Defence Industry Development Grants Program

Purpose and Program Overview

The Defence Industry Development Grants Program (DIDGP) is an Australian Government initiative designed to strengthen the nation’s sovereign defence industrial base. The program supports Australian businesses in enhancing their capabilities across four key areas: Sovereign Industrial Priorities, Exports, Skilling, and Security.

This grant program helps to build a more capable, resilient, and competitive Australian defence industry. It focuses on developing skills within the workforce, improving export capabilities in priority defence sectors, and uplifting the security of Australia’s defence industrial base to meet strategic challenges.

The program has a maximum funding cap of $3 million per ABN over any three years.

Key Grant Details

• Grant amount or funding range:
  • Sovereign Industrial Priorities Stream: $50,000 to $1,000,000.
  • Skilling Stream: $5,000 to $250,000.
  • Exports Stream: $15,000 to $250,000.
  • Security Stream: $10,000 to $100,000.
• Application open and close dates:
  • Sovereign Industrial Priorities Stream: Closes Sunday, 31 August 2025, 11:59 PM (AEST).
  • Skilling Stream: Closes Thursday, 31 July 2025, 11:59 PM (AEST).
  • Exports Stream: Closes Thursday, 31 July 2025, 11:59 PM (AEST).
  • Security Stream: Closes Sunday, 31 August 2025, 11:59 PM (AEST).
• Eligible industries or business types: Small to Medium Enterprises (SMEs) with fewer than 200 employees, and Defence Industry Associations (for the Skilling Stream only).
• Required co-contributions: Grants cover up to 50% of eligible expenditure. Applicants must contribute the remaining 50% from non-government sources.
• Location/state/territory applicability: Projects must be undertaken within Australia.

Priority Sectors

The program prioritises investments that align with Australia’s Sovereign Defence Industrial Priorities. These include areas critical for national defence capability.

Funding Scope

• Minimum and maximum amounts per stream:
  • Sovereign Industrial Priorities Stream: Minimum $50,000, maximum $1,000,000.
  • Skilling Stream: Minimum $5,000, maximum $250,000.
  • Exports Stream: Minimum $15,000, maximum $250,000.
  • Security Stream: Minimum $10,000, maximum $100,000.
• Categories or streams of funding: The DIDGP has four distinct streams:
  • Sovereign Industrial Priorities Stream: Supports manufacturing plant and equipment that directly enhances Australia’s key sovereign defence capabilities.
  • Skilling Stream: Focuses on upskilling the defence industry workforce in critical technical and professional areas.
  • Exports Stream: Assists SMEs in overcoming export barriers and growing their capacity to compete in international defence markets.
  • Security Stream: Helps defence industry businesses improve physical and cyber security measures to meet Defence Industry Security Program (DISP) standards.
• Project timeline or eligible funding duration: Not explicitly stated for overall program duration, but projects must be completed within the timeframe of the specific grant round.

Eligibility Criteria

• Business structure or size: Small to Medium Enterprises (SMEs) with fewer than 200 employees. Defence Industry Associations are eligible for the Skilling Stream only.
• Registered business location: Incorporated in Australia.
• ABN/GST status: Must have an ABN and be registered for GST.
• Other requirements:
  • Must have an account with an Australian financial institution.
  • Must be non-income-tax-exempt.
  • Cannot be an individual, partnership, unincorporated association, overseas organisation, or government body.
  • Cannot be on the National Redress Scheme’s ineligible list.

Eligible Activities and Expenses

The grant supports activities specific to each stream:

• Sovereign Industrial Priorities Stream: Purchase, leasing (minimum four-year term), construction, installation, or commissioning of manufacturing plant and equipment directly supporting Sovereign Defence Industrial Priorities. Includes design, engineering, workforce training, and commissioning related to new equipment.
• Skilling Stream: Initiatives increasing Defence-related technical skills within the applicant’s organisation or an SME (if the applicant is a Defence Industry Association). A registered or qualified provider must deliver training.
• Exports Stream: Projects aimed at overcoming export barriers and building competitiveness in international defence markets. Activities may include targeted market entry, export planning, or meeting export compliance requirements aligned with Sovereign Defence Industrial Priorities.
• Security Stream: Projects improving or maintaining physical and/or cyber security measures to align with Defence security requirements, including DISP standards. Examples include upgrades to secure facilities and enhancements to cybersecurity systems.

Ineligible expenditures include product certifications not linked to the commissioning of funded equipment, creation of inventory, non-recurring engineering costs (unless directly related to funded capital equipment), research and product development that do not directly support eligible activities, general marketing, routine operational expenses, and costs incurred before grant approval.

Assessment Process

The Defence Industry Development Grants Program is a competitive program. Applications are assessed against specific criteria relevant to each stream.

• Key evaluation criteria:
  • Sovereign Industrial Priorities Stream: Contribution to a Sovereign Defence Industrial Priority; capability and resources to deliver the project and commercial benefits.
  • Skilling Stream: Impact of the skilling initiative on meeting priority Defence capabilities; capability and readiness to deliver the project.
  • Exports Stream: Potential to enhance Australian defence industry export capabilities; capacity to implement export activities.
  • Security Stream: Contribution to the security enhancement of the Australian defence industrial base; ability to achieve intended outcomes.

Applications must address all criteria and sub-criteria, include mandatory attachments, and demonstrate a strong link to Sovereign Defence Industrial Priorities.

Recent Program Updates

The Defence Industry Development Grants Program is currently open for applications with specific closing dates for each stream in July and August 2025. This indicates a current funding round.

Application Tips

Consider these points for your application:

• Double-check all eligibility criteria for your business and the specific stream for which you are applying.
• Prepare all mandatory attachments and supporting documents thoroughly.
• Align your proposal directly with one or more of the Sovereign Defence Industrial Priorities.
• Demonstrate how your project will contribute to a more capable, resilient, and competitive Australian defence industry.
• Ensure your proposed project’s expenditure meets the eligible cost requirements and that you can provide the required co-contribution.

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.