Kim Carr, Federal Minister for Innovation, Industry, Science and Research has just announced in his talk to the National Press Club that the Federal Government will be making AUD$83 Million in new funding available for around 20 approved local Venture Capital firms.

The new fund will be called the Innovation Investment Follow-on Fund.

It’s a good proactive step from the Government and recognises the effect that the current economic conditions are having on the ability of VC firms to raise funds and the subsequent flow on effect that has on the development of innovative technologies and businesses in Australia.

It was also good to hear the Minister speak of ICT in the same breath as sexier innovation areas like bio-tech and clean-tech.

There’s no more detail than that available at  the moment, but if anything dramatic happens we’ll provide updates.

While this is definitely a good step in the right direction there are a couple of notable issues.

$83 Million is not a large amount of money to spread across a couple of funds, let alone 20-odd. Also, the name suggests that the funds may go to recipients of the Innovation Industry Fund (IIF) which, as we discussed with local VC Mike Zimmerman in a recent interview, has the problem of being focused on developing new VC firms, not propping up existing ones.

The Minister also mentioned that a formal response to the Cutler Report and more initiatives will be announced around budget time, so hopefully there’ll be more good news to report in the near future.