Government quietly pushes business grants through under the Clean Technology Program which will close factories

The Abbott government has quietly revived grants under the previous government’s Clean Technology Food and Foundries Program, including one grant to Rheem which will be used to close two factories.

The Clean Technology Program was closed in November 2013 to new applications and the Clean Technology Program’s website makes it clear the scheme has been shut down.

“The Australian Government, as part of the commitment to deliver savings by abolishing the Carbon Tax, announced its intention to discontinue funding for the Clean Technology Program,” the website states.

The Clean Technology Program provided around 250 recipients on average about $500,000 in grants before it was closed. Only two recipients received over $9 million, Lion-Beer and Mackay Sugar.

But the program has been partially resurrected, handing out an additional $25 million in grants between January 10 and 14 February 14 this year. 

Of this, $16.4 million went to Graincorp to “consolidate operations and upgrade equipment with new, more energy-efficient equipment.”

The next biggest recipient was Kilcoy Pastoral, which received $1.1 million to “install smart controls and load switching on the refrigeration plants to improve energy efficiency and performance”.

The most controversial allocation is to Rheem, which plans to use its Clean Technology Program funding to close two factories and cut jobs.

Rheem received $1.6 million to “consolidate five manufacturing facilities into three centres of excellence and replace ageing machinery with more energy efficient equipment”. 

Ben Cusack from grants consultancy Bulletpoint told SmartCompany the continued funding was unusual.

“Most grant programs when they are closed generally do not fund any applications still in the system,” he says.

“This is especially so given that there is no income coming in as a result of the carbon tax”.

Gareth Jennings, spokesperson for Rheem, told SmartCompany although the Clean Technology Program was closed Rheem now has a contract that says as it spends its money on the upgrades it has already committed to, the government will co-fund them. 

“I understand there were a range of commitments made by the previous government, and when the new government took power it reviewed all those commitments. I believe decisions were taken with how to proceed with funding from there,” he says.

Jennings says it is likely five Rheem manufacturing facilities will be “consolidated” into three facilities and says jobs will be cut.

“The decisions around what our manufacturing footprint will look like in the future is yet to be completely decided, but at the moment we are looking at centres of excellence,” he says.

A spokesperson for the office of the Industry Minister Ian Macfarlane told SmartCompany funding was allocated to the program under the former government’s Clean Energy Future program.

“The programme closed to applications on 22 October 2013. Applications with an executed funding agreement or funding offer in place prior to that time were funded. No new applications will be funded.”

Angus Trigg, spokesperson for GrainCorp says he is “not aware of the specifics of timing” around the grants.

“All I know is what it relates to,” he says.

“The grant we got is related to the removal of a coal powered boiler at our plant at Murarrie in Brisbane.   Basically we are installing some better technology in Footscray as well.”