Government needs to stay away from ‘picking winners’

Responding to reports that the Government is considering establishing something similar to Australia’s Business Growth Fund, Taxpayers’ Union spokesperson Tory Relf said:

“The Government needs to stop speculating with taxpayers’ funds."

“This looks eerily similar to Callaghan Innovation, which was disestablished last year because it had become an unfocused and underperforming agency. It invested too broadly and in too many companies that ultimately failed or moved offshore."

“What would be different about this proposal? The problem this fund appears to address is that the companies under consideration cannot access growth capital. The question that must be asked, and answered first, is: why?"

“The suggestion is that they are too small, but size alone should not deter rational investors."

“The real reason is much more likely to be that their returns are viewed as too low, given the risk of any capital investment. If banks and venture capitalists are unwilling to invest in these firms, why should taxpayers be exposed to these risks?"

“Minister Willis has previously been sceptical about governments attempting to ‘pick winners’ — and the Taxpayers’ Union is in complete agreement. Governments have a very poor track record at picking winners, so why is she now considering trying doing just that?”