The Allan Labor Government's $2 billion venture capital fund, Breakthrough Victoria, required $175 million in extra funding to continue operating in the 2023-24 financial year, with $41.85 million being from a 'Treasurer's Advance'.
This extra funding was over and above the $200 million already allocated to operate Breakthrough Victoria for the 2023-24 financial year.
A Treasurer's Advance mechanism acts like a credit card for emergency payments, such as supporting a community hit by floods or bushfire. However, in the State Parliament's Public Accounts and Estimates Committee (PAEC) inquiry, department officials confirmed the need for an emergency credit card top up of funds to provide certainty for Breakthrough Victoria's operations, calling into question the financial competence of this state-owned company.
This comes as the Breakthrough Victoria fund reported a $3 million loss in its 2023-24 Annual Report, spending millions on consultants and executive payouts.
The fund is yet to announce a new CEO after the last CEO quit more than three months ago, and five directors also departed the beleaguered company that is chaired by former Labor Premier, John Brumby, which has Labor's Treasurer, Tim Pallas, as the sole shareholder.
Furthermore, Breakthrough Victoria's investment strategy is under fire as one its major investments, Seer Medical, suffered financial distress and has withdrawn its products from the Australian and US markets. Now, one of Seer Medical's founders is taking legal action against Breakthrough Victoria, with the Allan government refusing to confirm how much this will cost taxpayers in legal fees.
Shadow Minister for Industry and Innovation, Bridget Vallence, said: "It is troubling that Breakthrough Victoria, after a few short years, is relying on credit card top ups to operate.
"The Allan Labor Government gambled $2 billion of Victorian taxpayers' money running its own venture capital fund which is now in financial disarray, with no CEO and no return on investments.
"Labor cannot manage money, cannot manage this venture capital fund, and Victorians are paying the price."
