Sovereign Industrial Capability Priority and Capability Improvement Grants Programs

Defence continues to support Australian Government efforts to build a robust, resilient and internationally competitive defence industry.

Through significant investment in industry grant programs, Defence seeks to contribute to the development of a strong defence industrial base.

Through the Sovereign Industrial Capability Priority Grants program, Defence has enabled Australian small and medium sized enterprises to increase their capacity to support strategically critical Defence capabilities.

Since its inception in 2018, this program has funded over 100 opportunities, to the value of approximately $64 million, to drive Australian innovation and manufacturing, making our small to medium businesses more competitive and our supply chains more secure.

Since the launch of the Centre for Defence Industry Capability (CDIC) in 2016, the Capability Improvement Grants program has supported Australian small to medium businesses to implement business improvement recommendations made by the CDIC Defence Business Advisers.

Defence has approved over 420 Capability Improvement Grant applications for Australian businesses to the value of approximately $18 million.

In October 2020, in acknowledgment of the challenges posed by the Covid-19 pandemic, the Government announced an additional $24 million would be provided over two financial years to the Sovereign Industry Capability Priority grants and other industry support grants.

Co-contribution ratios were also lowered to further support small to medium businesses in the Defence sector.

This additional investment was welcomed by industry, and grant applications almost doubled during the first seven months of the economic stimulus period.

The strong response from industry has brought the programs close to the limit of their funding allocations, meaning the Sovereign Industrial Capability Priority and Capability Improvement Grants Programs will need to conclude for this financial year.

Applications that have already been submitted will be considered over the coming weeks, however, no new applications will be accepted.

The Government recognises that developing an industrial base with the capability, posture and resilience to meet our future defence capability needs is a long-term endeavour and we are exploring options for future support to small and medium sized businesses that seek to deliver world-class capability for our Defence Force.

The Skilling Australia’s Defence Industry (SADI) grant program remains active and supports Australian businesses to invest in their workforces through skilling or re‑training existing staff.

Under SADI, small and medium sized businesses can apply for grants of up to $500,000 for skilling needs, and industry associations can apply for grants to facilitate training for defence industry SMEs to help them meet their Defence capability requirements.

Businesses are encouraged to explore whether they are eligible for a SADI grant.

Enquiries may be directed to the Business.gov contact centre 13 28 46.