Govt review of Coalition’s manufacturing grants a ‘matter of priority’

Denham Sadler
National Affairs Editor

The new Labor government is reviewing the near-billion dollars in manufacturing grants dished out by the Coalition in the lead up to the election as a “matter of priority” to determine whether they represent value for money.

The previous Coalition announced funding for a range of manufacturing projects totaling nearly $1 billion from its Modern Manufacturing Initiative earlier this year, before the May election.

While the new government has said it will honour all contracts already signed under the scheme, the bulk of this funding has been announced, but contracts have not yet to be signed.

The Industry minister Ed Husic has previously labelled the Coalition’s manufacturing program an “election slush fund” and one that was created to “manufacture an electoral win”.

Industry and Science minister Ed Husic

Mr Husic has since launched a “value for money” review into all of the grants issued under the Coalition’s manufacturing program, and is “working closely with the department on the consideration of grants announced by the previous government in the lead up to the last election as a matter of priority”.

“The Minister is evaluating the assessment and decision-making processes surrounding manufacturing grants to ensure that they will deliver value for money for Australian taxpayers,” a spokesperson for Mr Husic told

“The government has announced the $15 billion National Reconstruction Fund (NRF), as the first step in its plan to rebuild Australia’s industrial base, build prosperity, boost regional economic development and create secure well-paid jobs. As part of the development of the NRF, the government is in the process of evaluating all existing grants programs.

“The government will honour existing contracts that have been executed by the previous government.”

Shadow Industry minister Sussan Ley went on the attack on Monday, issuing a press release claiming that Australian manufacturing firms are still “in the dark” over whether their grants will be honoured and that a billion dollars in contracts is “at risk of being torn up”.

“We are talking about boosting sovereign manufacturing capability on everything from defence, to vaccination, to food security and construction – every day Labor refuses to confirm funding certainty for these nationally significant projects is a day Australia falls behind the rest of the world,” Ms Ley said in a statement.

“This indecision is putting tens of thousands of jobs at risk, threatening investment certainty, threatening productivity and jeopardising the Australian government’s reputation as a stable partner to do business with.”

Labor plans to imminently launched its own $15 billion National Reconstruction Fund, with unallocated funds from the Coalition’s Modern Manufacturing Initiative (MMI) to be “reprioritised”.

The MMI provided co-investment grants to manufacturing companies spanning defence, space and national security, recycling and clean energy, food security and processing and medical products.

Labor accused the Coalition of deliberately delaying grants to time them with state and federal elections this year.

While the Prime Minister had final sign off with the MMI grants, Labor’s fund will be modelled on the Clean Energy Finance Corporation, with an independent board, and will offer grants, equity and loans.

Do you know more? Contact James Riley via Email.

1 Comment
  1. aussiearnie 2 years ago

    “the Prime Minister had final sign off with the MMI grants”. And therein lies the problem…

    And for Susan – there is no contract to tear up when nothing has been signed, only announced.

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