Labor Government Promises New Industry Initiatives
- Labour Announcements
- Currently Open Grants
With every change in Government brings a new horizon whereby positive announcements are pushed out with headline promises of additional funding to drive economic change.
The challenges we face today and the pace in which generational change is impacting our future at both a global and local level have been further impacted by multiple externalities like:
- COVID effects on supply chain/sovereign capability giving rise to an increased rate of technology adoption
- the Russia/ Ukraine conflict effects on energy supply resulting in rising costs of living
- sovereign risks as an outcome of China’s emergence dividing the West/ East
- as well as ongoing debate concerning collective actions required to deal with climate change in our goal to reach zero emissions.
It’s fair to say that we will not have seen the need for such quantum change requiring major structural adjustment since the last meaningful Labor Government under Hawke/ Keating in the 1980/90’s which floated the Aussie dollar, opened the Australian economy to global competition, launched Medicare and the National Superannuation scheme in addition to rolling out many of the industrial, environmental and social reforms which are commonly accepted as normal practice today.
At this stage we have seen only 2 major announcements from Labor:
Ed Husic appointed Minister for Industry and Science
$15 billion National Reconstruction Fund (NRF)
Long-time tech and innovation advocate Ed Husic will be Australia’s new Industry Minister after he retained his portfolio in the new Labor government’s Cabinet. Mr Husic has served as Shadow Industry Minister since the start of 2021 and has advocated for the local tech and manufacturing sectors since he first entered Parliament.
Husic has already promised to review the broader innovation policy including the R&D Tax Incentives where software eligibility has been a point of conjecture for several years.
The Labor Party’s key commitment to advanced manufacturing is a $1 billion Advanced Manufacturing Fund funded under the new Government’s greater $15 billion National Reconstruction Fund. Also included is $1 billion for a Critical Technologies Fund and $1.5 billion for a Medical Manufacturing Fund.
The operating model for the NRF is the Clean Energy Finance Corporation set up under the previous Rudd/Gillard government. “It’s got an independent board, made up of smart people who will make the calls on investments,” Mr Husic said.
As we all know the devil will be in the detail so watch this space as we attempt to report on the details as and when they are released. Suffice to say that most existing Liberal funding programs will be reviewed, altered or replaced.
The following grants are still open:
A grant of $50,000 to $1 million for up to 50% of the cost of a project that builds capabilities aligned with Defence’s Sovereign Industrial Capability Priorities. The maximum grant period is 30 months.
A grant of $50,000 to $1 million for up to 50% of the cost of a project.
Grant funding is capped at $3 million in a 3-year period per recipient.
This program opened in late April and will remain open until funds are exhausted.
The Advanced Manufacturing Commercialisation Fund provides small to medium manufacturing enterprises with matched funding to commercialise new products and processes.
Funding is available for small to medium manufacturing enterprises undertaking projects that align with one or more of the 6 National Manufacturing Priorities:
- food and beverage
- medical products
- resources technology and critical minerals processing
- recycling and clean energy
Closing Date: 30 Jun 2022
Matched funding of between $100,000 and $1 million.
Austrade’s Export Market Development Grants (EMDG) program helps Australian businesses grow their exports in international markets. These grants encourage small to medium enterprises to market and promote their goods and services globally.
Grants of up to 50% of eligible marketing expenses are claimable up to the level of the funding cap of $157m per annum.
Round 2 applications will open soon after the Labor Government considers additional funding for the program due to the higher than expected Round 1 participation reducing the benefit by up to 80%.
The Research and Development Tax Incentive (R&D Tax Incentive or R&DTI) provides tax offsets to incentivize local companies to undertake R&D. The financial risk associated with the technical or scientific risk required to develop new products, processes and services is claimable and the benefit is delivered in cash at a rate of 43.5% for start-up companies under $20m in annual revenue.
Applications open on the 1st July for companies with a standard financial year wishing to claim their FY 2021-22 activities as per the following rates of return:
- Annual revenue <$20m – Company Tax Rate: 25% – Refundable Tax Benefit: 43.5% (if matched by tax losses) or 18.5% (when trading in profit)
- Annual revenue $20m-$50m – Company Tax Rate: 25% – Non-Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure which accounts for up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.
- Annual revenue >$50m – Company Tax Rate: 30% – Non-Refundable Tax Benefit/2 tier benefit: 8.5% on eligible R&D expenditure up to 2% of total company expenses and an additional 16.5% on eligible R&D expenditure exceeding the 2% baseline.
– Labor Government Promises New Industry Initiatives –
- Scope your potential to claim various grant programs
- Assist with the preparation and lodgement of grant applications
- Review or provide a health check on your internally prepared grant applications
- Establish record-keeping practices as required under various grant programs
- Provide prepayment loans against future cash refunds under the R&D Tax Incentive
- Keeping industry informed on all new Government policy and grant initiatives
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