A $20 million fund which the Allan government promised would turbocharge the industries of the future has been axed 18 months after it was announced, having not provided any grants.
State budget papers show that the Victorian Industry Development Fund (VIDF) has been discontinued and the money reallocated to other areas, with the government arguing its benefits will instead be realised in a separate and broader $150 million scheme.
When the $20 million VIDF was first announced in October 2024, the government promised it would “turbocharge” investment in five priority sectors where there was significant growth potential and which would be at “at the beating heart of Victoria’s future economy”.
These five areas were advanced manufacturing and defence, health technology and medical research, digital technologies, agribusiness and the circular economy.
“This fund will encourage investment from industry by delivering matched funding through grants and providing loans to innovative Victorian start-ups and scale-ups,” the government’s media release said at the time.
But no grants or loans were provided, and the money is now no longer available. The state budget, handed down last week, said the initiative would be “discontinued” and that total estimated investment in the scheme was reduced to zero.
Victorian Chamber of Commerce and Industry acting chief executive Amelia Bitsis said the budget contained “very little” for business, and the chamber was disappointed the fund had been discontinued.
“The Victorian Chamber worked closely with government to shape this initiative because we saw it as a practical way to drive investment, innovation and business growth in our state,” she said.
“We have been consistently asking for greater transparency and accountability for the initiatives and targets outlined in the economic growth statement and this is just another example of why that is needed.”
The Allan government said the same benefits could be found through the Victorian Investment Fund, a $150 million program that also promises to boost these sectors but has a broader remit.
Rather than matching business funding through grants and providing loans to start-ups, it focuses on targeted “strategic, high-value investments” and expanding the capability of existing industries, such as improving their supply chains. A third of it, $50 million, is dedicated to regional Victoria.
Opposition Leader Jess Wilson, who is also the shadow treasurer, said the quiet discontinuation of the VIDF was “yet another example of Labor making big promises and then failing to deliver”.
“Labor’s so-called ‘economic growth statement’ is a fraud that has done nothing to reverse Victoria’s rapidly deteriorating financial position,” she said.
“Only my Liberals and Nationals team has a comprehensive plan to clean up the books, ease cost of living pressures and turn our economy around.”
The VIDF was a key announcement in Premier Jacinta Allan’s economic growth statement, a policy platform that sought to bolster the state’s economic credentials by pledging to cut red tape and work more closely with the private sector. Released in October 2024, it was one of Tim Pallas’ last major policy commitments as treasurer before his retirement in December that year.
Other pledges in the statement included the fast-tracking of gas projects, a halving of business regulators and a pledge to double the limit for how much waste could be burnt to create energy.
An Allan government spokesperson said the work outlined in the economic growth statement was making it simpler to do business in and with Victoria.
“The Victorian Investment Fund is helping encourage investment from industry by fast-tracking strategic, high-value investments across Victoria – fostering innovation, expanding industry capability and creating jobs,” they said.
“We are focused on attracting investments that drive economic growth and strengthen priority industries across the state.”
Bitsis said business confidence was fragile and operating costs were rising, which meant removing stimulus measures like the VIDF sent the wrong signal.
“Businesses need confidence to invest, expand and create jobs, and right now many are questioning whether Victoria remains competitive,” she said.
“The collaborative approach taken in 2024 showed what can be achieved when government and business work together. We urge the government to continue that partnership and ensure Victoria remains a place where business can grow and invest with confidence.”
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