WA Local Capability Fund: Digital Transformation

Purpose and Program Overview

The WA Local Capability Fund: Digital Transformation Round is a Western Australian Government initiative. It provides grants to businesses to help them adopt and use digital and data technologies. This funding aims to improve productivity, competitiveness, and resilience. It also helps businesses improve safety and sustainability.

This round is part of the broader Local Capability Fund, which has a total funding pool of approximately $5 million across all rounds for the 2025-26 financial year. The Digital Transformation Round is essential for helping businesses to modernise. This helps them compete for contracts in both the public and private sectors.

The program supports the state’s digital economy. It helps businesses to streamline their operations and become more efficient. This contributes to a stronger WA economy and helps create local jobs.

Key Grant Details

• Grant amount: There are two funding streams:
  • Stream 1 – Operational Improvements: Up to $25,000.
  • Stream 2 – Advanced Technology: Up to $50,000.
• Application open: Now open.
• Application close: 4 September 2025 at 3:00 PM AWST.
• Eligible industries/business types: For-profit SMEs with fewer than 200 employees. The business must be based in Western Australia.
• Co-contributions: Applicants must provide a 50% co-contribution of eligible project costs.
• Location/state/territory applicability: Western Australia only.

Priority Sectors

The grant is open to a broad range of sectors. The fund supports businesses that supply goods or services to other businesses or government agencies. Consideration is given to consumer-focused businesses that show strong potential to expand into new markets.

Funding Scope

• Minimum and maximum amounts per stream:
  • Stream 1: Up to $25,000.
  • Stream 2: Up to $50,000.
  • To receive the full amount, project costs must be at least double the grant amount.
• Categories or streams of funding:
  • Stream 1: Supports digital operational improvements.
  • Stream 2: Supports the purchase and integration of advanced technologies.
• Project timeline: Projects should be completed within the financial year.

Grant Amount in Total

The total funding available for all 2025–26 Local Capability Fund rounds is approximately $5 million. The specific amount for the Digital Transformation Round is not stated.

Eligibility Criteria

• The business must be a for-profit organisation or an incorporated not-for-profit Aboriginal Corporation operating commercially.
• The business must have its principal place of business in Western Australia. It must have been operating there for at least three years.
• The business must have an active ABN.
• The business must be registered for GST for at least 12 months.
• The business must have a turnover of more than $500,000 in at least one of the three previous financial years.
• The business must have at least one full-time equivalent employee besides the owner. It must have fewer than 200 employees.

Eligible Activities and Expenses

The grant supports activities that improve digital and data capabilities. This includes:

• Purchasing and integrating software.
• Cybersecurity audits and mitigation strategies.
• Automation of business processes.
• Implementing data analysis tools.
• Purchasing advanced technologies, such as robotics or additive manufacturing software.
• Hiring specialist consultants for digital strategy.

Assessment Process

This is a competitive, merit-based grant. An independent Assessment Panel reviews applications. Evaluation criteria include:

• Business need (30% weighting).
• Potential for digital transformation and impact (30% weighting).
• Solution suitability and implementation readiness (20% weighting).
• Financial viability and risk (10% weighting).
• Value for money (10% weighting).

Recent Program Updates

The 2025-26 funding round is now open for applications. The closing date is 4 September 2025. The program now has a more transparent two-stream structure. This helps businesses at different stages of digital transformation.

Application Tips

• Read the guidelines carefully to confirm eligibility and choose the correct funding stream.
• Prepare quotes and financial statements in advance.
• Clearly explain how your project will improve productivity and competitiveness.
• Simplify your language. Make your value proposition easy to understand for the panel.
• Provide a clear budget that shows your 50% co-contribution.

Where to Get Help

Consider consulting with a professional grant specialist like 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.