Apparently not!

The 2015 review of the EMDG scheme conducted by Mr Michael Lee has provided a written report recommending that the EMDG scheme be continued. Trade Minister the Hon Andrew Robb MP tabled the report , Certainty and Confidence: Exports and Jobs for a Changing Global Economy, in the Parliament today (19 August 2015)

On April 17, 2012 the then shadow Treasurer Joe Hockey told the Institute of economic affairs in London, that “The Age of Entitlement is over” . In February 2014 the National Commission of Audit recommended abolishing the EMDG scheme for Australian exporters. (see Table 8.1) and that funding for Export Market Development Grants cease. (see recommendation 33)

The Key recommendations of the report are:

• That the EMDG scheme be continued, and continue to be administered by Austrade.
• That the ‘sunset’ provisions in the Export Market Development Grants Act 1997 be removed.
• That the budget allocation (in anticipating a 5 per cent annual increase in the number of grant recipients) be progressively increased by $12.4 million per year over the next three years (2016–17 to 2018–19) to $175 million.
• That promotion of the scheme focus on lifting the number of applicants to the 10-year average of close to 4,000 per year in the near term, and on further growing the number of new exporting firms participating in the scheme over the medium term.
• That Austrade assess the long-term value of the EMDG scheme in promoting viable exporters beyond the eligibility period for grants, and report its annual findings to the Minister and industry.

The report describes the key EMDG stakeholders as applicants,
export consultants and Austrade. I would add taxpayers to that list because it is taxpayers who fund the EMDG scheme and ultimately it is they who benefit from the multiplier effect the scheme generates.

KPMG found that each EMDG dollar generates an economic benefit of $7.03 when industry spillovers and productivity gains are taken into account.(see Table 2 page 26) The Export Market Development Grants (EMDG) program effectively redistributes productive resources from Australian taxpayers (including firms) to new and emerging exporters. To the extent that this transfer of resources results in an increase in community welfare than would otherwise be the case, the program can be judged to be efficient.

Given the parlous state of our nation as commodity prices dive and our trade balance grows it is now time for small and medium business to take up the challenge to develop new markets in Asia and beyond and further develop existing markets with continued support from the Australian taxpayer via the EMDG scheme.

It is reasonable that all stakeholders breathe a sigh of relief that this latest review recommends a future for EMDG because the EMDG scheme will underpin the future growth of Australian exports. Given the 180 degree about face there is no doubt that the scheme has both its critics and its supporters. The questions that remain are; will the scheme prevail and what recommendations will government enact.