What’s in the budget for businesses? A lot, for those who can engineer a $22.7 billion ‘Future Made in Australia’

What’s in the budget for businesses? A lot, for those who can engineer a $22.7 billion ‘Future Made in Australia’
  • PublishedMay 15, 2024

Sydney-based SunDrive is one of the big winners of a budget that is investing major money into a “Future Made in Australia”.

The solar panel start-up has a new technology that replaces expensive silver with cheaper copper in a high-efficiency solar panel, developed from research done at UNSW.

But unlike previous Australian solar technology advances, which powered China’s dominance in producing panels, SunDrive’s founders want to manufacture at least some of their product onshore.

“Australia has led the world in solar innovation — today’s commercial solar cells were invented in Australia, Australia has held the world record efficiency for 30 of the last 40 years,” SunDrive CEO Vince Allen said.

“However, very little of the economic value that has been produced has been captured in Australia from its solar R&D efforts.

“Last year, about $50 billion worth of solar panels were made around the world, but very little of that has been captured in Australia.”

SunDrive solar panel sits on a corrugated metal panel at a factory in southern Sydney.
SunDrive is proving the scalability of its new solar panel at this factory in southern Sydney before embarking on full-scale manufacturing in the Hunter region of NSW.(ABC News: Nadia Daly)

The Albanese government is trying to change that with an $835.6 million investment over the next decade and $66.8 million per year from 2034-35 to 2036-37 to establish the Solar Sunshot program administered by the Australian Renewable Energy Agency (ARENA).

It’s just one component of the federal government’s $22.7 billion Future Made in Australia program, which Treasurer Jim Chalmers said in his budget speech is intended to make the nation “an indispensable part of the global economy”.

Mr Allen said the billion-dollar investment is enough to kick-start the local solar panel industry.

“Australia can produce better solar products using its strength in solar innovation, and we can make these products and export them all around the world,” he argued.

SunDrive CEO Vince Allen speaks to ABC's The Business in the company's test factory.
SunDrive CEO Vince Allen told The Business that he is very happy with the support the solar panel start-up has received from the Albanese government.(ABC News: Daniel Irvine)

Green hydrogen and critical minerals win big

David Christensen is the managing director of graphite miner Renascor.

Like SunDrive, Renascor has already been announced as a recipient of government funding, in its case as a critical minerals producer — a sector budgeted to see at least $7 billion in government assistance over the next 11 years and billions more in the years beyond that.

Renascor managing director David Christensen sits in an office with a window behind.
Renascor managing director David Christensen says the government support for his firm has been very welcome.(ABC News: Ben Pettitt)

“What we’re really hoping to see is further initiatives like the critical minerals facility, that’ll allow Australia not just to do the mining but to move one step further, value-add, and build into this growing industry,” he told The Business.

“So that we’re not just mining a project, but we’re refining it and we’re doing more technical development work and really becoming an advanced manufacturing base in an emerging industry.”

The government is budgeting to invest a further $1.5 billion over seven years to support renewables and clean technology projects, a further $1.7 billion over a decade in the Future Made in Australia Innovation Fund, and $549 million over eight years to support domestic battery manufacturing, all managed by ARENA.

“The real emerging growth in this industry is in electric vehicles … and this is really driving demand for new graphite projects,” Mr Christensen said.

“So, we would expect the bulk of the material that we’re going to be mining and then refining here in Australia, to wind up in lithium-ion batteries and then go into electric vehicles.”

The other major renewable technology initiative is support for green hydrogen production, to the tune of around $8 billion over the next 11 years.

However, Professor Sims is not as sold on government investments in other areas where Australia does not enjoy natural advantages.

“For security reasons, strategic reasons, the government feels that we should be making certain things in Australia, and we’ve seen announcements on quantum computing, we’ve seen announcements on solar panels,” he observed.

“And the government is arguing, I think, that there needs to be some element of Australia having its own industry.

“The onus is on government to explain the strategic reason, the security reason, because, after all, we’re using taxpayers money to do that.”

Instant asset write-off extended

While start-ups and the top end of town are in line to get the big dollars to invest in a Future Made in Australia, the government has offered some assistance for small businesses.

“We want Australian small businesses to share in the big opportunities ahead as well,” Mr Chalmers said.

“That’s why we are extending the $20,000 instant asset write-off until 30 June 2025.

“Providing $290 million in cash flow support for up to 4 million small businesses.”

Under the extension, businesses with an aggregated annual turnover of less than $10 million will continue to be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025.

Treasury said the asset threshold applies on a per asset basis, so small businesses can instantly write off multiple items.

Eligible small businesses will also receive energy bill relief of $325 next financial year.

The Australian Chamber of Commerce and Industry’s CEO Andrew McKellar told The Business ahead of the budget that a key priority should be reining in government spending to put downward pressure on inflation.

“It’s got to show that it’s getting spending under control in those areas where there’s been double-digit growth — that’s been on public debt interest, that’s been on areas like NDIS, there’s a lot of pressure in areas like the aged care budget, the rest of the health budget, we’ve seen what they’ve projected in terms of defence,” he argued.

He was also concerned about the government’s plan to put a lid on the number of international student enrolments in an effort to address Australia’s housing shortage from the demand side.

“International students, international education, that’s a $40 billion-plus export industry for Australia,” he said.

“We shouldn’t be capping that we should be encouraging that.”


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