Australia’s manufacturing sector has received a funding boost, with the Australian Government allocating more than $17 million to 44 local businesses through the latest round of the Defence Industry Development Grants (DIDG) program, aimed at strengthening sovereign manufacturing capability across the defence industry.
According to the Australian Government, the new funding round brings total grants awarded under the program to more than $51 million, as part of a broader $170 million investment delivered across four streams: Exports, Skilling, Security and Sovereign Industrial Priorities.
The Department of Defence said the program is designed to support Australian defence manufacturers to modernise operations, expand export opportunities and improve competitiveness, while also strengthening security standards and workforce skills.
“This demonstrates Australia’s commitment to expanding and modernising our sovereign defence industrial base,” the government said in its statement, describing manufacturing as a key priority under the Defence Industry Development Strategy and the National Defence Strategy.
Minister for Defence Industry Pat Conroy said the funding would help build domestic manufacturing capacity across critical defence supply chains.
“We’re backing Australian businesses, Australian workers and Australian innovation to deliver the capabilities the Australian Defence Force needs,” Conroy said.
“These new grants will help local companies scale up, modernise and grow, ensuring our nation has the industrial strength and skills base to meet future challenges.”
A significant portion of the funding is directed toward advanced manufacturing projects aligned with sovereign defence priorities, including submarines, aerospace, guided weapons, explosive ordnance and advanced technologies.
Eight projects, totalling $2.9 million, are being supported by the Australian Submarine Agency to contribute to the AUKUS nuclear-powered submarine program.
“These projects contribute to a stronger, more resilient and sovereign defence industry – creating jobs, driving innovation, and building a future made in Australia,” Conroy said.
Among the manufacturing recipients, Australian Textile Group in Victoria will receive $1 million to upgrade textile finishing equipment for defence uniforms, while Catten Industries and DVR Engineering will each receive $1 million to invest in advanced machining and fabrication technologies for armoured vehicles and naval programs.
In Western Australia, Franmarine will receive $1 million to commission an underwater sustainment system to support submarine maintenance.
The Exports stream includes funding for manufacturers such as Cowan Manufacturing in New South Wales and Nu Metric Manufacturing in South Australia to modernise equipment for defence export markets, while the Skilling stream focuses on workforce training in areas such as non-destructive testing, systems engineering and industrial coatings.
Under the Security stream, several small defence suppliers will receive funding to uplift cybersecurity and physical security controls to meet Defence requirements.
The government said the DIDG program provides matching grants of up to 50 per cent for eligible defence manufacturers, with applications open year-round until 2028. It said the program is intended to support long-term industrial capability while maintaining a competitive and secure defence manufacturing sector.
