Vic Budget backs in local firms with new manufacturing, R&D funds

Justin Hendry

The Victorian government will establish two new funds to issue more than $35 million in grants and other funding, including one that will assist local firms to access the federal government’s $15 billion National Reconstruction Fund.

The 2023 Victorian Budget, unveiled by Treasurer Tim Pallas on Tuesday afternoon, includes $36.2 million for the two funds, as well as more than $30 million in other industry support, including $10 million for games developers.

New investments include $21.2 million over the next two years to establish a Manufacturing and Industry Sovereignty Fund to “support the development, expansion and retention of strategic sovereign manufacturing capability in Victoria”.

Victorian Parliament

The funding will also be used to support local businesses to access the $15 billion National Reconstruction Fund. Legislation for the national fund passed federal Parliament in March and ministers are now working to develop an investment mandate that will be used by the NRF Board.

A separate $15 million Industry R&D Infrastructure Fund will also be set up this year to “incentivise and leverage private industry investment in research and development and complement existing incentive settings such as the Commonwealth’s R&D tax incentive”, Budget documents reveal.

“This Budget continues to back Victoria’s businesses to innovation and grow. We’re establishing a new Industry R&D Infrastructure Fund and a Manufacturing and Industry Sovereignty Fund – creating partnerships to help businesses grow,” Treasurer Tim Pallas said in his Budget speech.

Both “Made in Victoria” funds will be administered by the Department of Jobs, Skills, Industry and Regions’, while an additional $5 million will also be provided to the department for an expansion of the Alice Anderson Fund, which “supports women-led startups to leverage private sector capital”.

The state Industry department will also be provided with $4 million over the next two years to “support Victoria’s defence and space industry and supply chains to secure major defence contracts”.

Within the department, mRNA Victoria will receive $12 million to “continue to support the delivery of major sovereign mRNA manufacturing facilities in the state”. The entity was established last year to distribute $50 million in initial grants through the mRNA Victoria Activation Program.

The Budget also contains $10 million in 2023-24 for a digital games and visual effects rebate that will be used to “attract more digital and visual effects business to Victoria”. The one-year funding measure almost matches that of the federal government four-year measure in the federal Budget.

Following a $40 million investment to attract new businesses to Victoria through the International Investment Attraction Fund last year, the 2023 Budget will provide another $20 million to continue the fund.

The government will also fund six new Tech Schools in Frankston, Hume, Warrnambool, Dandenong, Brimbank and Wangaratta, bringing the total number across the state to 16, and establish a Clean Energy Equipment Fund for new and existing Tech Schools at a cost of $84.3 million.

A further $1 billion will be set aside to re-establish the State Electricity Commission (SEC), which delivers on the government’s election commitment last year. SEC, formerly the only electricity generator, distributor, retailer, and grid operator, was split up and privatised in the mid-1990s.

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