10 May 2023

While delivering Australia’s first budget surplus in 15 years, Treasurer Jim Chalmers made some funding and grants announcements across various sectors in Federal Budget 2023/24.

Small Business Energy Incentive program

From July 1 2023, the Small Business Energy Incentive program will launch to help small and medium businesses cut energy bills. Businesses with a turnover below $50 million can claim a 20% deduction on eligible assets, including efficient white goods, electrified heating and cooling systems, and installing batteries and heat pumps. The maximum claim amount is $20,000, with up to $100,000 worth of spending eligible. About 3.8 million small and medium-sized businesses are expected to benefit from this initiative.

Innovation funding for SMEs and start ups

The Industry Growth Program receives $392.4 million to assist SMEs and start-ups in priority sectors. The Advanced Strategic Capabilities Accelerator will receive $3.4 billion over ten years to convert innovative technologies into Defence capability with industry collaboration.

National Reconstruction Fund (NRF)

The Australian government has reiterated its commitment to one of the most substantial initiatives to support the country's industry by investing $61.4 million to create the National Reconstruction Fund Corporation. This corporation will oversee the $15 billion fund the government has already allocated to co-invest in transformative projects within specific industries.

Even though the NRF Corporation will not provide grants, it will finance ventures that promote diversification and innovation in Australia's economy and industry. This means that it will offer backing to crucial sectors such as renewables, medical science, transport, defence capability, forestry and fisheries, resources, and enabling capabilities such as data science, software development, and engineering.

Critical technologies

A $116 million investment in essential technologies is expected to boost economic growth, create new jobs, and enhance technology industries. $101.2 million will be used to support businesses in incorporating quantum and AI technologies, including extending the National AI Centre, establishing an Australian Centre for Quantum Growth, and supporting AI adoption by SMEs. The Powering Australia Industry Growth Centre will also be created to promote advanced technology and expertise under the Australian Made Battery Plan.

Regional empowerment

The budget includes a significant commitment of $1.3 billion over five years to support the transition to clean energy. The funding will be used to decarbonise existing industries, develop new clean energy industries and support manufacturing capacity. The Critical Inputs to Clean Energy Industries Stream will receive $400 million to support sovereign manufacturing capability, while the Industrial Transformation Stream will receive an additional $400 million to reduce emissions at existing regional industrial facilities.

Blow to export grant funding

In 2021, the Export Market Development Grant (EMDG) program, which refunds export promotion expenses for existing and prospective exporters, was significantly updated, leading to a historical low in the amount of grants given to candidates.

The government has decided to decrease funding for the EMDG program, which has been assisting companies for almost half a century, and save $61.0 million over four years, starting in 2023-24. This measure will not affect any funding that has already been committed to or any applications that are currently under assessment.

Targeted support for Apprenticeships

The Government will allocate $54.3 million over five years from 2022-23, to introduce a new support model for Australian Apprenticeships by July 2024. The model aims to increase completion rates and diversity of the apprentice workforce. $5.0 million grant funding over three years from 2024-25 will be provided to support women in historically male-dominated trade apprenticeships. This includes education, advice, and cultural support for workplaces and businesses to attract and retain women. The new model will also support women who started non-traditional trade apprenticeships before July 2024.

Supporting transport priorities

The Government will allocate $267.4 million over seven years starting 2022–23 to support transport priorities, including safety and productivity. This includes $43.6 million over four years from 2022–23 to create the National Road Safety Action Grants Program. It will support education and awareness, innovation, research, First Nations road safety, and vulnerable road users.

Additional priorities

• $21.6 million will be allocated in 2023–24 to extend the Indigenous Boarding Providers grants program for rural and remote First Nations students for an additional year. This extends the Closing the Gap Outcomes and Evidence Fund by two years to 31 December 2026, which provides targeted grant funding to Aboriginal Community Controlled Organisations to deliver improved and co-designed methods of service delivery for First Nations people.

• Allocation of $11.6 million over three years from 2023-24 to establish a Social Enterprise Development Initiative, which will offer eligible organisations grants, online education, and mentoring to enhance their ability to access capital and participate in social impact investing, resulting in improved social outcomes.

• Usage of unspent funding of $34.3 million over two years from 2022-23 for Financial Wellbeing and Capability sub program activities. This includes $32.8 million for additional support for vulnerable individuals, families, and communities in financial crisis, and $1.5 million for a program review. Additionally, $0.4 million in unspent funding will be used in 2023-24 for an Early Learning Childcare Facilities Improvement Grant opportunity.

• Allocation of $687.4 million over six years from 2022-23 for sustainable urban development. This includes $211.7 million over three years from 2023-24 for the Thriving Suburbs Program which will provide community infrastructure grants for urban and suburban areas through a competitive program.

Check out the full coverage from the Federal Budget 2023/24 here.

The views and opinions expressed in this article are those of the author/s and do not necessarily reflect the thought or position of Findex Group Limited.