The federal government’s move to redirect funding from the Modern Manufacturing Initiative (MMI) and Fund (MMF) may significantly disadvantage manufacturers, according to RSM Australia, a leading provider of audit, tax, and consulting services.
In its insights and analysis into the 2022-23 Australian Federal Budget, RSM Australia commended the federal government’s new targeted manufacturing initiatives, which the company said would promote and continue the transformation of the Australian industry.
However, the company claimed that the Budget’s redirection of funding that was previously committed to the MMI and MMF may cause disadvantages for manufacturers unless such support is appropriately deployed.
As part of the Budget, the federal government will retract uncommitted funding in the MMI and not proceed with the MMF’s third round. The redirection is aimed at improving the quality of spending and shifting the focus on existing funding towards higher priority initiatives and budget repair.
Meanwhile, RSM Australia detailed how the government’s investment in key national priority sectors and the establishment of a reconstruction fund is a winning strategy for the country.
The Budget included an investment of $15 billion to establish the National Reconstruction Fund, which would last for over seven years from 2023-24.
The funding program will seek to support, diversify, and transform Australian industries and the economy through targeted co-investments in seven priority areas, which are: resources, agriculture, forestry, and fisheries sectors; transport; medical science; renewables and low-emission technologies; defence capability; and enabling capabilities.
Amid intense global uncertainty, the government also implemented manufacturing measures that would allocate $37.3 million over the next three years from 2022-23 to the Department of Defence.
This would back the development of defence and fuel manufacturing industries, as well as the construction of the North Queensland Simulation Park in Townsville.
The measures are also aimed at boosting the development of sovereign capacity in renewable fuel manufacturing, particularly for the Australian Defence Force.
Several other manufacturing measures have been proposed as part of the 2022-23 Budget to boost national manufacturing capabilities, including $49.5 million over four years from 2022-23 to increase the security of the diesel exhaust fluid market in Australia.
