Prime Minister Tony Abbott and Treasurer Joe Hockey over the last few weeks have repeatedly told the Australian public that the heavy burden of repairing the nation's finances was a collective job. On Tuesday night, it became clear that the local video games industry would play its part, with the $10 million remaining in the Australian Interactive Games Fund to be "redirected by the Government to repair the Budget and fund policy priorities".

Overseen by Screen Australia, which is also losing over $5 million in funding from 2014-15 alone, the fund has helped kickstart local development through its Games Production and Games Enterprise rounds.

Games backed through the fund included the casual iOS/Mac building simulator TownCraft, the browser-based strategy Blight of the Immortals, the twin-stick bullet hell shooter Assault Android Cactus, spaceship builder Defect: Spaceship Destruction Kit, the educational Knowledge Quest Mobile and the endless runner Animal Dash.

While the Games Production helped fund individual projects, the Games Enterprise grants helped companies with limited access to capital to expand their business, fund on-going projects and become more sustainable. As of June 18 last year, from the last round of Enterprise funding, companies supported by the AIGF included Queensland developer Defiant Development, the Sydney-based Soap Creative, South Australia's ODD Games, and a string of Victorian studios including Twiitch, Torus Games, Tin Man Games, The Voxel Agents, Wicked Witch Software and Tantalus Media.

A post yesterday on the AIGF Facebook page has confirmed that there will be one last funding round for individual projects through the Games Production program for any applications received or postmarked before Tuesday. No final Enterprise grants to be awarded.

Understandably, the news has hit companies and developers quite hard. Loveshack director Joshua Boggs, makers of the narrative-driven puzzler Framed, a government-supported game, angrily told Kotaku that the government had listened "to reason" by closing "a funding scheme that would make you money in the next year". Antony Reed, chief executive of the Game Developers' Association of Australia, said via press release that the Government's decision came "with absolutely no consultation".

"We made numerous attempts to contact the Attorney General's office in the months leading up to last night's announcement, including providing economic data and highlighting the successes the Australian game development sector has had on the global market. We have yet to receive a single response," Reed added.

Other developers have responded through social media or via email to the Federal Government's decision. Here's what they had to say.

Morgan Lean, owner of Epiphany Games, makers of Frozen Hearth, said on Facebook:

I would like to thank all the people who participated from both industry and government in establishing and running the program. It's very sad to see this current government's lack of vision cause a fledgling program, which was well-designed to help our industry, removed before it could prove itself. The program was not expensive and if you look at some of the companies (sic) GDP and Employment surely would have benefited even in a small way.

Ben Britten, tech director for Tin Man Games:

Tin Man is being funded under the Enterprise program for three years. July [when the AIGF will shut down] will be the end of the first year. It is my current understanding that because we have already been budgeted we will continue to be funded for the rest of the time as per the original deal, so specifically for Tin Man Games, we should be OK in terms of immediate short term impact.

We went from a two man team to five and a half full time employees in addition to a handful of contractors for individual projects. As a direct result of this funding we have increased our productivity and released ten games.

[The fund's closing] is probably the biggest thing for our crew. We are located at The Arcade in Melbourne and share a large office space with a dozen other indie companies, many of which have been directly impacted by the funding cuts and they don't know what they are going to do. It has been a pretty rough day.

I can't really express how short sighted and uninformed this decision seems to me. We are one of the few industries that brings in most of our sales from exports so we are actively bringing money into the economy. This fund was hugely instrumental in helping to build sustainable locally owned intellectual properties.

Without local funding sources we have to go abroad for financial backing, but the global investors are not really interested in growing Australian companies, they are more interested in owning the properties and taking the profits out of Australia. The government is saving $10 million now at the cost of hundreds of millions to the economy down the road. It seems like the entire budget is similarly short sighted. So many short term gains that will cost us all ten fold in the future.

Morgan Jaffit, director of Defiant Development and an external assessor for Screen Australia, responded on Facebook:

The Interactive Games Fund was a triumph. The people who worked to make it happen, inside the GDAA and inside Screen Australia (and other organisations) brought a genuine change to the Australian development community at a time when it was desperately needed. It was a bold move, at exactly the right point.

[United States] publishers pulled their interests out of Australia, leaving a huge number of talented developers with no jobs. The Games Fund allowed those developers to create IP, start businesses, and build an Australian game culture that was locally owned and locally built.

It lead to games like Framed, which has won an [Independent Games Festival] Award for Excellence in Design (pretty much an Oscar for games). It lead to games like Armello, which just raised $300k on Kickstarter. It lead to companies like Uppercut and Defiant. It lead to a new wave of game development in Australia, supported by events like Freeplay, GCAP, and PAX.

It helped to create a sense of family in the Australian game industry that is carrying us forward today.

The fund is gone.

The fruits of that fund remain. The people responsible for the fund have a lot to be proud of. Australian dev will carry on, although the road just got harder.

Leigh and Rohan Harris, directors and founders of Flat Earth Games, makers of TownCraft:

Leigh Harris: When we completed the iPad version of TownCraft, sales were great, but not enough to pay for both of us full time. The grant money was used to get the game on iPhone and Mac, as well as to hire an agency to give us a proper marketing push in the States which we never would've been able to afford on our own. Now that the game's out on those platforms and has decent overseas press coverage, we are a self-sustaining business with a second game on the way who are looking only to grow from here.

Rohan Harris: So I guess we're a prime example of the way grants like this can help grow an industry. We're awash with talent, new and old, in Australia, but since the collapse of the majority of larger studios a few years ago, we've had to re-emerge as a group of smaller teams working on smaller games - to become a nation of indies. But indie startups can often need help finding their feet. The grant was perfect for that, for us, and I feel almost guilty that future indies coming out of game design colleges and the like won't be able to get support in the way we have.

Our current project involves producing a brand new game engine, and the ultimate outcome of this engine was going to be a game set in Sydney in 1931. It would be quite a niche project, sure, hence needing grant money to work on it, but it's a project we really want to see happen. Australia is almost never culturally shown in video games, and that's something which the AIGF was able to help correct.

With the fund gone, the chance of us being able to pull off a truly Australian game is much slimmer, given how much that might limit it its international appeal and, hence, its potential for generating revenue.

Leigh: The commercial reality of making games means that we'll have to make games which are the most likely to make us enough money that we can continue to support ourselves. But when you consider the possibility of opening your ideas up to games which, while they may have a more limited audience, could be supported by the government by virtue of being interesting pieces of Australiana, it does limit things somewhat. We may yet make a game of the same genre using the same engine we've developed, but for the sake of capturing a larger audience we'd now be more likely to pick San Francisco, Chicago or New York.

Rohan: The worst part is seeing our colleagues who weren't in quite the same fortunate position as us being so distraught over it. Never mind the talented, dedicated people who worked so hard to get this fund put in place, only to have killed before it even had a chance to show its real value. The depression is infectious. The feeling around the industry right now is anything but positive. There's already talk amongst some indies we know of up and moving to somewhere more conducive to creative industries like ours.

Sanatana Mishra, co-founder of Witch Beam, makers of Assault Android Cactus:

We feel absolutely gutted and worried about the future of our local industry, it's crushing to see other developers with new exciting projects have these opportunities disappear and we just hope there isn't another mass developer exodus as there was the big studios closed down a few years back.

The grant we received was enough to keep two team members focused on full time development and a third member on part time, we're confident that sales of Cactus will allow us to remain employed without further funding but we never would have made it this far without our production grant.

Some of our concepts are for larger and more ambitious games that would have made sense with an AIGF investment but that option doesn't exist anymore.

Alex Walker is the regular gaming columnist for ABC Tech + Games. You can follow him on Twitter at @thedippaeffect.