Read the original article here.
Cara Waters
The Federal Government has frozen funding for small business support services while telling people the process was ongoing.
Officials from the Department of Innovation, Industry, Science and Innovation told a Senate Estimates hearing in Canberra yesterday that “the advice that we would have provided to the applicants is that the assessment process is progressing”.
However, further questioning by the shadow parliamentary secretary for small business, Senator Scott Ryan, revealed program funding had been frozen under a Finance Department directive while applicants were kept in the dark.
The funding freeze follows the head of Commercialisation Australia confirming government grants are on hold following an “unheard of” government review.
Shadow small business minister Bruce Billson said the government had promised money to Business Enterprise Centres but instead put a freeze on the funding without letting those organisations know.
“Thanks to the government’s economic mismanagement it is putting a freeze on much-needed funding intended to support small business advisory services,” Billson said.
“Respected service providers are being left in limbo and forced to wind-back support to small businesses trying to cope with the challenges of a difficult economy made worse by the carbon tax and a growing red tape burden.”
Billson said the government had misled service providers into believing that tenders are still being evaluated when the funding has been frozen.
“While the government fudges its finances to create the illusion of a surplus, it has left small business advisory service providers ‘on hold’ waiting to learn of their funding fate,” Billson said.
“The responsible thing to do would be to advise applicants of the true state of the tender process and their likely fate.”
Jackie Zelinsky, chief executive of Business Enterprise Centre (BEC) Australia, told SmartCompany funding had been put on hold but she says rather than a freeze on funding what has happened is a “pause”.
“Funding has been paused as part of the mid-year review, which is a responsible action taken by the Federal Government in view of the decrease in commodity prices,” she says.
Zelinksy says funding has been on hold since around late August, which has affected 37 of the 95 BECs nationally.
The remaining BECs do not rely on government funding and Zelinsky says government funding is not the only form of funding for BECs.
“We are not a government institution solely dependent on money from the government, the BECs are continuing to provide the support services they do outside of the federal funding,” she says.
“Only 37 were funded under the previous Small Business Advisory Service funding arrangement; two-thirds were operating anyway and continue to operate but we obviously look to the additional funding from the Federal Government to expand services to small business and continue them.”
Zelinsky says some of the funding cuts have hit hard in South Australia where there have also been changes to the funding model and one BEC has been forced to close. However, as the BEC closed before the government put a hold on funding, she says the “pause in funding” is not to blame for that closure.
“Certainly, whilst the BECs are waiting to hear if they are successful in the funding round they have had to reduce their resources and the government is aware of that. But BEC Australia is working very hard with the BECs to determine their ongoing commercial viability and reducing the dependence on government funding,” she says.
Zelinsky says the office of the Minister for Small Business, Brendan O’Connor, has been in touch with BEC Australia on a regular basis and she met with the minister only two weeks ago where he confirmed his ongoing support for Small Business Advisory Service funding.
She says she is hopeful an announcement ending the funding freeze will be made before the mid-year review on November 9.
“It is my understanding that an announcement is pending and I don’t for one minute believe we are not going to get that money,” says Zelinsky.
A spokesperson for Small Business Minister Brendan O’Connor said funding under the Small Business Advisory Service is available through a competitive grants process and that the assessment process is progressing.
“No decision has been made about successful grantees and applications are currently being evaluated,” the spokesperson said.
“Announcements about successful organisations are expected shortly.”