DIDG – Sovereign Industrial Priorities Stream

Purpose and Program Overview

The Defence Industry Development Grants Program (DIDG) – Sovereign Industrial Priorities Stream is a government initiative. It aims to support Australian businesses in delivering projects aligned with Defence’s Sovereign Industrial Priorities (SIPs). The program seeks to enhance Australia’s defence industrial base, build sovereign capabilities, and increase global competitiveness. It focuses on enabling businesses to invest in projects that support Defence’s strategic needs.

The broader role of this grant is to facilitate innovation and growth within the Australian defence industry. It supports businesses in developing and delivering advanced capabilities that meet Defence’s requirements. This helps to secure Australia’s defence supply chain and strengthens its position in the global defence market.

The Sovereign Industrial Priorities Stream has approximately $65 million in funding available over four years from 2024-25 to 2027-28. This means about $16.25 million is available each year.

Key Grant Details

• Grant amount or funding range: Grants range from $100,000 to $1 million.
• Application open and close dates: Applications opened on February 29, 2024, and are accepted on a rolling basis. The current assessment batch closes on Thursday, 31 August 2025.
• Eligible industries or business types: Australian small to medium enterprises (SMEs) and Defence Industry Associations (DIAs) that operate within the defence sector.
• Required co-contributions: Grants cover up to 50% of eligible expenditure.
• Location/state/territory applicability: Projects must be carried out in Australia.

Priority Sectors

The grant targets projects that align with Defence’s Sovereign Industrial Priorities (SIPs). These priorities are key areas where Australia needs strong local defence industry capabilities. The specific SIPs include:

• Maintenance, repair, overhaul, and upgrade of Australian Defence Force aircraft.
• Continuous construction of new naval ships and support for existing vessels.
• Maintaining and improving combined-arms land systems.
• Domestic manufacture of weaponry, explosives, and ammunition.
• Advancement and incorporation of autonomous systems.
• Integration and optimisation of battlespace situational awareness networks.
• Testing, certifying, and guaranteeing the reliability of defence systems.

Funding Scope

• Minimum and maximum amounts per stream: Individual grants range from $100,000 to $1 million.
• Categories or streams of funding: This is a specific stream (Sovereign Industrial Priorities Stream) within the broader Defence Industry Development Grants Program.
• Project timeline or eligible funding duration: Projects must have a maximum duration of 24 months and must be completed by March 31, 2028.

Eligibility Criteria

• Business structure or size: Australian Small to Medium Enterprises (SMEs) or Defence Industry Associations (DIAs). The entity must be incorporated in Australia, including a company limited by guarantee or an incorporated trustee on behalf of a trust.
• Registered business location: The business must be an Australian entity, and projects must be carried out in Australia.
• ABN/GST status: Must have an Australian Business Number (ABN) and be registered for GST.
• Other requirements:
  • Must have an Australian financial institution account.
  • Must be non-income tax exempt.
  • Projects must meet a minimum eligible expenditure of $200,000.
  • Applicants must not use funding from other government sources to contribute to their portion.
  • Joint applications are permitted, with a designated lead applicant.

Eligible Activities and Expenses

The Sovereign Industrial Priorities Stream supports activities that directly contribute to Australia’s SIPs. Eligible activities may include:

• Capital equipment purchases.
• Investment in research and development (R&D) or technology upgrades.
• Commercialisation of new defence capabilities.
• Infrastructure upgrades to support defence manufacturing or service delivery.

General operational expenses and costs incurred before the grant agreement are not eligible.

Assessment Process

The Defence Industry Development Grants Program: Sovereign Industrial Priorities Stream is competitive. A judging panel assesses applications.

• Key evaluation criteria: Applications are assessed based on how well they align with Defence’s Sovereign Industrial Priorities, the project’s merit, and the value for money it offers. This includes considering the project’s impact on Australia’s industrial capability and its contribution to Defence’s strategic objectives.

Recent Program Updates

The Defence Industry Development Grants Program, including the Sovereign Industrial Priorities Stream, commenced on 29 February 2024 as part of the Defence Industry Development Strategy. Applications are being accepted on a rolling basis, with regular batch assessments. The current closing date for the next assessment batch is 31 July 2025.

Application Tips

Consider these points for your application:

• Ensure your project aligns with one or more of Defence’s Sovereign Industrial Priorities.
• Prepare detailed documentation outlining the scope of your project, its expected outcomes, and how it will enhance Australian defence industry capability.
• Demonstrate your business’s capacity to deliver the project successfully and contribute to Defence’s strategic needs.
• Ensure your project meets the minimum eligible expenditure of $200,000.

Where to Get Help

Consider consulting with a professional grant specialist, such as Pattens Group. We offer initial assessments to review your business’s eligibility and evaluate how well your project aligns with the grant’s objectives. You can also visit relevant government websites for application templates and further guidance.