‘Shameful’ grants record adds to manufacturing delay

Joseph Brookes
Senior Reporter

A year after Australian manufacturers applied for large COVID-19 recovery grants worth $800 million, the official go-ahead has been given, with an internal review clearing all the previous government’s funding decisions.

Assistant manufacturing minister Tim Ayres on Friday defended the internal review, saying the Morrison government’s “shameful” history of grants expenditure warranted a closer look at the decisions, many of which were made in the election run up by the former prime minister at a rate of nearly one each day.

“I can’t imagine how much stress the long delays in the delivery and announcement of this grants program has created for manufacturing firms who have made these applications. Australian manufacturing needs good stable government that makes decisions on the basis of the public interest,” Mr Ayres said.

Assistant minister for manufacturing and trade Tim Ayres

The new government’s internal review of its predecessor’s grant decisions meant many recipients were waiting a further five months for confirmation the election eve commitments would be honored after originally applying in August last year.

The Modern Manufacturing Strategy was launched by the Coalition government in October 2020 to provide $1.5 billion of support to key sectors like defence, space, energy and critical minerals processing.

The largest part of the scheme was a $1.3 billion grants program known as the Modern Manufacturing Initiative (MMI), with the biggest grants of up to $200 million in a “collaboration stream” for manufacturers partnering on large projects.

The guidelines of the collaboration stream included a highly unusual provision for the prime minister to be the ultimate decision-maker on the large grants, sparking fears of another pork barrelling scandal when revealed last year in the wake of the sports rorts affair.

Collaboration stream applicants were given less than a month to apply for the grants in August last year, but successful applicants were not announced until the eve of the election.

Labor was highly critical of the scheme’s structure, timings and transparency, accusing the Coalition of using the program as an “election slush fund” in March and later claiming more than $600 million in MMI announcements were being used to try “manufacture an electoral win”.

“What Scott Morrison and the previous government did was announce this round of funding and delay and delay and delay until just on the eve of the federal electionand then [they] made a series of announcements,” Mr Ayres said Friday.

Mr Morrison has defended his involvement in the process and the timeline, saying wide consultation and scrutiny was needed for the large grants.

Earlier in the day, Industry minister Ed Husic announced the conclusion of the internal review of the MMI he ordered in June.

The review confirmed that from March 1 to May 17 2022, 68 grants were announced under the MMI program – nearly one every day and often at press events in either Coalition held or targeted electorates.

Another 400 applicants to the MMI were never informed by the former government that they had been unsuccessful, a task left to Labor.

But the review confirmed the announced grants were all supported by an independent assessment committee and the processes adhered to the publicly available grant opportunity guidelines.

Despite none of the decisions being overturned, the review and the further delay it caused was justified, Mr Ayres said.

“It’s the right thing to do, for the Albanese government to take… eight to 12 weeks to review these grants carefully, because the history and the track record of the Morison government on grants expenditure has been shameful. It’s taken away the trust that Australian should have in the government, and it’s the right thing for us to do to just be careful and prudent about this.”

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