Think Tank: won't you grant me a wish?

• 21 January 2009
• Page 1 of 2 : single page

The Panel

	Russell Edwards, NSW state manager of federal government grant distributors AusIndustry
	Kevin Garber, General manager of online media firms Melon Media and spellr.us
	Adrian Spencer, CEO of Grant Ready, a private firm that helps businesses prepare grant applications
	Josh Mehlman, moderator

The purpose of grants

Why does the government give grants to small businesses, and what do SMEs do with them?

Russell Edwards: Grant programs have a policy outcome. For example, it is internationally recognised that there is a failure in the market with innovation. If you hire someone to do research for you, they can leave with that information in their head and you won’t capture the full benefit of the money you put into it. So all countries recognise they need to help companies do more R&D, because that’s good for productivity. Depending who is in government that might be in grants or tax concessions.

Adrian Spencer: If the government gave out funding to every person who started a business, it would lose a lot of taxpayers’ money. As a result, a lot of start-up support has ended as training, especially through the state governments. You’ve got people with great ideas saying, “Where can I put my hands on some cash?”, because that’s going to make a big difference to starting up their business. I think there are funds there, but it’s often a challenge to find them.

Find out what you can get

How can small businesses find out what grants are available to them?

Russell: I’ll admit governments are impenetrable to a lot of businesses. Most federal grant programs come through the Department of Innovation, Industry, Science and Research. AusIndustry is the public face of that. There’s a lot of groundwork making sure business communities, councils and area economic committees are aware of what’s available.

There are specialist grants for the agricultural sector and the universities, but most of the business grants are through us and state governments. Most of the dollars are in the federal programs. State programs tend to be broader and more flexible, while the federal government tends to have the big-value programs with very strong policy objectives.

Adrian: We have been helping companies find grants for about eight years, and the first thing they say when they come to us is, “We don’t know where to start”. There are up to 300 state and federal grants available; there are roughly five new programs being launched and five programs closing each week. They are across 52 government websites and 19 different departments. AusIndustry is a great place to start because they capture about 20% of those grants, but a whole lot more in terms of the amount of funding available. There’s also grantslink.gov.au and each state government has a listing on its own sites.

We just found it all too hard, so we built our own listing, because we needed it all in one place. We wanted the language to be similar; we wanted to simplify it and provide consistent information.

Kevin Garber: I think you hit the nail on the head about consistent language. Sometimes when I see these ads, I worry they might not appeal to innovative business owners because the marketing message is so different to the way entrepreneurs think.

Russell: Sure, there are always ways we can improve. I would say before the Commercial Ready grant was closed, and certainly with the R&D Tax Concession, we hit most of the entrepreneurs. I don’t think there’s a biotech company in Australia that hasn’t received a grant from one of the AusIndustry programs. But it’s the smaller people who may not think about getting a government grant that are more of a challenge.

Adrian: We talk to companies every day about the AusIndustry programs and they say, “We’ve never heard of it”. They’ve got their head down and bum up and they’re trying to turn a dollar and make their business work. They don’t have time to find out. We spend a lot of our time trying to educate people, just trying to get the word out there.

Don’t hold your breath

How long does it take from starting the application process to getting the money?

Russell: It depends on the program. We tend to run our grant programs in rounds so there’s a time penalty; you have to wait for the next round to be open. Then there’s the assessment and decision-making process, and then signing the agreements. You’re talking about months. Entitlements are quicker. If you get an LPG conversion on your car and bring us the form, we make the payment tonight. If you come to us for a grant for a million dollars, it will take longer.

Adrian: In our experience, at the federal level it might take you three or four months for grants from half a million dollars. It could take three to four months to put an application together and maybe two to three months until you get the money. From a company perspective, that can be quite frustrating because often it’s not commercially realistic; it’s not sensitive to the demands driving their business.

Grants aren’t free money

It seems ironic that you have got to actually market to people, “Hey, we’ll give you money”.

Russell: Give money? We’re very clear about that: as the grant size goes up, the due diligence goes up. Entitlement programs are easy if you tick the boxes – I’m entitled, I get access. The R&D Tax Concession is a good example of that.

But for grants such as Climate Ready, Retooling for Climate Change or the Green Building Fund, you’ve got to compete with other companies. If you’re going to get a million dollars or more, we need to know you’ve got the skills to undertake the project, you understand your market and you can afford your half without going broke – most of these grants are 50–50.