Coming Soon: No Queensland State Government Grants

Grant programs and government elections have a complex relationship. It’s important for Australian businesses to understand how elections impact grant funding availability so that they can plan accordingly. Provided below is our analysis and observations of how the election cycle can impact the grant funding landscape, in particular the ‘feast and famine’ effect that an election creates in terms of the availability of government funding for companies.

The feast

In our experience, election cycles typically result in a crescendo of grant opportunities in the months leading up to election day. Federal and State governments are both guilty of perpetuating this approach and the logic is pretty simple. Politicians love a hard hat, high-vis and the opportunity to spruik their financial investment in a major industry-led project. Contributing to projects that create new jobs, improve sustainability or promote other transformational outcomes is great for the résumé of the incumbent government and provides good news story opportunities as an election approaches.

Savvy businesses should be aware of the timing of the State and Federal elections and understand that there are increased chances of funding being available in the lead up to an election. Elections provide greater opportunities to secure government funding if there are suitable projects being planned.

The famine

Unfortunately, elections also have a habit of triggering a Chernobyl-style grant fallout with grant programs becoming unavailable for many months, commencing with the pre-election caretaker period and extending through to a period post-election (sometimes up to 12 months following establishment of the new government).

For those unfamiliar, Australian government elections typically involve the adoption of caretaker conventions with the government entering a period termed ‘caretaker mode’ in the month prior to election day. During this time, the incumbent government refrains from decisions that will bind the new government. As a result, grant programs are put on-hold, including any that are in progress.

In addition, post-election there is typically an extended program and policy review period, particularly in situations where there has been a change in government. All bets are off in such instances with programs not guaranteed to return following these reviews which often involve assessing where money is best spent for the next government cycle. This can last 12 months or more.

Recent examples

Another unfortunate impact of an election is that it can create tremendous uncertainty for any grants that are pending assessment, or even those tentatively approved but not signed, sealed and delivered pre-election.

There are several recent horror stories at both State and Federal level of companies submitting applications, and even securing approval, only for an election and government change resulting in the withdrawal of the promised funding. Below are two very recent examples:

• In March 2022, in the lead up to the Federal Government election, a total of 17 grants were announced as part of the Morrison Coalition government’s Modern Manufacturing Initiative Collaboration Stream. However, grant agreements were not finalised prior to the election and caretaker period in May 2022. The new Labor government reviewed the funded projects and ultimately cancelled eight of these 17 grants, withdrawing $442mill of funding that had been announced pre-election.

• The NSW State Government election on 25 March 2023 resulted in numerous grant programs being put on-hold and ultimately being withdrawn in the months following the election. This was despite grant applications being accepted and assessments in progress prior to the election. One of the programs impacted was the $30mill Future Industries Investment Program which was withdrawn following completion of a two-stage application process that commenced in December 2022, well in advance of the election. Compounding the frustration of applicants, it took until November 2023 - 7 months following the election - for the new NSW State Government to formally communicate that the assessment process would not be completed and to confirm that the program would be discontinued.

Queensland Election Impact

The Queensland State Government election will be held on Saturday 26 October 2024. Following recent changes, the election cycle is now set at 4 years. Caretaker mode will commence from 1 October 2024.

The last 6 months has seen the standard ramping up of grant opportunities available to Queensland businesses. Many of these programs are now closed, with applications assessed and grants already allocated. However, there are a handful of programs that remain open. In fact, several popular manufacturing focused grants have been reopened in the last few weeks despite the imminent election, including:

• Made In Queensland, Round  7 – applications opening from 24 September through to 24 January 2025,

• Manufacturing Hubs program, Round 4 – applications opening in September through to 30 June 2025.

While these funding opportunities might be a great fit for your upcoming projects, it’s important to learn lessons from the recent elections and remember the impact that the imminent election might have on these programs.

In our view, there is no discernible advantage to justify preparing and submitting an application pre-election for any Queensland government grant programs that remain open. The majority of currently available programs are not first come first served. It would now be impossible for any assessments to be completed and funding agreements struck before caretaker mode commences on 1 October.

Our recommendation is to avoid frustration and wait for the election dust to settle. A change of government is currently an odds-on favourite. This would almost certainly result in a review of funding programs and see the recently opened manufacturing grant programs put on-hold indefinitely (and potentially not reinstated).

Businesses that understand the impacts of election cycles on grant funding availability can avoid frustration and wasted effort on pursuing programs that have no chance of being concluded before an election. They can also be better positioned to plan for and capitalise on the uptick in grant opportunities when this part of the cycle occurs.

Reach out to our team if you have any questions, or if you’re keen to take your government grant strategic planning to another level.