The federal government’s $1 billion clean-technology grants package is set to spur capital investment across the manufacturing sector, as companies use the grants to buy new plant and equipment to lower their carbon footprint.
The package, unveiled by Industry and Innovation Minister Greg Combet recently, aims to help manufacturers invest in energy-efficient capital plant and equipment.
The Clean Technology Investment Program has allocated $800 million for general manufacturers who exceed defined annual energy consumption thresholds. Another $200 million is available to food and beverage processors and foundry and metal forging manufacturers.
The program is attracting interest as manufacturers look at investing in plant and equipment, according to Ken Richards, director of equipment finance broker Interlease.
”The government has announced it will match eligible manufacturers on a dollar-for-dollar basis and this, combined with the high Australian dollar, means that companies looking to import plant and equipment, and that qualify for a grant, will be paying about 30 per cent of the cost they would have otherwise been paying,” he said.
The government will match on a dollar-for-dollar basis manufacturers with turnovers under $100 million, for funding of less than $500,000. For grants under $10 million, applicants will be required to contribute $2 for every government dollar. For grants of $10 million or more, applicants will be expected to make a co-contribution of at least $3 for each dollar of government support.
John Ellis, managing director of Braeside precision tooling manufacturer Alfred Lewis Engineering, said he was considering applying for a grant to upgrade equipment for energy and labour efficiency.
”I’ve got an old machine that’s a bit of a problem because it’s slow and I’ve either got to spend a fair bit of money on it, or buy another one,” he said.
”I was looking at a new machine … the new grants system might be a possibility because I’m trying to justify that machine. A new machine is what I’d like to do because it’s going to increase our efficiency.”
But Mr Ellis said the application process could be difficult for smaller manufacturers. ”The problem is - and governments don’t seem to get it - we’ve got a company with only 28 people. I don’t have a fellow that I employ that works full-time on how to get grants from the government,” he said.
”The reason why people like us haven’t taken these things up is it’s just too hard.”
Scott Bouvier, a partner at law firm Mallesons Stephen Jaques, said: ”Small businesses will have to be big emitters to qualify for the $800 million grants pool due to the energy thresholds … Most small manufacturers won’t be in that category. But food and beverage processors and foundry and metal forging manufacturers will automatically qualify for a separate $200 million pool of funding irrespective of their emissions level.”
