The Victorian government’s sprawling apparatus for startup support is likely facing a massive overhaul, with an independent review recommending the abolition of LaunchVic as a standalone entity and a reduction of at least $350 million in funding over the next four years.
The Independent Review of the VPS: Final Report paints a picture of a confusing, duplicative, and increasingly expensive ecosystem that has made “government confusing and difficult for industry to deal with”.
The Cost of Confusion and Consolidation
According to the review, Victoria’s industry support expenditure has ballooned from at least $236 million in 2014–15 to over $660 million in 2024–25. While that sounds like good news for the sector on paper, the report argues the execution has been messy.
For the startup ecosystem, the headline recommendation is the winding up of LaunchVic.
Established to accelerate the local startup scene, LaunchVic’s functions, specifically its grant, facilitation, and capacity uplift programs, are recommended to be transferred directly into Invest Victoria. The report explicitly recommends that the government "abolish LaunchVic as a standalone entity."
The logic is centralisation. The review posits that Invest Victoria should become the "single entry point" for all government-provided industry support.
The full report can be found here:
Consolidating the Cash
The duplication isn't just administrative; it’s financial. The review highlights a cluttered landscape of equity investment activities that creates risk and drives up delivery costs.
Currently, the state’s investment map looks like this:
Breakthrough Victoria: Undertakes equity investment activities.
Invest Victoria: Manages the $20 million Victorian Equity Investment Attraction Fund and the $25 million Victorian Venture Growth Fund.
Department of Treasury and Finance (DTF): Oversees the $250 million Victorian Business Growth Fund.
LaunchVic: engages in overlapping activities regarding grants and capacity building.
The review notes that while these programs have slightly different goals, they "all interact with equity markets and make investment decisions."
To fix this, the report recommends that Breakthrough Victoria become the sole entity managing existing equity investments currently held by LaunchVic and DTF. However, the report also advises that the government should "reduce overall investment and the level of risk exposure from equity funds investment."
More to come!