The Australian Private Equity and Venture Capital Association says the government’s Innovation Investment Fund should continue as it has been successful in funding new businesses such as job site Seek.com and bio-technology company Pharmaxis.

The Gillard government has announced a new commitment to fund as much as $100 million for venture capital investments. This amount of money must be matched by the private sector. But the Innovation Investment Fund, developed by the Howard government, is scheduled to end after this final tranche of money.

“The venture capital industry is a really important component in the development of knowledge-based industries,” says Katherine Woodthorpe, chief executive of the Australian Private Equity and Venture Capital Association.

“It is not absolutely sustainable on its own,” she says, adding the government of Israel, the U.K. and the U.S. support their venture capital industries.

Between 1997 and 2010 the Australian government’s Innovation Investment Fund helped five funds raise $197 million. These funds made almost two times their money from their investments by distributing $362 million to investors including the government.

Since 1997 $524 million in government and private capital has invested in more than 100 promising, early-stage Australian companies.

“Some form of the program should continue,” says Woodthorpe.