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Government Grants for Small Business

Need help to start or develop a business? Mariana von Lucken leads us through the maze of government grants and concessions that can make the difference between business success and failure.

Active ImageThe range of government grants and concessions to assist both start-up and existing businesses is continually expanding. There is now something for almost any business, large and small, regardless of the area in which they operate.

Unfortunately, many businesses that are aware of these grants can be put off by the application process. However, many are very worthwhile and can underwrite activities that businesses might not otherwise be able to afford, or make the difference between profit and loss on some activities.

You can research and apply for most of these grants and concessions online, making it much easier to take advantage of such opportunities. Here are some of the main grants, tax concessions and offsets.



Commercial Ready Grant

This program, established in September 2005, provides funding to organisations seeking to develop a new product, process or service. Its aim is to improve the competitiveness of Australian businesses in the global marketplace and foster collaboration between industries and research institutions.

The Commercial Ready program provides grants of between $50,000 and $5 million to small to medium sized businesses for projects of up to three years in duration. Companies can apply for funding to meet up to half the costs of eligible expenditure incurred in developing a new product, proof-of-concept, and early-stage commercialisation activities.

More information is available at www.ausindustry.gov.au

Textiles, Clothing & Footwear (TCF) Small Business Program

Small businesses in the TCF industry that are looking to improve their business enterprise culture may be eligible for a grant of up to $50,000.

Such a grant is intended to keep the business focus on the maximisation of commercial returns on products and services, financial growth and expansion, and also help develop and maintain competitive market edge.

The grant is only available to businesses that have not already received, nor is likely to receive, funding from either the TCF (SIP) Scheme or the TCF Post-2005 (SIP) Scheme. Applicants must also make a cash contribution to the project. 


Tax Concessions

There are a number of tax concessions available when research and development (R&D) is undertaken.

Research and Development Tax Concession

This is the principal government initiative to enhance and increase the amount of R&D undertaken in Australia. It is available to all industry sectors, and each company controls the direction of their R&D.

The concession means companies may be able to deduct up to 125 percent of their expenditure on R&D activities when lodging their corporate tax return. To receive the concession, businesses undertaking eligible activities must be registered annually with the Industry Research and Development Board and must have an R&D plan.

Premium R&D Tax Concession

A 175 percent Premium (Incremental) Tax Concession is available in certain circumstances. This is a premium concession available to businesses with a three consecutive year history of registering for and claiming the tax concession, or of receiving grants for R&D projects under the Board’s R&D Start grant.

Applicants must be companies incorporated in Australia and there is a range of eligibility criteria that must be met. More information is available at www.ausindustry.gov.au

Research and Development Tax Offset

The offset is available to small companies that undertake R&D activities. Businesses with turnover of less than $5 million per year and with aggregate research and development expenditure of up to $1 million per year are eligible to receive a cash rebate of 37.5 cents per dollar spent on eligible R&D expenditure. The company must elect in its tax return to receive the rebate. The tax concession allows companies to deduct or receive cash up to 175 percent of eligible expenditure on R&D activities (125 percent base).

Businesses must be registered for R&D with AusIndustry before they lodge their company income tax return, as the ATO will not give the refund to amended tax returns.

Turnover must be less than $5 million and the aggregate R&D amount must exceed $20,000 but not be more than $1,000,000.

Energy Grants Credits Scheme

With the ever rising cost of fuel prices, it makes sense for businesses to reduce fuel costs. With this in mind, the Australian government, through the ATO, has established the ‘Energy grants credit scheme’, which provides a grant for fuel used for specific activities. This scheme replaced the diesel fuel rebate scheme (EGCS) and the diesel and alternative fuels grants scheme on July 1, 2003.

Some of the specific activities covered under this scheme include road transport, agriculture, fishing, forestry, mining and marine transport. The fuels referred to by the energy grant scheme include diesel, liquefied petroleum gas (LPG), compressed natural gas (CNG), ethanol, liquefied natural gas (LNG), and bio-diesel.

The grant rates vary depending upon the activity and fuel. To make a claim, registration is necessary, but such a grant is worth considering for any business involved in transporting goods.

Businesses with road transport eligibility include those carrying on an enterprise, and undertaking eligible trips by road in Australia (including incidental use and any other use integral to the operation of the vehicle).

Vehicle Eligible Ineligible

A vehicle of less than GVM 4.5 tonnes


all trips are ineligible

A bus of at least GVM 4.5 tonnes using alternative fuel

all trips on roads are eligible


A vehicle of at least 4.5 tonnes GVM but less than 20 tonnes. For more details refer to the booklet, Road transport: eligible trips for vehicles 4.5 to 20 tonnes.


Eligible trips include:

• all trips made as part of a primary production business

• all trips made by a contractor solely on behalf of one or more primary production businesses

• trips transporting goods and passengers: from a point outside a metropolitan area to another point outside a metropolitan area, or from a point outside a metropolitan area to a point inside a metropolitan area (or vice versa).   

trips transporting goods and passengers for a business from one point inside a metropolitan area to another point inside that metropolitan area.

Emergency vehicles of at least 4.5 tonnes

 all trips by emergency vehicles (including auxiliary equipment associated with the vehicle) are eligible.


A vehicle of GVM 20 tonnes or more

 all trips on roads are eligible



To access the EGCS, businesses are required to register for the scheme with the Australian Taxation Office. More information is available at www.ato.gov.au.


Other Grants And Concessions

There is now a range of very useful government-run websites that list the grants, tax concessions and offsets available to businesses.

These include:

•    www.grantslink.gov.au

•    www.business.gov.au

•    www.ato.gov.au

•    www.smallbiz.nsw.gov.au

•    www.ausindustry.gov.au

•    www.austrade.gov.au

Also, check out our government internet directory on page 26 to find out for more assistance. Some federal and state government-run programs to help develop and grow a business include Business Enterprise Centres (BECs). These centres are located across Australia and provide a range of resources, some of which are free, including training programs, business referrals and mentoring support.

Business Advisory Services

The NSW government also runs free business advisory services to people starting and operating a business. Business advisory services provide assistance, seminars/workshops and networking opportunities for business owners and managers to plan their growth and development.

Stepping Up Mentoring Program

Stepping Up is a program which links small business owners across NSW to build profits, jobs, and exports, in the critical phase after start-up.

The Stepping Up program has two core components: workshops on current business growth issues; and matching up with an experienced business person who mentors the business owner—for example, in developing a business or marketing plan or a financial strategy, solving a production problem or identifying a new market entry strategy.

There is a cost for business of between $500 to $1,000 depending on the nature of the Stepping Up group. However, the NSW government matches each participant’s contribution, up to an overall maximum for any one business of $1,000.


There are also a number of state programs and grants for those looking to start a business. For example, the website www.business.gov.au has information for those who are not sure how to get started, including templates for business plans, marketing plans, export plans and succession plans.

Some of the state-run funding and grants include young filmmakers fund, arts awards, funding and awards for science and medical research, youth business programs, and innovation awards.

It is always worthwhile regularly checking up on the grants and concessions from time to time as rules do change and businesses that fall outside guidelines now might find they qualify in a year or two.  

* Mariana von Lucken is a director with business and financial advisers and accountants, HLB Mann Judd Sydney.

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