics noted that Australia already invested "a fraction of what other developed countries do funding tech startups" [9].
Government justification:
The government argued it was streamlining an "overlapping plethora of small grants and entitlements" into a more focused program [7]. Industry Minister Ian Macfarlane stated the new program would "bring research and business together to develop and commercialise home-grown ideas" [7]. The changes aligned with the National Commission of Audit's recommendations to reduce government agencies and streamline industry assistance [2].
Subsequent developments:
The criticism of these cuts likely influenced the Turnbull government's 2015 NISA announcement, which represented a major reinvestment in innovation with over $1.1 billion in funding. This suggests the Coalition did respond to concerns about innovation support, albeit with a different programmatic approach than the Labor programs they had abolished.
Comparative context:
Budget cuts to innovation programs have occurred under governments of both parties when fiscal consolidation is prioritized. The 2014 cuts were part of a broader budget repair agenda following the global financial crisis and stimulus spending era. Both parties have subsequently supported innovation funding, with Labor creating programs in 2009-2012 and the Coalition launching NISA in 2015.
PARTIALLY TRUE
6.0
out of 10
The $845.6 million figure is accurate and verified through multiple authoritative sources including the Australian Financial Review, ZDNet, and industry publications. However, the claim presents only one side of the story by omitting:
- The replacement Entrepreneurs' Infrastructure Program ($484.2 million)
- The National Commission of Audit rationale for the cuts
- The subsequent $1.1 billion NISA innovation agenda announced in 2015
- That these were Labor-established programs being abolished
The claim is factually correct about the cuts but misleading by implying this was the end of Coalition support for innovation, when in fact the government both replaced the programs (at reduced funding) and later substantially increased innovation investment through NISA.
Final Score
6.0
OUT OF 10
PARTIALLY TRUE
The $845.6 million figure is accurate and verified through multiple authoritative sources including the Australian Financial Review, ZDNet, and industry publications. However, the claim presents only one side of the story by omitting:
- The replacement Entrepreneurs' Infrastructure Program ($484.2 million)
- The National Commission of Audit rationale for the cuts
- The subsequent $1.1 billion NISA innovation agenda announced in 2015
- That these were Labor-established programs being abolished
The claim is factually correct about the cuts but misleading by implying this was the end of Coalition support for innovation, when in fact the government both replaced the programs (at reduced funding) and later substantially increased innovation investment through NISA.
📚 SOURCES & CITATIONS (8)
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1
itnews.com.au
Supercomputers in, regulators out.
iTnews -
2
afr.com
Afr
-
3
smartcompany.com.au
The 2014 budget delivered the news that many businesses were dreading with the abolition of the Innovation Investment Fund and Commercialisation
SmartCompany -
4
delimiter.com.au
Australia's highest-profile organisation representing the technology startup sector has strongly criticised the Federal Government's substantial cuts to supporting resources as part of this year's budget, stating that the Government must move quickly to fill the gap it has created.
Delimiter -
5
zdnet.com
Funding cuts in the 2014-15 federal budget will gut Australia’s technology startup sector, warn industry advocates.
ZDNET -
6
abc.net.au
Australia's environment and science sectors have been slashed by hundreds of millions of dollars, with agencies axed and programs scrapped. Scientists say many of the cuts will be crippling. Read more about which projects in the science sector have been affected by the 2014 federal budget.
Abc Net -
7PDF
14. Australian Innovation Systems Overview 2023
Research Csiro • PDF Document -
8
mondaq.com
Australia's poor record in translating research to commercial products and services is well known.
The Australian Government commits over $1 billion to science and innovation
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.