The Perrottet government secretly gutted its flagship innovation program within months of announcing it last year, while also slashing the budget of the department that was charged with developing the program.
Some $263 million was cut from the New South Wales government Future Economy Fund (FEF) last November, less than six months after the $703 million fund was announced to support research, commercialisation and industry growth.
A further $169 million was cut from the fund in the Coalition’s pre-election budget commitment earlier this year.
The then-Coalition government also made multiple reductions to the Department of Enterprise, Investment and Trade (DEIT) budget in 2022 and early 2023 totalling a further $180 million.
The cuts have been revealed by senior officials at a Budget estimates hearing on Wednesday, as Coalition MPs sought to scrutinise the Minns government’s own cuts to innovation programs, which include scrapping the FEF altogether, ending other innovation grants and restructuring Investment NSW.
The Coalition cuts to the FEF and DEIT were not publicly disclosed and are at odds with department’s allocation in the 2022/23 budget, released in June.
“There was a difference between what we actually had available and what was in the budget papers last year,” DEIT secretary Elizabeth Mildwater told the hearing on Wednesday.
Innovation and Industry minister Anoulack Chanthivong has been under pressure to explain the Minns government’s own cuts to innovation programs, but said the discussion must include the previous government’s undisclosed cuts to the FEF.
“Without informing the public, without informing us, they make these significant cuts and then actually don’t want to own up to them,” Mr Chanthivong said.
“This is a very difficult fiscal situation – there’s significant debt, there’s billions of dollars of unfunded programs, the debt per capita [is high].
“This is a tight environment, and we’ll work through the budget to ensure that it delivers good, sound fiscal management and good outcomes for the people of New South Wales.”
Shadow Innovation minister Mark Coure said the government was deflecting from its own cuts to innovation and what he said was a lack of recognition for the sector.
“Minister Chanthivong’s performance in Budget Estimates today confirmed he is a Minister who does not see value in the innovation portfolio, blaming the former government for his lack of advocacy to ensure there was a budget that appropriately supported founders in the innovation sector.” Mr Coure said.
The Future Economy Fund was revealed by then-Treasurer Matt Kean in June last year and touted as a way of capitalising on the state’s relatively successful pandemic response through backing high growth, highly productive industries and attracting investment.
$324 million was to go to the commercialisation of innovations that could grow the economy, including targeted support for start-ups, scale-ups and small-to-medium enterprise sectors in the state.
Another $219 million was slated for the development of key industries like medtech, defence and aerospace, while $142 million was dedicated to industry-research collaboration and innovation in sectors where the state has a comparative advantage, like quantum technologies
The FEF never dispersed any money, with the incoming Minns government putting a pause on all applications to it as part of its line-by-line spending review in May. The Minns government ended the fund in its own Budget in September.
The new government has also cut several pre-existing state innovation programs, including significant reductions to the popular MVP Ventures grants and the budget of the Sydney Startup Hub.
