Minister for Industry, Ian Macfarlane, has staunchly defended the decision not to release more funds before the end of the current financial year, saying that the current program is fully subscribed.
-The Government has not frozen the R&D Start program, in fact we are spending more on the program this year than ever before," Macfarlane said in a statement to the press. -Six hundred projects are receiving grants totalling more than AU$200 million this financial year," he added.
Nonetheless, little hope is held for those companies that had applications being processed at the time when the funding tap was unceremoniously turned off. While a spokesperson for the Minister said that those already involved in the process could simply re-submit their applications in the new financial year, many involved in the process itself have branded the approach untenable.
Greg Hetherington, CEO of Identity Software, had spent over a year raising funds and fulfilling the requirements in accordance with his application.
-Even if our applications is reconsidered at some point in the future we have lost a lot of market opportunities," Hetherington said. -When funding does become available again there will be a huge backlog of applicants."
One of the key concerns expressed by Hetherington was the effect the cancellation might have on private investors and confidence in the program generally.
-Part of the program's requirements was that each applicant had demonstrated interest from external investors," Hetherington said. -Even if they start the program again it will be very difficult to convince investors to back a project which depends on a Start Grant, the scheme will loose all credibility."
According to one source, who preferred to remain anonymous, industry groups are currently in deliberations with the Department of Industry and AusIndustry in order to draft a more appropriate outcome for applicants. However, a spokesperson for the Minister denied talks were underway and said that the only avenue open to current applicants was to re-apply when the project was reopened.
-Legally the Industry Research and Development board is not able to hold the grants over until a later date," the spokesperson said. -All current applications will have to be withdrawn, and resubmitted when the process is restarted in the new financial year."
Officially AusIndustry, the agency charged with overseeing the grants, is advising current applicants they will be advised the moment the application process starts again. However, with conservative estimates setting this figure at no sooner than December 2002, few of the companies involved will be able to keep their operations on hold for the next eight months.
Despite the debacle, applicants who have spoken with ZDNet Australia have unanimously expressed their support for AusIndustry and the support provided through the agency.
-I have no complaints with AusIndustry," said Hetherington. -They have been doing everything they can to help us through this whole process."
