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Client Alert Government Grants in FY25As we embark on a new financial year, it’s crucial to take a strategic approach to understanding the government grants landscape.
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Client Alert Consultation on foreign resident CGT rules commencesTreasury is taking steps to ensure fairer tax treatment for foreign resident investors by tightening Australia's foreign resident Capital Gains Tax (CGT) regime. Proposed changes aim to broaden the CGT base and enhance integrity, impacting infrastructure, energy, agriculture, and more.
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Insight Australian wine export strategies post-China tariff removalFollowing the recent removal of tariffs on Australian wine by China, the industry is keen to rebuild relations and explore the right export markets. This presents Australian wine producers with a chance to reassess their position in the global market.
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Insight Identify your opportunities in the complex landscape of fuel tax creditsThe landscape of fuel tax credits (FTC) is constantly evolving due to ongoing economic and technological developments. This dynamic environment presents both challenges and opportunities for businesses with significant fuel consumption.
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Transformation through energy transition
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Navigating the complexities of the grants landscape can be overwhelming, and distracting from your core business, so leave it with us so you can focus on what you do best.
Navigating headwinds
With several elections on the horizon, both at the state and federal levels, at minimum we will see grant programs stall in line with caretaker periods. Should there be a change in government, the period of disruption may extend. This is a real possibility in the Queensland grants jurisdiction.
Broader economic volatility and contraction are already impacting, and will continue to impact, the availability of grants and how the government chooses to support industry (think equity and debt investment or production tax rebates over traditional non-dilutive grant funding).
Impact of political cycles
Upcoming elections in key states such as Queensland, scheduled for October 2024, and Western Australia, scheduled for March 2025, will impact the availability of grant funding at the state level. This is especially significant in FY25 as both Queensland and Western Australia are states with healthy budget positions, having generally strong and broad grant regimes.
These elections, coupled with a clear, but highly targeted industry support strategy from the federal government (clean energy transition) will continue to shape the availability and focus of grant programs.
The federal election, expected by May 2025, will pause grant programs at this level. This will impact already highly subscribed, multi-stage programs, like the Industry Growth Program (noting that the grant stream of the Industry Growth Program only opened in May 2024).
The net effect of this will be continued increase in competition in the grant funding space, exacerbated by pent-up demand from industry, likely resulting in longer application assessment times and perhaps temporary program closures as we have seen in Queensland (Industry Partnership Program), and more recently in Western Australia (WA Investment Attraction Fund).
Of course there is also the US election in November, and it remains to be seen what impact a Trump victory could have on the Future Made in Australia plans, part of which hinge on exporting Australian value-added critical mineral to allies such as the United States.
Economic climate and impact
The current economic climate, characterised by an inflationary environment and post-COVID budget deficits, has prompted some state governments, such as Victoria, to scale back legacy industry support programs. While New South Wales has reopened grants following the 2023 change of government, the state no longer has the breadth of programs it once did. Assessment times on its new Net Zero Manufacturing Initiative program were well over those publicised in the guidelines, and those moving from Expression of Interest to Detailed Application stage will agree – things are moving suspiciously slowly.
The impact of reduced state budgets is particularly evident in the “traditional” manufacturing grant space, where funding has been significantly curtailed. The focus on immediate economic relief measures means limited budget allocations to grant funding, again making the landscape more competitive and challenging for businesses seeking funding – particularly SME manufactures operating outside the National Reconstruction Fund priority industry sectors.
Opportunities amidst challenges
Despite these challenges, governments at all levels continue to seek similar benefits from grant supported projects, with funding supporting capital expenditure, high-skilled job creation, skills investment, positive economic outcomes and of course clean energy market development. A notable trend is the increasing emphasis on environmental and ESG impacts – with the ‘S’ of ESG also growing in focus. Take the Federal Government’s new Future Made in Australia Community Investment Principles as an example of this shift.
How Can Grant Thornton Help?
At Grant Thornton, we support small, mid-sized, and large businesses with comprehensive government grant assistance. We help you identify, plan for, and apply to grant programs that align with your business growth strategy. If you are an innovative business with upcoming investment projects, there are likely grant opportunities available for you, especially if you operate in priority sectors such as agriculture, defence, energy, food & beverage, health, medtech and life sciences, mining, renewables and low emissions technologies, resources and critical minerals, or space. We can design a dedicated grant strategy to help you stay competitive and grow!
Read on for more key government grant programs to watch in FY25.
With a clear focus on the Future Made in Australia mission, grant programs will focus on priority industry sectors, namely:
- Net Zero Transformation: Renewable Hydrogen, Green Metals, and Low Carbon Liquid Fuels.
- Economic Resilience and Security: Critical Minerals Processing and Refining, and Manufacturing Clean Energy Technologies.
Other industry sectors identified for the National Reconstruction Fund include: value-add in resources; value-add in agriculture, forestry and fisheries; transport; medical science; renewables and low emission technologies; defence and enabling capabilities.
Key grant and investment programs to look out for:
- Australian Renewable Energy Agency (ARENA) grant programs, which include:
- Grant programs to support core investments in renewable and clean energy technologies, including continuation of the Hydrogen Headstart program (open).
- New Future Made in Australia Innovation Fund, supporting innovation, commercialisation, pilot and demonstration projects and early stage development in priority sectors (pending).
- New Solar Sunshot program, supporting the development of solar manufacturing capabilities. Likely production incentive, rather than capex grant (pending).
- New Battery Breakthrough Initiative, supporting the development of battery manufacturing capabilities. Likely production incentive, rather than capex grant (pending).
- the Solar Scaleup Challenge, a collaborative challenge administered by Greenhouse and ARENA, to support breakthrough solar PV innovations.
- Industry Growth Program, supporting small and medium-sized businesses with commercialise or grow innovative new products, services and processes. Advisory services, before recommendation into the grant program, which could offer up to $5m in grant funding (open, highly subscribed).
- National Reconstruction Fund, supporting large-scale advanced manufacturing in key priority sectors, offering loans, equity investment and guarantees (no grants).
- Critical Minerals Facility and Northern Australia Infrastructure Facility, supporting strategic critical minerals investments through debt/equity arrangements (no grants).
- Defence Industry Development Grants Program, supporting small and medium-sized enterprises to access grants to build Australia’s sovereign capability, global competitiveness, technical superiority and national security (open, assessed in rolling batches across the year).
- Thriving Suburbs Program, supporting not-for-profit organisations and local government agencies or bodies by providing funding to construct or upgrade community-focused infrastructure. Grants of $500,000 to $15 million available, covering 50% or more of eligible expenditure. The program will run for three years to FY27.
The R&D Tax Incentive program continues to help companies to innovate and grow, by offsetting their costs of eligible research and development (industry agnostic).
New hydrogen and critical minerals production tax incentive programs were also flagged in the 2024-25 Budget and are undergoing design (public consultation closed in July 2024).
Next election: The next election is due by September 2025, but expected by the end of May. Expect a pause on grant programs for at least 2-3 months on either side of the election period.
For the 2024-2025 year, Victoria has reprioritised budgetary allocations from grant programs to other initiatives. Government funding support for mid-sized businesses will likely be challenging, and businesses may need to consider other non-capex based funding options for their projects.
Key grant and investment programs to look out for:
- Funding through Breakthrough Victoria, who are investing in highly innovative companies and projects in advanced manufacturing, agri-food, clean economy, digital technologies, health and life sciences. Investment equity arrangements (no grants). The state budget reduced funding for Breakthrough Victoria by an average of $90 million a year over the next four years, and the fund’s investment profile extended from 10 to 15 years. This reduced funding will result in higher competition and stringent analysis of proposals.
- Funding through LaunchVic, continuing to support Victoria’s future innovators, creators and entrepreneurs. These could include grants and other accelerator-type program support.
- Funding to support workforce skills development through vocational training, free TAFE and other skills based training arrangements.
- Potential funding to support large-scale tourism and events projects.
- Discretionary funding to support meritorious projects on a case-by-case basis.
Next election: November 2026.
With a significant focus on cost of living and other committed funding in the recent 2024-2025 Budget, there are no notable new grant funding programs announced for the coming financial year.
Key grant and investment programs to look out for:
- Net Zero Manufacturing Initiative, the state’s flagship manufacturing program targeting the development of low emissions technologies. The first funding round has closed, with assessment of expressions of interests ongoing. No noted future funding rounds publicised.
- Innovation programs, such as the Minimum Viable Product (MVP) Ventures program, supporting startups and innovative SMEs to commercialise highly innovative and new products (open).
- Potential discretionary funding through Invest NSW, for projects of significance on a case-by-case basis. Particularly projects involving significant capital equipment investment, high skills jobs creation, and in a regional-based location.
Next election: March 2027.
Queensland has several interesting industry grant programs on offer. However, with the state election upcoming in October 2024, assessment of these programs may be delayed. If there is a change in government, there is uncertainty about timing of new grant programs.
Key grant and investment programs to look out for:
- Make it in Queensland, additional $25m to continue:
- Made in Queensland, additional $20m in Round 7 supporting small and medium sized manufacturers to increase international competitiveness, productivity and innovation via the adoption of new technologies, systems and processes, and to generate high-skilled jobs for the future (pending, likely August or September opening).
- Manufacturing Hubs Grant Program, additional $5m in Round 4 to assist regional small to medium sized manufacturers to become productive, build their advanced manufacturing capabilities and create the jobs of the future (pending).
- Regional Economic Futures Fund, a $200m program to support communities in seizing industry development opportunities presented by global decarbonization (open).
- Recycling and Jobs Fund, to support resource recovery infrastructure to increase resource recovery rates, facilitate organics recycling and progress the South-East Queensland region towards a circular economy (open).
- Quantum technologies grant funding programs to support the implementation of the Queensland Quantum and Advanced Technologies Strategy (closing July 2024).
- Critical Minerals and Battery Technology Fund, investing and supporting projects focused on critical minerals, battery technology and advanced materials manufacturing through grants and debt/equity investments (open).
Next election: October 2024. Expect a pause on grant programs for at least 2-3 months on either side of the election period.
With the next election upcoming in March 2025, Western Australia is strategically tightening up its grant funding programs and refocusing to other initiatives.
Key grant and investment programs to look out for:
- Investment Attraction Fund, supporting projects that encourage new investment in Western Australia that will create local jobs and contribute to a more diversified economy. While the New Energies Industry Funding stream has been paused due to oversubscription, there are continuing allocations in the 2024-2025 budget for this program (paused).
- Collie Industrial Transition Fund, supporting projects in green manufacturing or minerals processing; energy intensive industries and future clean energy industries (open).
- Clean Energy Future Fund, supporting innovative clean energy projects that offer significant, cost-effective reduction in emissions and significant community benefits (closed, two new rounds pending).
- Lower Carbon Grants, supporting large scale, transformational research and innovation activity that support practical and effective decarbonisation solutions (closed, monitor for new rounds)
- Other innovation grants (funding allocated for FY25) supporting the innovation ecosystem in Western Australia.
- Funding supporting skills development, including clean energy skills training opportunities at TAFE.
Next election: March 2025. Expect a pause on grant programs for at least 2-3 months on either side of the election period.
South Australia’s budget is in surplus for 2024-2025, and offers some grant programs that may be of interest, particularly for defence projects.
Key grant programs to look out for:
- Economic Recovery Fund: Round 2 will support small businesses and not for profit organisations to invest in energy efficient equipment or improvements, offering grants up to $50,000 (opening August 2024). Discretionary funding may also be available for projects that support high-skilled jobs creation, improve productivity, increase exports and support innovative, value-adding technologies in South Australia.
- Defence programs, including industry-research programs such as the Defence Activator Fund (open, closing 15 August 2024) , and the Collaborative Research Fund (open, closing 6 September 2024) supporting targeted defence projects and technologies.
- Net Zero Agriculture program, supporting innovation, on-farm solutions and upskilling of the agricultural sector to reduce emissions through low emission intensity farming systems.
- Tourism and business events programs
- Investment attraction programs, accessed through discretionary funding from the state’s investment department, for projects seeking to establish operations in South Australia and focused on economic growth and export uplift.
Next election: March 2026.
Connect with Simone Barker on LinkedIn to keep on top of the evolving grants landscape.
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