Federal Budget 2024-25: What does it mean for Australian manufacturers?

May 15, 2024 by Mark Dingley

Budgets are all about greater efficiency – just like Total Productive Maintenance


Australian Treasurer Jim Chalmers handed down the 2024-25 Federal Budget on Tuesday, 14 May.

The Treasurer touted the federal budget as being for “every Australian”, but is it for Australian manufacturers?

This article will delve into the Budget Papers and consider what the 2024-25 Federal Budget means for Australian manufacturers.

Future Made in Australia: The dawn of the new manufacturing era?

Along with the much-anticipated tax cuts, the revival of local manufacturing is the centrepiece of the government’s budget this year.

It’s all laid out in the Future Made in Australia plan.

Future Made in Australia aims to directly support Australian industry and innovation, particularly in battery production, solar energy, critical minerals and other products essential to transitioning to net-zero emissions.

The plan outlines $22.7 billion of spending on clean energy and strategic industries. Of that, $1.4b will be provided over the next decade to support the manufacturing of clean-energy technologies, such as developing local solar-manufacturing capabilities.

As Mr Chalmers said in his Budget speech, “Global energy transportation presents a golden opportunity for Australia.”

This plan intends to make the nation “an indispensable part of the global economy”.

What kind of projects is it funding?

A few winners of Future Made in Australia have already been announced, including:

  • Solar panels: One in three Australian households have solar panels, the highest rate globally, but only 1% are manufactured locally. The federal government hopes to change that with its new $1b Solar SunShot program, administered by the Australian Renewable Energy Agency (ARENA), which will oversee production subsidies and grants to kick-start the local solar panel industry and increase Australia’s role in the global solar manufacturing supply chain.
  • Green hydrogen: The Budget is supporting green-hydrogen production to the tune of around $8b over the next 11 years. Most of this will come from production tax incentives, which aim to make Australia’s pipeline of hydrogen projects commercial sooner, with industries rewarded for scale and success. The Budget also expands the Hydrogen Headstart program, announced in last year’s Budget, to provide revenue support for large-scale renewable hydrogen projects through competitive hydrogen-production contracts.
  • Critical minerals: We have previously discussed the need to capture the value from critical minerals, so we are excited to see the Budget’s investment in the sector. The critical minerals sector is budgeted to see at least $8.8 billion over the decade to incentivise onshore refining and processing of our critical minerals. This includes a production tax incentive for processing and refining critical minerals at a cost of around $7b over 10 years. In addition, $566 million over 10 years is budgeted for GeoScience Australia to map what is under Australia’s soil and seabed. The aim is to find deposits of critical minerals and rare earths needed to develop renewable energy technologies.
  • Batteries: Through its Battery Breakthrough Initiative, the government will invest $523.2m to support domestic battery manufacturing. Approximately $185m in loans has already been conditionally approved to help South Australian-based Renascor Resources fast-track the development of stage one of its Siviour Graphite Project, which will mine and purify graphite for use in lithium-ion batteries.
  • Quantum: Australia will invest $940m in Silicon Valley start-up PsiQuantum to support its plans to build the world’s first commercially useful quantum computer in Brisbane.

Instant Asset Write-Off Scheme extended

Small businesses will be happy to hear the scheme has been extended for another year.

Businesses with a turnover of less than $10m will be immediately able to deduct the total cost of eligible assets costing less than $20,000 that are first used or installed for use by 30 June 2025.

The asset threshold applies per asset, meaning small businesses can instantly write off multiple items under the scheme.

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

Energy bill relief

With the rising energy costs, the Budget promises relief in the form of $325 rebates for around one million small businesses.


To modernise and digitise industries, a National Robotics Strategy will be released to promote the responsible production and adoption of robotics and automation technologies for advanced manufacturing in Australia. However, the Budget does not detail what this strategy will contain.

Extra support for small business owners

The Budget allocates $10.8 to deliver tailored, free, and confidential financial and mental well-being support for small business owners. It also includes $10m to provide additional support for small business employers administering the Paid Parental Leave scheme.

Building careers in advanced manufacturing

The government will invest $55.6m to establish the Building Women’s Careers program, which will support women’s participation in key industries, including clean energy and advanced manufacturing.

It will also expand eligibility to the New Energy Apprenticeships Program to include work in the clean energy sector, including advanced manufacturing. This will provide access to $10,000 incentive payments.

Supporting trade and exports

Australia recently celebrated 50 years of partnership with the Association of South-East Asian Nations (ASEAN), and this budget doubles down on the relationship by committing $505.9m to deepen ties with the region. This could spell good news for manufacturers looking to export to SE Asia.

The government is also expanding the Australia-India Business Exchange (AIBX) to diversify trade and help more Australian businesses build commercial ties with India and across South Asia. An additional $2m will also support Australian agricultural exporters entering Chinese markets.

Recognising that overseas trade is complex, the government will provide $29.9m to co-ordinate trade simplification and $10.9m to enhance the Go Global Toolkit to support exporters.

A new era for manufacturing?

It’s too early to tell whether this year’s federal Budget will herald a new era for Australian manufacturers, but there’s no doubt that investments in renewable energy, lithium and critical minerals will impact Australia's future. Now, we'll just have to watch and see how it rolls out in practice.