Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I rise today to criticise the Rudd government’s decision to axe the Commercial Ready program. Commercial Ready was a valuable program established under the previous coalition government. It provided much needed assistance to up and coming companies, many of which were small and innovative businesses. Commercial Ready provided assistance during the commercialisation stage of business innovation ventures and was the only government program that assisted biotechnology and medical device companies where they needed it—at the commercialisation stage. Commercial Ready helped many small and innovative companies bring products to the market that benefited the community and/or met market demand. One example is the head lice treatment product commercialised by Hatchtech with the help of Commercial Ready. In my electorate of Swan the innovative company Pine Ridge Holdings Pty Ltd received a grant for the research and development of cardiothoracic and thyroid retractors.

Despite the program’s great success, on 2 June the Senate estimates heard that the Commercial Ready program had been secretly closed to applications on 28 April—16 days before the government officially announced the decision on budget night, 13 May. Seventy-one pending applications were affected by this secret closure, as were companies who continued to spend thousands of dollars on consultancies for the Commercial Ready applications without knowing that the program would cease to exist. Others had been told that their projects had been successful bar the final dot on the ‘i’ and had started celebrating, only to despair the next day.

Recently I met with a constituent, Dr Alistair Murdoch, who was the Chief Executive Officer of Spirogene Pty Ltd. Spirogene had been a successful recipient of the Commercial Ready scheme and had benefited greatly from it. An emerging global problem in animal health and scientific interest by a world authority in this field led to the establishment of Spirogene. It grew from an idea to six employees in the space of eight months. Four of its employees are research assistants and postdoctoral fellows. Without this grants program we would have certainly lost their knowledge to overseas organisations. Dr Murdoch was adamant that the Commercial Ready and Commercial Ready Plus programs should not have been cancelled. He asked me how a government that has continuously promulgated a commitment to innovation as a key driver of productivity and commercial growth can cancel a major program that has led to significant innovation, commercial and ethical benefits, the creation of new businesses and sectors, and the revitalisation of existing industries.

Spirogene used their grant to commence their initial proof of clinic trials in the development of an innovative recombinant vaccine. This will be a global first in this area and has the potential to become a global industry with a significant impact on food production. The Commercial Ready grant enabled Spirogene to increase the speed of development of this technology and importantly assisted in keeping this exciting intellectual property within Australia. Our preference is to value-add to this technology locally by building local expertise and skills in this growing area of recombinant vaccine technology. The company has been through a seed-raising round and has had independent validation of the technologies, so is not reliant on government grants alone. However, the government’s decision to axe Commercial Ready will impact on Spirogene’s ability to keep the development within Australian shores.

The axing of the Commercial Ready program has already had profound consequences for innovative companies, and more are likely to emerge. The cancellation of Commercial Ready will force some companies to relocate overseas where government assistance programs exist. Others, like Spirogene, will be forced to source overseas investment, which will reduce the end benefits to Australians because of increased foreign ownership. This lack of motivation for innovation in Australia will also mean that Australia will miss out on cures and treatments for conditions or illnesses. In axing Commercial Ready, the Rudd government cited a 2007 Productivity Commission report that found the program had supported too many projects that could proceed without public funding. However, the PC report recommended not the cancellation of the program but that a stronger filter should apply to the grant.

In summation, the government needs to give urgent consideration and assistance to those companies who had already submitted a grant application under the Commercial Ready program at their own great expense. Also as a priority the government must reinstate the Commercial Ready program or develop a replacement program to be in place and ready for operation at the beginning of the 2010 financial year. If it fails to do so, the Rudd government will inflict serious damage upon Australia’s innovative industries and the future of this nation. I recently spoke on the collapse of consumer and commercial confidence. The scrapping of this program is another example of economic vandalism by this government. This scrapping will do nothing to regain lost ground in that confidence.