Manufacturers get $100-million fund as automotive producers leave Australia

Federal budget 2017 includes a $100-million fund for manufacturers to help them expand their business as some car manufacturing companies in Australia close. Industry Minister Arthur Sinodinos announces the money will reach businesses that intend to produce high-value products, specifically those in Victoria and South Australia.

According to the minister, $47.5 million will be an advanced manufacturing growth fund, about $24 million is allocated for research projects to help businesses develop new products, $10 million is for innovation labs in Victoria and South Australia and $5 million is for the maintenance of engineering expertise, which can be achieved by student research. Sinodinos believes it is likely that a large portion of the money will go to companies that specialise in the auto sector, but are now looking to diversify and explore something new. He adds that some of the money will ensure components supplies will be part of global supply chains.

He went on to acknowledge that the country has a great future when it comes to manufacturing and that includes the auto sector. "I opened the Auto Aftermarket Expo in Melbourne a few weeks ago and Australians are rev heads,” he said per the ABC.

Nick Xenophon, Nick Xenophon Team leader, has been quick to react about the news, saying it is a huge win for South Australia. He recognises the funding as a result of lengthy negotiations to secure money for businesses which are currently depended on Holden.

Later this year, Holden will cease its production in South Australia. Ford closed its factories in the country last year after over 90 years of production.

Xenophon says the funding will help small and medium-businesses in the automotive sector to transition when Holden closes in October. "It will mean these businesses are able to turbo-charge diversification plans,” he adds.

But for South Australia's Manufacturing and Automotive Transformation Minister Kyam Maher, the funding is a “dud.” He argues that Australia is less than six months away from the closure of Holden and the amount the federal government allots for businesses is small.

In other business news, Smart Company is reporting that the Australian Competition and Consumer Commission issues the first infringement notices for allege breaches of Australia’s revised Franchising Code. Domino’s Pizza Enterprises is hit with $18,000 in fines.

ACCC Deputy Chair Dr Michael Schaper says marketing funds are a huge expense for franchisees. Activities of these funds need explanation in a timely manner. For more Australian business news, see SAP report below.

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