How a little boost can go a long way

Funding boost: The right funding incentive program can make all the different in the economic future of a regional community.
Funding boost: The right funding incentive program can make all the different in the economic future of a regional community.

In 2016, Gloucester was given a unique opportunity to help create new long term jobs.

The community was provided with a $2 million legacy fund to help deliver ongoing economic benefit to the region.

The funds came off the back of AGL’s announcement that it will not proceed with the Gloucester Gas Project; a project which had brought Gloucester into national focus as protests against the project saw the community divided. 

As part of AGL’s exit strategy it set up the Gloucester Independent Community Legacy Fund offering existing business the chance at a financial boost to help expand and increase employment capacity. 

The fund has so far created over 70 prospective jobs in the community, with more expected as the businesses who received the funding continue to expand.

Small Business Connect senior mentor and adviser, Michael Hilsden said the success of this program in Gloucester could easily be emulated in other communities if provided with a similar funding incentive structure.

“The impact was remarkable in Gloucester and the fund has shown the way to boost regional economies and local jobs in our country towns,” he said.

The fund was designed to support small businesses to grow and expand with the ultimate goal of viable, long term job creation.

Businesses needed to demonstrate clear future growth using information from the existing business including orders and contracts; outline how the growth would boost local spending and the projected sustainable job creation for at least four years.

Mr Hilsden said the AGL funding model worked due to the way it was structured.

The fund used an independent panel for making the decisions, businesses were able to engage an independent business adviser to assist with developing a viable business plan and funding was staged paid out when the businesses reached set milestones.

The funding was directly linked to job creation with funds as capital to develop the capacity for the new jobs.

“Capital upfront is important to creating the capacity for job creation,” he said.

“You can’t increase production without developing the infrastructure.”

Interested business leaders gathered at the Gloucester Country Club for the first information session about the AGL Gloucester Independent Legacy Fund in 2016.

 He explained how the flow on effect benefits the whole Gloucester community with the local spend increasing with more employment people are able to spend more in town, as well as, the jobs bringing new people into the community which brings more money into town.

”A boost to local spending by the expansion of the companies that received funding grants of over $1.1 million every year,” he said.

“As well as an increased local spend by the new jobs creates a further $690,000 per year.”

Mr Hildsen said that AGL’s one time investment of $2 million dollars has created an annual increase of over $4.5 million in sales income from outside of Gloucester into the local economy.

Aside from the 71 new jobs created, he said Gloucester will have an increased wage bill of over $3.1 million per year, saving around $350,000 in welfare benefits. 

“The saving is from 20 percent of the new jobs filled by people on benefits prior, together with increased PAYG receipts of at least $320,000 every year.”

Mr Hilsden said this type of funding program could benefit many regional communities and additional funding in Gloucester could still be utilised. 

“Many local applicants missed out on the funding that could still have merit if funding on this basis continued for the Gloucester business community,” he concluded.