With Federal and State Government grants for manufacturing companies ranging from $20,000 to $10m the effort put into applying for a grant can be well rewarded.
Tapping into the billions of dollars available in Federal and State Government Grant funding can appear daunting at first glance, but for the dedicated business owner or manager that has set their sights on business growth the pain is worth the gain.
There are numerous Federal and State Government grants and incentive schemes that can help Australian manufacturers. The following are just some of the many available:
R&D Tax Incentive is designed to encourage companies to engage in R&D in Australia. It has two core components:
- a 45% refundable tax offset (equivalent to a 150% deduction) to eligible entities with an aggregated turnover of less than $20m per annum
- a non-refundable 40% tax offset (equivalent to 133% deduction) to all other eligible entities.
Commercialisation Australia is available to organisations that are about to commercialise new products and services. It helps companies access:
- Skills and knowledge – up to $50,000 to access specialist advice and services.
- Experienced executives – up to $350,000 to engage a CEO or other senior executive.
- Proof of concept funding – $50,000 to $250,000 to prove the commercial viability of new Intellectual Property.
- Early stage commercialisation funding – $50,000 to $2m to take a new product, service or process to market.
Enterprise Connect aims to support SMEs transform and grow their businesses by helping them:
- Receive a free business review by a skilled business adviser.
- Access up to $20,000 funding to engage consultants to help improve business performance.
- Access up to $50,000 in dollar-for-dollar funding to help develop an idea with commercial potential.
- Connect with experts that can solve technology and knowledge issues for their business.
Clean Energy Future Plan provides competitive, merit based grants to help manufacturers improve energy and/or carbon efficiencies of their production processes, facilities and/or products.
It includes the recently announced $800m Clean Technology Investment Program and the $200m Clean Technology Food and Foundries Investment Program.
The key merit criteria assessed is the extent of the reduction in carbon emissions intensity, which includes reductions through improvements in energy efficiency arising from the grant project.
Grants range from $25,000 to over $10m, depending on eligibility criteria, and are provided on a co-contribution basis.
ICN (Industry Capability Network) is a not-for-profit organisation and offers Australian manufacturers and suppliers the opportunity to get involved with major new projects in Australia and overseas, with no cost to the business or its suppliers.
ICN’s database has 117 major projects on it at the moment, with contracts worth over $120bn in the system.
The projects range from resources through to defence and include the Olympic Dam expansion, the Air Warfare Destroyer program, and the substantial Chevron Gorgon project.
Manufacturing Skills Australia (MSA) is the national body responsible for workforce development in manufacturing and acts as a broker for many of the government’s funded initiatives. It works with companies to determine what their skill needs are, what options are available to address them, and how solutions can target manufacturing workforce issues.
The federal government has released a range of new initiatives under its ‘More Help for Mature Age Workers’ program that will help mature workers develop their skills.
Additional funds are available to provide gap training and help applicants complete full qualifications. There is also funding support available to train mature age workers in supervisory and mentoring skills and the government’s Australian Apprenticeships Mentoring Package to help foster mentoring relationships between young apprentices and older, more experienced workers.
MSA is able to assist companies to engage support from these government initiatives.
Export Finance and Insurance Corporation (EFIC) is the Federal Government’s export credit agency and provides finance and insurance solutions to help Australian exporters overcome the financial barriers they face when growing their businesses overseas.
The organisation can assist companies to secure finance for export trade when their bank is unable to provide all the support they need, and can work directly with exporters or with their banks to provide loans, guarantees, bonds and insurance products for large and small exporters.
Tips for applying for grants
Applying for a grant can be a daunting task for some businesses. Here are some tips to help:
Develop a Grant Funding Strategy – Different grants apply to different stages of the product development or business lifecycle. Proactively targeting government grants for different stages of your business may give you the leverage you need to finance product development and business transformation projects.
Get to know the agency that administers the grant – Most grants are merit based and highly competitive. Building a relationship with the Government agency helps you tailor your application and demonstrate how your project can help the agency meet its objectives – whether that’s increasing job numbers, transforming industry, or meeting carbon reduction targets.
Use a consultant to help you apply for grants, but be careful – Experienced consultants can help you to apply for a grant and navigate the process involved from start to finish. If you do choose to use a consultant, be sure to negotiate a fee structure that is appropriate for your organisation.
In 2009, Peter Birch, financial controller of J Smith & Sons, a Queensland truck manufacturing business, was pleasantly surprised when his application for an Enterprise Connect Business Review took less than 20 minutes to complete.
Within 24 hours his application had been approved and an Enterprise Connect Business Adviser commenced work on a strategic review of the business.
The company used the $20,000 of Enterprise Connect funding to engage management consultants BDO (Qld) to help the company develop and execute a strategic plan for its manufacturing and engineering companies.
Peter Birch said the process provided a range of valuable benefits for the company.
"One of the outcomes of the strategic plan was to streamline our manufacturing processes and we have reduced operational costs by up to 10% as a result," Birch said.
"We also plan to grow our Consulting Engineering service and revenues for this business are budgeted to grow by 50% per annum over the next two years.
"We now provide transportation related engineering services in Australia and overseas, including India and Thailand," he said.
The company has successfully secured more than $100,000 in grant funding over the past two years from various agencies, attributing their success in securing grants to their Grant Funding Strategy.
"J Smith & Sons is very targeted when it comes to applying for government grants. Our Grant Funding Strategy is aligned to our strategic plan and helps us to focus on grants that we have a good chance of winning," Birch explained.