Australian Government's Industry Growth Program.

The Pause to the Industry Growth Program Creates a Material Gap in Australia’s Commercialisation Pipeline

The Australian Government’s decision to pause the Industry Growth Program to new applications is a significant development for Australia’s innovation, commercialisation and advanced manufacturing ecosystem. While the 2026-27 Budget frames the decision as part of broader portfolio savings and reprioritisation, the practical impact is clear: one of the most important non-dilutive funding pathways for innovative Australian SMEs and startups is currently unavailable to new applicants.

The Industry Growth Program was established to support innovative small and medium enterprises undertaking commercialisation and growth projects aligned with the National Reconstruction Fund priority areas. These priority areas include renewables and low emissions technologies, medical science, transport, value-add in agriculture, forestry and fisheries, value-add in resources, defence capability and enabling capabilities. The program was designed to help businesses commercialise new products, processes and services, improve their ability to enter national and international markets, and position themselves for future investment and scaling opportunities, including through the National Reconstruction Fund.

This matters because the IGP addressed one of the most persistent structural weaknesses in Australia’s innovation system: the gap between successful R&D and commercial scale-up. Australia produces strong science, technical capability and early-stage innovation, but too many companies struggle to secure the funding required to validate products, build manufacturing capability, enter markets, secure customers and scale internationally. The IGP was one of the few national programs specifically designed to support that transition.

The official business.gov.au page now states that the program is “currently paused to new applications”. The same page confirms that the IGP provided an Advisory Service for startups and SMEs and, after receiving advice, eligible businesses could apply for grants of $50,000 to $250,000 for early-stage commercialisation projects or $100,000 to $5 million for commercialisation and growth projects.

This means the pause affects both sides of the program’s architecture: the Advisory Service entry point and the subsequent grant pathway. That is commercially important because businesses could only apply for an IGP grant after receiving an Advisory Service report. In practice, pausing new Advisory Service applications restricts the future grant pipeline as well.

Why the IGP is Strategically Important

The IGP was not a general business grant. It was targeted at innovative SMEs and startups seeking to commercialise and grow projects within NRF priority areas. That made it particularly relevant to companies developing technologies in advanced manufacturing, clean energy, medical science, defence, resources, agriculture, transport and enabling technologies.

Its design was commercially practical. The Advisory Service helped companies test business models, refine commercialisation strategies, consider funding avenues, build networks, address intellectual property issues, undertake market testing and strengthen value propositions. The grant pathway then provided matched funding for projects that could move companies from feasibility, proof-of-concept and prototyping through to market readiness, growth and scale-up.

The grant amounts were also material. A $100,000 to $5 million matched grant significantly changes the trajectory of a high-potential company. For a deep-tech or advanced manufacturing business, that level of funding can support pilot manufacturing, technical validation, regulatory work, customer trials, market entry, production engineering, quality systems, certification and export readiness. These are often the activities that private capital expects companies to de-risk before major investment.

The program also helped bridge the financing gap between early-stage research grants and later-stage institutional investment. Many companies are too commercially advanced for pure research funding but not yet sufficiently de-risked for large-scale equity, debt or project finance. The IGP sat directly in that gap.

The Commercialisation Gap is now Wider

The pause to the IGP is particularly consequential because it comes at the same time as major changes to other parts of the innovation funding landscape.

Budget Paper No. 2 confirms that the Government is returning $800.1 million over five years from uncommitted funding from the Australia’s Economic Accelerator program, plus an additional $1.4 billion from 2030-31 to 2036-37. Those savings are being used to partly fund the Government’s broader “Boosting Productivity - Promoting Research, Development and Innovation” measure.

The Budget also includes reforms to the Research and Development Tax Incentive, venture capital incentives and public science capability. The Industry Minister’s Budget release states that the Government will better target the RDTI from 1 July 2028 by increasing offset rates for core R&D by around 25% to 50%, increasing the turnover threshold for the refundable tax offset, reducing the intensity measure and increasing the maximum expenditure threshold. It also refers to expanded tax incentives for venture capital from 1 July 2027 and a new National Resilience and Science Council to coordinate public innovation investments.

These are meaningful policy measures, but they are not direct substitutes for the IGP. Tax incentives, venture capital reforms and public research agency funding do not provide the same project-specific, commercialisation support as an IGP grant. They support the broader innovation system, but they do not necessarily solve the immediate funding problem faced by SMEs trying to validate, manufacture, sell and scale globally competitive technology.

The Risk for Australian Technology Companies

The immediate risk is momentum loss. For many innovative companies, commercialisation timing is critical. Product development, customer trials, regulatory milestones, manufacturing scale-up and investment rounds are sequenced around specific windows. A pause in funding availability can delay hiring, defer technical work, weaken customer confidence, disrupt investor discussions and slow market entry.

The broader risk is strategic leakage. If Australian companies cannot access credible domestic commercialisation pathways, they may increasingly look offshore for capital, customers, manufacturing partners and headquarters opportunities. That can result in Australian-developed IP, capability and economic upside moving into other jurisdictions.

This is particularly problematic in sectors where Australia has clear strategic interests, including medical science, defence capability, low emissions technologies, critical minerals, food and agriculture, sovereign manufacturing and enabling technologies. These are precisely the sectors the NRF was established to support.

The pause also creates uncertainty for founders, investors, universities and industry partners. Commercialisation requires long-term trust. Companies and partners invest significant time preparing funding strategies, building collaborations, developing budgets, structuring matched funding, validating markets and aligning projects with national priorities. When a key pathway is paused without a clearly articulated replacement, confidence in the policy environment is weakened.

What Should Happen Next

The Government should urgently reopen the Industry Growth Program and provide clear guidance on the treatment of existing pipeline participants. This should include immediate clarity for businesses that have submitted Advisory Service applications, businesses that have received Advisory Reports, businesses preparing grant applications, businesses with lodged grant applications and businesses awaiting funding decisions or grant agreements.

Reopening the IGP is critical because it provides a targeted, merit-based, non-dilutive funding pathway for SMEs commercialising nationally significant technologies in NRF priority areas. While the program could be refined to improve focus, competitiveness and measurable outcomes, it should not remain paused in a way that creates a vacuum in Australia’s commercialisation pathway.

A reopened IGP should continue to prioritise projects with strong evidence of technical differentiation, customer demand, manufacturing capability, private capital leverage, export potential and clear national benefit. It should also retain support for both early-stage commercialisation and later-stage commercialisation and growth, because these are distinct phases with different risk profiles and funding needs. Pausing the program removes one of the few national mechanisms designed specifically to help Australian companies move from innovation to market adoption, scale-up and global competitiveness.

IGP Grant Amounts

You will be connected to an Industry Growth Program Adviser who will provide tailored advice to support your commercialisation and/or growth project. Once you have received this advice, you may also be able to apply for:

• Grants of $50,000 to $250,000 to support early-stage commercialisation projects

• grants of $100,000 to $5 million for commercialisation and growth projects.

Advisory Service (Step 1) - Currently Paused

Overview

The Industry Growth Program will support innovative small and medium enterprises undertaking commercialisation and/or growth projects within the National Reconstruction Fund (NRF) priority areas. Participating businesses will have access to Advisory Services to help them overcome significant challenges that may be associated with their projects. Under the program:

• An innovative product, process or service:

- is new, unique or significantly different to any other previous product, process or service in the market or industry where the product is intended to be sold/traded; or

- involves significant enhancements or developments of current products, processes or services that will enable the business to scale and transform.

Minor changes or improvements to existing products or services are not considered innovative.

• Early-stage commercialisation projects are intended to include the journey from feasibility studies and the development of proof-of-concept through to the production and testing of early prototypes in a simulated or theoretical environment. Testing should validate the commercial viability of the innovative product, process or service. Various scales are typically referenced to demonstrate technology readiness or market readiness, with one example commonly referenced being Technology Readiness Levels (TRLs). As a guide, early-stage commercialisation grant projects are intended to broadly include the journey through TRL3 to TRL6.

• Commercialisation and growth projects are intended to include those that can already demonstrate completion of feasibility studies and proof-of-concept. Projects are intended to include the journey of product, process or service development from early prototyping through to actual application in its final form, and the capability to scale up to full rate production and grow into new markets. Various scales are typically referenced to demonstrate technology readiness or market readiness, with one example commonly referenced being Technology Readiness Levels (TRLs). As a guide, commercialisation and growth grant projects are intended to broadly include the journey through TRL4 to TRL9.

The program targets businesses beginning to, or with the capacity to, scale as described above, but does not include routine business growth.

Participating businesses may also apply for matched grant funding to undertake commercialisation and/or growth projects.

The program will complement the NRF’s mission to drive investment in projects that develop Australia’s industry capability, helping to transform Australia’s industry and economy.

Priority funding areas

The Australian Government’s priority areas for the National Reconstruction Fund and Industry Growth Program:

1. value-add in resources

2. value-add in agriculture, forestry and fisheries

3. transport

4. medical science

5. renewables and low-emission technologies

6. defence capability

7. enabling capabilities.

Eligible entities

You can apply if you:

• have a combined annual turnover of less than $20 million for each of the three financial years prior to the lodgement of the application

• have an Australian business number (ABN)

• are non-income-tax-exempt, and

• are registered for the Goods and Services Tax (GST).

You must also be:

• a company, incorporated in Australia

• a co-operative, or

• an incorporated trustee applying on behalf of a trust.

NOTE: IGP can only accept applications for funding from participants in the program who:

• have a combined annual turnover of less than $20 million for each of the three financial years prior to the lodgement of the application

• have received a report through the program’s Advisory Service (Step 1 of the process)

• own or have access to any Intellectual Property (IP) you need to undertake your early-stage commercialisation project and own or have the exclusive right to commercialise any IP generated from it.

• can provide evidence of your ability to fund at least your share of eligible project expenditure, such as funding strategy and a bank statement or loan agreement. You must provide an accountant declaration that confirms your ability to fund the project.

Haines Consulting Group's Position:

The pause to the Industry Growth Program should be addressed as a priority. Australia needs disciplined fiscal management, but it also needs credible commercialisation pathways for companies developing the technologies that will drive productivity, sovereign capability, exports and high-value employment.

The IGP was one of the few national programs directly focused on helping innovative SMEs move from R&D and prototype development into commercial deployment and growth. Pausing that pathway without a clearly communicated replacement risks widening the commercialisation gap at the exact point where Australia needs to accelerate the translation of technology into globally competitive companies.

If Australia is serious about building a Future Made in Australia, strengthening the National Reconstruction Fund priority sectors and improving national productivity, it must maintain stable, targeted and commercially relevant support for innovation-led SMEs. Research excellence is essential, but research alone is not enough. Australia also needs the policy architecture to help companies manufacture, validate, sell, export and scale.

The IGP pause is therefore more than an administrative update. It is a strategic test of whether Australia can maintain confidence in its innovation system and support the companies capable of converting national capability into global commercial outcomes.

If you need any assistance with your grant submission, please contact us now at info@hainesconsultinggroup.com.au for a confidential conversation.

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Haines Consulting Group is Australia’s leading specialist in securing major non-dilutive funding for Australia’s most ambitious and high-growth ventures. We work with some of the country’s most innovative companies and universities to navigate and win competitive government grants. If you need any assistance with a grant submission, please contact us now for a confidential conversation.

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Source: business.gov.au