South Australian manufacturing lands $155m from Commonwealth in a week

Denham Sadler
National Affairs Editor

The federal government has tipped $155 million into South Australian manufacturing this month alone in the lead-up to the state election, with all three of the large Commonwealth manufacturing grants announced so far going towards projects in the state.

The Coalition announced on Wednesday that it had awarded a $22 million grant to a sovereign combat systems centre led by Saab in South Australia through its $1.3 billion Modern Manufacturing Initiative.

It’s the third of the large collaboration stream grants in the scheme to have been awarded to South Australia in the last week, with all of the $155 million dished out through this stream going towards the state so far. The South Australian election is on 19 March, with Liberal Premier Steven Marshall at risk of leading a one-term government.

Steven Marshall
South Australia Premier Steven Marshall

The Opposition has previously raised concerns that rorts had been “baked in” to the $1.3 billion Modern Manufacturing Initiative due to the timeline of their delivery of Prime Minister Scott Morrison having final sign off on them.

The latest grant is worth $22 million for Saab’s Sovereign Combat System Collaboration Centre, which will bring together small and medium businesses with “unique capabilities to create vital combat systems”.

The centre will be based in South Australia and will have $75 million in funding in total, with the state government and industry making up the difference, according to program guidelines.

The federal funding comes in the form of a grant from the Collaboration Stream of the Modern Manufacturing Initiative, the largest grants available under the  scheme.

Grants of between $20 million and $200 million are on offer for large-scale manufacturing projects that have business-to-business collaboration or business-to-research collaboration at their core, and can cover up to 33 per cent of a project.

Applications for the stream opened in August last year and closed just a month later, meaning they have been under consideration by the government for nearly six months.

With the South Australian election imminent, the Coalition has now unveiled three of these grants based in the state in the last week alone. Each of the press releases announcing the grants have featured Senator for South Australia Simon Birmingham and South Australian Premier Steven Marshall.

The latest grant will go towards the construction of the “home of Australia’s sovereign combat system capabilities in SA”, and will also power “continuous shipbuilding initiatives”.

Industry minister Angus Taylor said it will also ensure Australia’s combat systems are integrated with technology and address critical industry skills shortages, creating more than 950 jobs by 2027.

“Our government knows that strong national security and economic security go hand in hand. We are committed to building a strong, sustainable and innovative local naval shipbuilding industry, and this centre will ensure our small and medium manufacturers can continue to be a crucial part while helping employ more Australians,” Mr Taylor said.

“We want more Australian business to contribute to local and international defence supply chains, and more Australian innovation and intellectual property to be contributed to products supplied to the Australian Defence Force and other markets.

“This investment with Saab will enable us to leverage our highly-skilled workforce and world-leading innovation and manufacturing might to strengthen our combat system capabilities on home soil and unlock new opportunities in some of the world’s most advanced supply chains.”

Mr Marshall welcomed the investment and touted South Australia’s defence industry credentials.

“South Australia’s defence sector is already creating thousands of jobs in our state and will continue to for decades to come – helping to build a strong future and opening new opportunities for our kids and grandkids to have rewarding jobs right here in SA,” Mr Marshall said.

It was revealed at Senate Estimates last month that only $85 million had been dished out from the $1.3 billion manufacturing grants scheme at the time, with $292 million executed. This is despite Industry budgeting for $550 million during this time.

Three larger grants totalling $155 millions have since been unveiled by the federal government.

The first was a $113 million grant for the establishment of three plant protein manufacturing hubs in South Australia.

The second grant, announced last week, will see $20 million going towards the Australian Space Park in Adelaide, with the project being led by Fleet Space Technologies and the South Australian government.

Do you know more? Contact James Riley via Email.

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