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Minister for Defence Industry Melissa Price has confirmed that the federal government will restart a series of revised competitive grants programs, aimed at supporting sovereign defence capabilities and helping businesses win defence work oversees.
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The announcement, which was delivered at the annual Defence Connect Budget Lunch, included plans to restart a renewed Sovereign Industrial Capability Priority grant program.
“I am very pleased to announce today that we will restart a revised and a competitive version of the Sovereign Industrial Capability Priorities grant program, updated guidelines will be released later today with applications to open very soon,” Minister Price announced.
It is further expected that the federal government will invest an additional $80 million over half a decade to not only help Australian businesses grow their domestic capabilities, but also win defence contracts with overseas partners under the new Defence Readiness Grant Program and the Global Competitive Grant Program.
“We will also invest more than $80 million over the next five years to build greater sovereign capability within Australian SMEs, this is not a nice to have – this is essential investment,” the minister said.
“Starting on July 1, the Capability Improvement Grant Program, to be renamed the Defence Readiness Grant Program, and the Global Competitive Grant Program will both restart. This will enable us to better position business in the industry to do more defence work at home and also to win defence work abroad.
“All of our grant programs will revert back to their original pre-COVID 19 co-contribution levels of 50/50. All of this comes after we’ve already invested $82 million in industry through these programs over the recent years.”
The minister’s office is scheduled to release further information on the grants shortly
Earlier this week, Commonwealth Procurement Rules were updated to enable Defence contracts valued up to $500,000 to be offered exclusively to SME suppliers, either on an individual basis or collectively via a tender process.
The amendment, set to take effect on 1 July 2022, represents a 150 per cent increase to the existing threshold of $200,000.
The amendments follow the completion of the Australian Standard for Defence Contracting and Defence Procurement Review.
Finance Minister Simon Birmingham noted the benefits of the revision for the local industry and in supporting the broader push to bolster sovereign industrial capability.
“We’re backing Australian small and medium businesses to get more work by giving them access to more defence procurement opportunities,” he said.
“We have already seen small and medium business participation in defence projects reach record levels through other changes to procurement rules that have cut red tape and reduced costs for small businesses within the market.
“This significant change will allow small and medium businesses to be directly engaged in more defence procurement, and that will help them grow their own operations and create more jobs.”
Minister Price reflected on the benefits for competition.
“This is a great initiative for small and medium defence industry businesses because it will give them more opportunities to tender for Defence contracts,” she said.
“This supports a competitive Australian defence industry that will deliver Defence capability and value for money outcomes for Australian taxpayers.
“Defence will continue to engage with industry to ensure these businesses are able to maximise their participation in Defence procurements.”
Defence procurement projects over the 2021-22 financial year totalled approximately $37.4 billion.
Changes to the procurement rules come amid the ‘In our own backyard’ media advertising campaign launched in March, pushed out across television, radio and social media.
The campaign aims to showcase Australia’s manufacturing prowess throughout history in a bid to kindle interest in a career in the local defence industry.
[Related: Defence issues new RFI in search for optimum T&E partnership]
