Manufacturing a key election issue as govt fast-tracks $280 million in grants

Denham Sadler
National Affairs Editor

The second round of the federal government’s manufacturing grants program will be brought forward, with companies given only one month over the summer holiday period to apply before the winners are announced before the upcoming election.

Industry minister Angus Taylor announced on Thursday that round two of the Integration and Translation streams of the $1.3 billion Modern Manufacturing Initiative will be worth $280 million and will open next week.

The grants will be open to all six of the manufacturing priority areas: resources tech and critical minerals processing, food and beverage, medical products, recycling and clean energy, defence and space.

Industry minister Angus Taylor – Image: Crawford Forum

The government has said that the second round of funding has been brought forward to help with Australia’s economic recovery from the pandemic and to address growing concerns over supply chain resilience and sovereignty.

“Our manufacturing sector is going from strength to strength, with more than a million Australians employed in manufacturing and strong confidence in the future of the sector,” Mr Taylor said in a statement.

“We know our manufacturers will lead the charge when it comes to our economic recovery from the pandemic – and that’s why we’re investing in them to help secure our future. This matched funding will help businesses turn innovative research and ideas into reality, as well as unlocking new opportunities and investment both here at home and for overseas export.

The translation stream of the manufacturing fund is aimed at manufacturers looking to translate research and ideas into commercial outcomes. The integration stream is for companies to access domestic and global supply chains and produce and distribute quality products and services in new markets.

The space, resources and medical products tranches will open for applications from 13 December, while the remaining three sectors will open on 17 December.

Applications for all six sectors will close on 14 January, leaving companies just a month to prepare an application over the summer holiday period.

With applications closing in mid-January, the $280 million in funding will be rolled out and announced in the lead-up to the next federal election, likely to be held in May 2022.

Applications for the first round of the collaboration stream of the Modern Manufacturing Initiative closed in September, with assessments expected to take 19 weeks, meaning the successful applicants will also likely be announced before the election.

The Opposition has claimed the government has “baked-in” rorts to the scheme after it was revealed that Prime Minister Scott Morrison will have the final say on who receives funding under the program.

Industry, Innovation and Science Australia will review applications and make recommendations to the industry minister, who will then recommend the funding to the Prime Minister.

The government has subsequently rejected a Senate order to release the departmental briefing documents related to the manufacturing fund.

Support for modern manufacturing is set to be a key election issue, with the government positioning it as core to Australia’s economic recovery from COVID-19.

The Opposition will also be placing it front and centre, with the pledge of a $15 billion Reconstruction Fund.

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