Melbourne’s North Innovation and Investment

Fund

Guide for Applicants

July 2013

Table of Contents

1 Introduction............................................................................................1

2 Overview of MNIIF..................................................................................1

3 Purpose of the MNIIF..............................................................................1

4 Funding under the MNIIF........................................................................2

5 Overview of Application Requirements and Procedures..........................3

6 Eligibility.................................................................................................36.1 Applicant eligibility..........................................................................................................36.2 Project eligibility..............................................................................................................4

7 Applying for funding...............................................................................57.1 Application form..............................................................................................................57.2 Submitting your application.............................................................................................67.3 Acknowledgement of applications...................................................................................6

8 Assessment and decision process............................................................78.1 Assessment process.........................................................................................................78.2 Final decision...................................................................................................................9

9 Announcement.......................................................................................9

10 Managing the funding.............................................................................910.1 Agreement process for successful applicants..................................................................910.2 Agreement obligations..................................................................................................1010.3 Document retention......................................................................................................1010.4 Grant payments.............................................................................................................1010.5 Varying the agreement..................................................................................................11

11 Other issues..........................................................................................1111.1 Privacy and confidentiality.............................................................................................1111.2 Incomplete and misleading information........................................................................1111.3 Feedback........................................................................................................................12

APPENDIX 1 ......................................................................................................13Definition of key terms used in this Guide...............................................................................13

APPENDIX 2 ......................................................................................................15Map of Melbourne’s North Innovation and Investment Fund Region......................................15

1 IntroductionThis Guide for Applicants is designed to assist prospective applicants in deciding whether to apply for a grant under the Melbourne’s North Innovation and Investment Fund and to outline the processes for the submission and assessment of applications. It sets out the purpose of the program and explains who is eligible to apply, how to obtain an application form, how applications are assessed, and the evaluation criteria that will be used in assessing applications for funding.

Applicants can refer to Appendix 1 for definitions of key terms that are bolded in this Guide.

Prospective applicants are advised to read this Guide thoroughly and in its entirety before preparing an application.

2 Overview of MNIIFThe Melbourne’s North Innovation and Investment Fund (MNIIF) gives effect to an announcement by the Australian and Victorian Governments on 23 May 2013 to provide funding support to regions affected by Ford Australia’s announcement that it will cease its vehicle and engine manufacturing operations in Australia from October 2016. Funding over the three financial years from 2013-14 to 2015-16 will be provided to the Melbourne North region (as well as the Geelong region) in recognition of the economic and social impact of Ford Australia's announcement on those communities.

The Australian Government will contribute $30 million; the Victorian Government $9 million; and Ford Australia $10 million. Of this total of $49 million, $24.5 million will be made available to the MNIIF and $24.5 million will be made available to the Geelong Region Innovation and Investment Fund.

3 Purpose of the MNIIFThe MNIIF will support investment by business leading directly to new sustainable jobs in the Melbourne North region to assist the region to diversify its economic base. Eligible projects will focus on encouraging new investment to create new or additional business capacity that results in sustainable jobs.

Applications for funding under the MNIIF are encouraged from all industry sectors.

Applicants should note that proposals will not be favoured where they involve no sustained net increase in economic activity in Australia or where new jobs in the Melbourne North region are created at the expense of jobs elsewhere.

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4 Funding under the MNIIFA total of $24.5 million in funding is available. There will be competitive funding rounds and all funds awarded must be expended by 30 June 2016 when the Fund will close.

The minimum grant under the MNIIF will be $50,000. There is no maximum grant limit within the total grant funding available under the MNIIF. Grants will be up to 50 per cent of eligible expenditure.

Financial assistance will only be provided for: up to 50% of projected eligible project costs ; and on the provision of satisfactory evidence that the agreed payment milestones have been

achieved.The following conditions will apply to funding investment proposals:

applicants must be able to provide documentary evidence that demonstrates they can fund the costs of the project not met by the funds being sought under the MNIIF;

a minimum cash commitment by the proponent, exclusive of in-kind components, which at least matches the total amount of government grant available under the Fund;

the government grant will be calculated to take account of funding provided under other applicable government programs so that:(a) a genuine contribution of at least 50 per cent is made by the applicant; and (b) MNIIF funding is not being leveraged by other government funding.

Successful applicants will be required to enter into a MNIIF funding agreement (see also section 10 of this Guide) and funded projects must be completed no later than the project completion date that is specified in the funding agreement. Eligible project expenditure must be incurred on or before the project completion date (with the exception of final audit costs which can be incurred within three months after the project completion date).

Grants may be subject to GST and income tax. AusIndustry advises that successful applicants should seek advice on these and other tax implications from their tax advisers or the Australian Taxation Office (http://www.ato.gov.au or phone 13 28 66).

In exceptional circumstances, AusIndustry and the Victorian Government Department of State Development, Business and Innovation may consider applications for funding that are received outside of a funding round. The decision to accept applications outside of a funding round will be made jointly by AusIndustry and the Victorian Government Department of State Development, Business and Innovation. In such circumstances, any application for funding will need to meet all eligibility criteria, as well as be considered of high merit against the project merit criteria. Also, applicants will need to demonstrate that their proposal would be unable to proceed or likely to be significantly impacted if the assessment of the application is deferred to the date of the next funding round.

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5 Overview of Application Requirements and ProceduresApplications will be invited through funding rounds which will be advertised by AusIndustry.

To be eligible for consideration under Round 1, applications will need to be received by AusIndustry by 5:00pm AEST on Thursday, 26 September 2013.

Intending applicants are encouraged to critically assess the prospects of meeting the eligibility requirements and the project merit criteria before committing significant resources to developing a proposal.

AusIndustry and the Victorian Government Department of State Development, Business and Innovation may provide advice during the application period to assist those intending to apply. This advice is limited to providing clarity with regard to the eligibility requirements and assessment process. It is strongly recommended that this assistance be utilised at an early stage, and no later than 10 working days prior to the closing date.

Applications will be assessed against the eligibility requirements and the project merit criteria specified in this Guide.

Applicants must use the application form that is available through AusIndustry.

Joint applications are acceptable, provided they have a principal applicant who is an eligible applicant.

6 EligibilityIn order to apply for MNIIF funding, an applicant must demonstrate that:

they are an eligible applicant; the proposed project is eligible; and the proposed project costs for which funding assistance is sought are eligible.

6.1 Applicant eligibilityTo be an eligible applicant, the applicant must:

(a) engage in trading or financial activities that form a substantial or significant proportion of its overall current activities;

(b) be a non-income-tax exempt entity incorporated in Australia under a law of the Commonwealth or of a State or Territory;

(c) have an Australian Business Number (ABN);(d) be registered for the Goods and Services Tax (GST);(e) be able to issue tax invoices; and(f) commit to contributing a minimum of 50 per cent of the overall eligible project costs

(exclusive of in-kind contributions) from non-Government funding.

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Entities not eligible to applyThe following are ineligible:

a) individuals and partnerships;b) trusts; however, an incorporated trustee can apply on behalf of a trust provided that the

Commonwealth is satisfied that the incorporated trustee will remain sufficiently liable for the performance of any agreement it signs;

c) Commonwealth, State and Local Government agencies and bodies (including government business enterprises);

d) entities that do not comply with State or Commonwealth law, including the Equal Opportunity for Women in the Workplace Act 1999 (Cth); or

e) Ford Australia and its related companies.

6.2 Project eligibilityTo be eligible, a project must:

a) involve at least $100,000 in eligible expenditure; b) generate sustainable new jobs in the Melbourne North region and not involve the

movement of business activity from other areas of Australia to the Melbourne North region;c) demonstrate that any activities to be continued after the project completion date can be

undertaken without any further grant funding; andd) be consistent with Australia’s international obligations, including under the World Trade

Organisation.

In addition:

Projects focussed on current job retention will not be supported. Funding for projects under the program must not be leveraged by any other government

funding (Commonwealth, State and/or Territory governments). Funding will not be provided for retrospective activities except in special circumstances

with the agreement of the Program Delegate.

6.3 Eligible ExpenditureEligible expenditure includes:

acquisition of new equipment or machinery that can be capitalised in the applicant’s accounts; and

construction or fit-out of a new building or extension to premises.

Project management and direct labour costs associated with the above are eligible but only where expenditure is incurred on directly implementing and/or commissioning the agreed project and where the expenditure is directly attributable to the project and is not part of existing management, executive or ongoing operational costs. Generally these expenses would be no more than five per cent of a project’s total value.

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6.4 Ineligible Expenditure

The following activities and items are not eligible expenditures:

(a) the acquisition of land and/or property leasing or rental costs; (b) preparing the grant application, any project variation requests and any project reports

(except the costs of independent audit reports)(c) full scale production and inventory costs;(d) all forms of advertising and the production of promotional material;(e) establishing general infrastructure or obtaining resources used on the project—such as

interest on loans, job advertising and recruiting;(f) general business management and administration not directly related to the eligible

project;(g) website development (unless the web site is part of the value proposition of the project);(h) prospecting, exploring or drilling for minerals, petroleum or natural gas for the purpose of

discovering deposits, determining more precisely the location of deposits or determining the size or quality of deposits; and

(i) opportunity costs relating to forgone production and production downtime arising from the allocation of resources to the agreed grant project.

(j) research or scoping activities;(k) ongoing or routine business costs, including administrative, operational and maintenance

costs and employee salaries and wages;(l) retrospective activities; (m)activities that breach occupational health and safety or public safety; and(n) other ‘in kind’ contributions.

This list is not exhaustive. AusIndustry may issue further guidance setting out the types of expenditure that are eligible or ineligible under the MNIIF.

7 Applying for funding

7.1 Application formApplicants must submit their MNIIF application on the AusIndustry form, which is available to be downloaded at www.ausindustry.gov.au. For any queries relating to access of the Word fill-able application form, please contact the AusIndustry Hotline on 13 28 46, or send a query to VICIIF@innovation.gov.au .

To allow AusIndustry’s analysis of a MNIIF proposal to be as complete as possible, the following information should be provided:

For existing entities, the applicant's three most recent audited financial statements. These financial statements will be required to include income statement, balance sheet, statement of equity, statement of cash flows, notes to financial statements, signed director's report, and signed report of the auditor. If the applicant is unable to provide the above information please contact AusIndustry for advice.

If an existing entity is not required to lodge financial reports with the Australian Securities Investment Commission, contact should be made with AusIndustry for advice.

For new entities, contact should be made with AusIndustry for advice.

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Additional documented supporting evidence should include: a business plan for the investment proposal, where available; evidence of financial contributions or investor support or interest in the proposal; a letter of support from a financial institution (if applicable); details of construction arrangements, contracts and contractors (if applicable); evidence of the prospect of firm contracts for the sale of the goods or services, or

documented evidence of an achievable marketing plan; and additional information that may be relevant such as economic studies or environmental

impact statements.

If uncertain of the relevance to the application of documented supporting evidence, applicants should contact AusIndustry for guidance.

The first round of the MNIIF closes to applications at 5:00 pm AEST on Thursday, 26 September 2013.

Additional information concerning the MNIIF can be obtained from the AusIndustry website at www.ausindustry.gov.au, from the AusIndustry Hotline on 13 28 46 or VICIIF@innovation.gov.au .

7.2 Submitting your applicationCompleted applications under the MNIIF must be submitted by 5:00 pm AEST on Thursday, 26 September 2013 electronically by e-mail to VICIIF@innovation.gov.au or on a CD, along with a signed hard copy posted to:

Melbourne’s North Innovation and Investment Fund AusIndustryGPO Box 85MELBOURNE VIC 3001

7.3 Acknowledgement of applicationsAn AusIndustry Customer Service Manager will send a letter acknowledging receipt of all applications. If an application is incomplete or the applicant ineligible, an AusIndustry Customer Service Manager will discuss this with the contact person responsible for lodging the application.

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8 Assessment and decision process

8.1 Assessment processEligible applications for MNIIF grant funding will be assessed on a competitive basis relative to the merit of other applications received in a particular funding round against the project merit criteria. Applications deemed ineligible will not be assessed.

Applications will be assessed in a three-stage process.

Stage One – Eligibility Assessment

AusIndustry will assess each application in terms of its eligibility. If an application is deemed ineligible, the applicant will be notified and the application will not progress any further in the assessment process.

Stage two – Project Assessment

AusIndustry and the Victorian Government Department of State Development, Business and Innovation will jointly assess each application on its strengths and weaknesses against the project merit criteria.

As part of the assessment process, applicants may be required to submit additional information to support their applications. In assessing applications, AusIndustry and the Victorian Government Department of State Development, Business and Innovation may also seek additional information from:

other Australian Government agencies; State or Territory government agencies; local governments; or any other appropriate agencies or persons that AusIndustry or the Victorian Government

Department of State Development, Business and Innovation considers necessary to assess an application.

AusIndustry will submit an assessment report of all eligible applications to the MNIIF Advisory Committee for the third stage assessment.

Stage Three: Advisory Committee Review

The MNIIF Advisory Committee will review the assessment report and the application and make recommendations for funding to the Minister and the Victorian Minister for Manufacturing.

The MNIIF Advisory Committee’s recommendations will include which projects should be funded and the level of funding that should be provided to each project.

Applicants should note that irrespective of eligibility and merit there is no guarantee that an offer of funding will be made.

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AusIndustry will manage potential and actual MNIIF Advisory Committee member conflicts of interest through a conflict of interest process that requires declaration of any conflict of interest by MNIIF Advisory Committee members and exclusion of that member(s) from the application assessment if the Program Delegate determines that the conflict of interest is material.

8.1.1 Assessment criteriaEligible applications for MNIIF grant funding will be assessed on a competitive basis relative to the merit of other applications received in a particular funding round against the following criteria:

a) The level of net economic benefit the proposed project will bring to the Melbourne North region, including:

o The number of sustainable, new jobs generated through the project; o The contribution of the project towards the diversification of the region’s economy;

ando the extent of new innovation, including new technology;

b) The demonstrated capacity of the applicant to successfully undertake the project outlining the skills, experience and resources to which it will have access;

c) The demonstrated capacity of the applicant to provide matching funding for the project. Applicants must be able to demonstrate commitment to a project, contribute at least 50 per cent of the overall project costsand show that the project is free of other concurrent government funding;

d) Sustainability of the project to continue after its completion date over the longer-term without the need for ongoing Government support; and

e) The value for public money offered by the project as measured by the extent to which the project would be unlikely to proceed without funding support.

All applications will be assessed against the merit criteria using the following scoring:

Project Merit Criteria Score

(a) The level of net economic benefit 40(b) Demonstrated capacity and capability of the

applicant to undertake the project successfully15

(c ) Demonstrated capacity to provide matching funding

15

(d) Sustainability of the project to continue after its completion date over the longer term without the need for ongoing Government support

15

(e) Value for public money as measured by the extent to which the project would be unlikely to proceed without funding support

15

Applications must score highly against each merit criterion to be recommended for funding.

A competitive application must address each merit criterion to make the best possible case for funding. Claims made against each criterion must be substantiated and full details of all underlying risks and assumptions should be clearly stated.

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Innovative manufacturing projects and in particular those projects that provide new job opportunities for ex-Ford / automotive supply chain workers, will attract additional weighting in the consideration of the criterion 8.1.1(a) above.

Assessments will also take into account the extent that eligible projects might compromise competitive neutrality. Where government funding for a project is judged that it might demonstrably compromise competitive neutrality (because it would be likely to reduce the competitiveness of other participants in the same market as the funding recipient), the project is unlikely to be supported for funding unless it can be demonstrated that the benefits of the grant assistance will outweigh the costs.

While grants will be up to 50% of eligible expenditure, applications that demonstrate a higher level of investment in relation to the grant sought will be favoured.

8.2 Final decisionThe Minister, in consultation with the Victorian Minister for Manufacturing, will make the final decision as to whether an application will be funded under the MNIIF.

Successful applicants will receive a written offer of assistance and will have 30 calendar days to execute a funding agreement from the date the offer is made. Failure to execute a funding agreement in this time may result in the offer being withdrawn.

AusIndustry will notify unsuccessful applicants in writing, providing details of the reasons for the MNIIF Advisory Committee's recommendation.

If applicants have been judged to have been unsuccessful, they may re-submit an application in later funding rounds addressing the concerns raised by the MNIIF Advisory Committee. If the re-submitted application is eligible, it will be assessed on a competitive basis relative to the merit of other applications received in that round against the project merit criteria.

AusIndustry may refuse to accept a new application if it is substantially the same as a previous ineligible or unsuccessful application.

9 AnnouncementThere will be public announcements of successful applicants. Prior to each announcement, successful applicants will be notified of the outcome of their application. The public announcement may include details, on an individual basis, of the applicant, the value of the grant and the purpose of the grant.

10 Managing the funding

10.1 Agreement process for successful applicantsEach successful applicant will be required to execute a single funding agreement with the Commonwealth and the Victorian Government. This agreement will reflect the project and the

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funding that has been approved and the financial assistance will only be made in accordance with the provisions of this funding agreement.

Until a valid funding agreement is executed, the applicant will not be reimbursed for any project costs incurred before the approved project start date. No funding will be paid until the agreement is executed.

10.2 Agreement obligationsApplicants will be required to report to AusIndustry on the progress of projects, addressing performance and expenditure as specified in the funding agreement, as well as provide evidence that it has progressively matched the grant funds.

Grant funds will be paid in stages depending on the size of the grant approved. An agreed proportion of the funding may be paid on execution of a funding agreement. Each subsequent payment of funds will then be made upon provision of satisfactory evidence that the agreed milestone(s) for that payment has been achieved.

On completion of the projects, before the final grant payment is made, and within three months after the agreed project completion date, applicants will need to provide:

an independent audit certificate covering all project costs, and a final project report.

The purpose of the audit certificate is to ensure grant funds and applicants’ matching financial contributions were expended on the approved project.

The Commonwealth is empowered to recover grant funds in circumstances where the applicant has acted in a manner to reduce the benefits that were expected to be generated by the project.

10.3 Document retentionIt is a condition of being paid a grant under the MNIIF that successful applicants retain all documents and records in relation to the application for a period of seven years after the completion of the project. While such records do not need to be submitted with reports, AusIndustry may require such records to verify any or all eligible expenditure.

Failure to provide such records when required may result in an expenditure item being disallowed, or in certain circumstances, the repayment of grant funding.

10.4 Grant paymentsProgress payments will be paid, subject to the following:

satisfactory progress against project milestones; satisfactory evidence of eligible expenditure; and AusIndustry being satisfied that the various matters described in the general conditions of

the funding agreement have been met.

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10.5 Varying the agreementIt is recognised that unexpected circumstances can occur within a project life cycle. If this occurs, grant recipients need to apply to the Program Delegate for a variation to the funding agreement in accordance the requirements of that agreement.

11 Other issues

11.1 Privacy and confidentialityApplications will be treated as ‘commercial-in-confidence’ but applicants should note that the application will be reviewed by both the Australian and Victorian governments.

AusIndustry regards the information contained in applications as private and confidential and treats it as such. It is subject to the operational need to provide applications to assessors, and any statutory or legal requirements to provide information to Parliament and other organisations, for audit, law enforcement, investigative or other ordered purpose. The use and disclosure of information provided by applicants for the MNIIF is regulated by the relevant provisions and penalties of the Public Service Act 1999, the Privacy Act 1988, the Freedom of Information Act 1982, the Crimes Act 1914 and general laws of the Commonwealth of Australia.

As part of the assessment of an application, AusIndustry and the Victorian government may need to consult with, and provide material from the application to, other government agencies or bodies, other organisations and/or relevant individuals, in order to substantiate any claims or statements made in the application form, or to otherwise assist in the assessment of the application. If this occurs, AusIndustry will endeavour to ensure that the parties who are consulted observe appropriate confidentiality provisions.

Following approval of an application, the broad details of an application (for example, the identity of the successful applicant, the grant amount and a brief description of the project) may be disclosed by AusIndustry or the Department for purposes such as promoting the program and reporting on its operation and policy development. This information may also be used in answering questions from the Parliament and its committees.

The Department will report details regarding the award of each grant on its website. The details that the Department is required to publish on its website are set out in Finance Circular 2013/02: Australian Government Grants: Briefing and Reporting available on the Department of Finance and Deregulation website at http://www.finance.gov.au/publications/finance-circulars/index.html#fc2013.

11.2 Incomplete and misleading informationIf an application is incomplete or contains information that is considered misleading or inaccurate, it may be excluded from consideration for funding.

It is an offence to provide false or misleading information to the Commonwealth. AusIndustry will refer for investigation, with a view to prosecution under Commonwealth criminal law, any information provided that is considered intentionally misleading or inaccurate.

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11.3 FeedbackThe AusIndustry customer service charter outlines AusIndustry’s commitment to improving service delivery. It sets out the service standards that AusIndustry aims to meet and how applicants can help AusIndustry to deliver better services. A copy of the charter is available at www.ausindustry.gov.au.

AusIndustry conducts customer satisfaction surveys through which feedback from applicants and recipients of assistance is used to improve our business operations and our service.

For complaints, the AusIndustry Hotline is the first point of contact. The Hotline directs complaints to the appropriate manager, who will follow up to ensure the matter is resolved. Contact the AusIndustry Hotline on 13 28 46 or email hotline@ausindustry.gov.au.

If not satisfied with the complaint resolution procedure, contact:

Head of DivisionAusIndustryGPO Box 9839CANBERRA ACT 2601Telephone: (02) 6213 7324Facsimile: (02) 6213 7344

Another option for complaints is to contact the Commonwealth Ombudsman. There is no fee for making a complaint, and the Ombudsman will conduct an independent investigation of concerns. Note that the Ombudsman usually prefers complainants to first work through the relevant internal processes before complaining about a decision. Contact details are:

Commonwealth OmbudsmanTelephone: 1300 362 072www.ombudsman.gov.au

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APPENDIX 1

Definition of key terms used in this Guide

Competitive neutrality Competitive neutrality can be compromised if it can be shown, for example, if taxpayers are subsidising one participant in a market thereby reducing the competitiveness of other participants.

the Department The Australian Government Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education.

Eligible expenditure Suitable project costs, incurred by the applicant in relation to the project that may attract grant funding under the MNIIF. See section 6.3 of this Guide for more information.

Funding agreement A legal contract between a successful applicant and the Commonwealth of Australia and the Victorian Government. It sets out the project milestones and the grant recipient’s compliance and reporting obligations. See section 10 of this Guide.

Innovation Innovation encompasses a product, process or method that is either new, or significantly improved, to the business, industry sector, or global market.

Melbourne North region The Melbourne North region is defined as the four Local Government Areas Hume, Whittlesea, Moreland and Darebin as shown in the map at Appendix 2.

MNIIF Advisory Committee A Committee appointed, for the purposes of the MNIIF, to review the AusIndustry assessment report of eligible applications and make recommendations for funding under the program. The Committee will comprise an independent chair (a person with sound business credentials and a history of involvement in Melbourne’s North); a second business representative; an Australian government representative and a Victorian government representative.

the Minister The Minister for Innovation, Industry, Science and Research

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Program Delegate An employee of AusIndustry, a Division in the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, who has been empowered by the Minister, or is otherwise duly authorised, to carry out the relevant functions in respect of the MNIFF.

Project merit criteria The set of criteria that have been established to evaluate the strengths and weaknesses of eligible applications under the MNIIF. See section 8.1.1 of this Guide for more information.

Retrospective activities Activities will be judged to be retrospective if they have occurred prior to the execution of a Funding Agreement between the Commonwealth and the successful applicant.

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APPENDIX 2

Map of Melbourne’s North Innovation and Investment Fund Region

Created using ABS Census Table Builder; with the blue shading indicating the Local Government Areas of Hume (C), Whittlesea (C), Moreland (C) and Darebin (C)

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