More than six months after a flurry of grant announcements by the Morrison government pledging $828 million to local manufacturing projects in the election lead-up, none of the recipients have seen a cent.
The Industry department has not yet entered into any formal arrangements with the approved recipients of the Modern Manufacturing Initiative’s (MMI) largest ‘Collaboration’ funding stream.
The proposed projects include a large battery material refinery hub, genomic cancer research, sovereign combat systems, a satellite manufacturing hub, and renewable energy infrastructure production.
All were approved for federal co-investment before last year’s election but concerns about the politicisation of the funding program and the complexity of the deals have dragged the process out as long as 10 months.
Individual funding commitments are as high as $119 million for the large manufacturing projects, with the investment amount and risk for the Commonwealth understood to be a significant factor in the time taken to draft and execute the contracts.
But Scott Morrison’s control of the program and the timing of the announcements of recipients in the lead up to the election last year also added to the delay, with concerns the government’s flagship manufacturing program had been politicised by the Coalition.
Labor reviewed all the applicants when it won government, ultimately approving all the selections. The review created a delay of no more than 12 weeks, Labor says, but many months later no contracts have been executed.
Concerns arose with an unusual provision in the MMI Collaboration stream guidelines that gave the final decision on recipients to the Prime Minister, at a time when the then-government was under scrutiny for several pork-barrelling scandals.
Labor’s review found the former Prime Minister’s decisions were in line with the independent panel’s recommendations, but Industry minister Ed Husic was still angered by the timing of the announcements.
All 17 recipients from the MMI Collaboration stream were announced in the 10 weeks leading up to the election. The announcements were typically made by then Industry minister Angus Taylor, often accompanied by the former Prime Minister and local candidates along with the promises of new jobs and campaign slogans.
The flurry of announcements, which also included another near-$300 million in smaller streams of the MMI, came in stark contrast to the slow start of the program.
The MMI was announced in October 2020. It offered $1.3 billion in grants to Australian manufacturers in priority sectors to scale, collaborate and commercialise.
The large Collaboration grants were set aside for transformative projects involving multiple stakeholders working together and co-investment from industry and state or territory governments.
Applications for the Collaboration stream opened in August 2021 and closed less than a month later, meaning applicants have now been waiting 18 months since lodging their proposals.
In February last year, Industry department officials confirmed only $292 million had been executed from the entire $1.3 billion MMI program, with just $85 million actually making it to manufacturers, one year on from applications opening.
Since the election, the only grant agreements to be entered into have been from the smaller Integration and Translation streams’ second round.
Nearly $300 million in funding for the smaller streams were also announced in the month before the election.
By November only a third of these recipients had entered into formal agreements. But this has doubled to two thirds as of last week.
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