Increasing investment attractiveness
The Government recognises that demand clarity alone may not be sufficient to enable industry to invest in its own uplift across all priority product categories, particularly where Australian industry faces insufficient economies of scale to deliver a commercial rate of return on investment.
For this reason, there are a range of financial support mechanisms for industry, including additional funding to the Defence Industry Development Grants Program, providing access to non-grant financing, and enabling industry to leverage innovation programs.
Defence Industry Development Grants Program
The Defence Industry Development Grants (DIDG) Program provides matched funding to support Australian businesses to invest in their own uplift in plant, skills, and security. This program seeks to assist with capability uplift and qualification costs, noting that these costs are often not recoverable given uncertainty of a purchase order. Funding is provided across 4 dedicated streams.
The Government has provided additional dedicated NPS-specific funding through the DIDG Program, to ensure support for SMEs with a demonstrated potential to manufacture priority products for NPS supply chains, such as participants in the DIVQ program.
Providing non-grant financing
Government-funded debt and equity investments will provide additional capital for capability uplift of Australian suppliers. One existing fund accessible to Defence suppliers, including those part of the NPS supply chain, is the National Reconstruction Fund (NRF).
The NRF is a $15 billion fund established to provide loans, guarantees and equity to support projects that diversify and transform Australia’s industry and economy. Seven priority areas have been identified, including Defence capability.
For more information see National Reconstruction Fund(Opens in a new tab/window).
Supporting Australian suppliers to be export-ready
Linking Australian suppliers within the NPS supply chain, with financial and advisory support to secure export opportunities.