This funding cut comes only five months after the government announced its vision to double local digital content production over the next decade.

The Australian Interactive Media Industry Association (AIMIA) has received written confirmation from Austrade that funding for its TradeStart digital media export program had been cut by 50 percent with the funds reallocated to other industry sectors.

This will result in the closure of AIMIA's Queensland office, currently servicing export clients in South Australia, Western Australia, the Northern Territory, and Queensland. Delivery of export services nationally will now be consolidated to a single Sydney office with half the number of staff and funding.

The move has come as a surprise as the Minister for IT and Communications Senator Helen Coonan launched the Digital Content Industry Action Report Agenda, Unlocking the Potential, in March this year.

The launch aimed to provide "exciting industry development opportunities" for Australia's Digital Content Industry which employs about 300,000 people and contributes A$21 billion (US$16 billion) annually to the economy.