Export Market Development Grants
The EMDG scheme helps export-focused small and medium-sized Australian businesses become sustainable exporters by providing partial reimbursement of certain export promotion expenses.
Businesses with approved grants of up to $27,500 will receive the full value of their EMDG claims. Applications for grants in excess of $27,500 are expected to be paid at the rate of between 45 and 65 cents in the dollar on the balance of claims above $27,500.
These payment amounts are the result of strong demand for this popular program and a finite pool of funds.
"To help exporters deal with the aftermath of the financial crisis the Government provided an extra $50 million in additional funding in each of the past two financial years," Ms Elliot said.
"However, in keeping with the Government's commitment to return the Budget to surplus, total funding for the EMDG scheme has returned to its historical average."
Today the Hon. Stephen Smith, Federal Labor Minister for Foreign Affairs and Trade announced the Federal Labor Party’s trade policy should they be re-elected. Below are the main points and click here to download a full copy of the policy brief:
Regrettably there are no new initiatives for Australia's small to medium exporters:
- Trade Agreements:
- Continue to strive for an ambitious outcome for Australia at the WTO Doha Round through action to remove trade-distorting subsidies and non-tariff barriers.
- Work closely with the Australian Services Roundtable to reinvigorate the service negotiations at Doha.
- Finalise Free Trade Negotiations with Malaysia and Korea and commence negotiations with India and Indonesia
- Continue the Trans-Pacific Partnership negotiations with the United States, New Zealand, Singapore, Chile, Brunei, Peru and Vietnam as well as pursuing a FTA with the Gulf Cooperation Council.
- EMDG Scheme:
- Federal Labor retains commitment to EMDG scheme and the five year extension of the scheme.
- The scheme remains capped at $150 million.
- Work with industry to ensure maximise the utility to those who use the scheme within the total funding that is available.
- Trade Finance and Export Promotion:
- Simplifying and expanding the powers of the Export Finance and Insurance Corporation (EFIC) to enable it to more effectively provide financial support to Australian Exporters.
To view a copy of the Australian Institute of Export's response to the EMDG announcement please click here.
At an AIEx event this morning in Brisbane the Shadow Minister for Trade, the Hon. Warren Truss, launched the Coalition Government’s Trade Policy themed – Restoring Support for Australian Exporters.
The Australian Institute of Export demonstrated its’ commitment to the export community by mounting a substantial campaign to Government in 2009 regarding the multi-million dollar shortfall in the EMDG Scheme. This resulted in an additional $50 million being injected into the scheme by the Government.
Today Mr Truss announced the Coalitions’ plans for the future of EMDG along with additional Trade Policy initiatives. Below are the main points and click here to download a full copy of Mr Truss’s speech:
The Coalition understands that trade is the key engine of growth for Australia. One in four jobs in regional Australia is directly or indirectly linked to exports. When the Coalition was last in government, exports from regional Australia grew three times faster than did exports from major cities. About a quarter of regional Australia’s income now comes from exports.
- EMDG Scheme
- A Coalition Government will increase the EMDG cap to $200 million effective from 1 July 2011 restoring the $50 million funding shortfall.
- Furthermore, in government the Coalition will examine the merits of removing the cap altogether.
- Intensifying international trade reform
- The Coalition’s highest trade policy priority remains the Doha negotiations and an outcome that delivers genuine, new commercial opportunities for our farmers, manufacturers and service providers.
- The Coalition will establish the permanent position of Ambassador for Trade Reform to promote further trade reform internationally and coordination at home and continue funding the position of Trade Representative for Australia’s Agricultural Industries.
- Establish the new roles of Trade Representative for Australia’s Manufacturing Industries and Trade Representative for Australia’s Services Industries.
- Seek to negotiate new rules on trade in agriculture that reduce trade distorting practices and improve market access and reduce international barriers for industrial products and the service industry to achieve improved access to overseas markets.
- Pursuit of Bilateral Free Trade Agreements
- The Coalition will re-establish the Trade Advisory Council, abolished by Labor, as the Coalition’s pre-eminent source of advice from the business sector on Trade and Investment issues.
- Devote increased resources to the effective conclusion of high quality and comprehensive FTAs with China, Japan, Malaysia, the Gulf Cooperation Council, the Republic of Korea and Indonesia and explore the feasibility of an agreement on services with the European Union.
- A Coalition Government will support the development of the Trans-Pacific Strategy Economic Partnership Agreement, based on the expansion of the P4 free trade agreement between Brunei, Chile, New Zealand and Singapore. The Coalition views this as a stepping stone to a longer term goal of a Free Trade Area of the Asia-Pacific.
Following yesterday's e-mail regarding the Minister's release. Please find below a copy of the response from the Australian Institute of Export:
Dear Minister
Yesterday we read with dismay that the first tranche of the EMDG scheme will be set at $27,500. Apart from what this will do to exporters and our exports it also raises the issue of how Austrade will cope with handling the many thousands of claims that will now fall into the second tranche and why Austrade continues to promote a scheme that the Government will not fund.
Minister this program works, every piece of research ever done supports that, including studies undertaken by this organisation and the Mortimer Review of Trade Policies and Programs. When most other countries are out there pushing an export led recovery, why is our Government doing the opposite. Exporters in Australia are fighting the GFC and a dollar that remains strong. They contribute extensively to jobs (one job in five is often quoted) and to GDP (22%).
All the export community wants is stability not an EMDG scheme that goes up and down year on year. With that stability will come confidence, spending and growth. Industry accepts the changes you recently put to Parliament on behalf the then Minister, Hon Simon Crean MP. These changes were based on a scheme capped at $200million and indexed.
Sadly the budget sits at $150million. What’s worse of course is that this year we have the old rules and $150million....the outcome for exporters will be disastrous.
What industry wants as outlined in the attached is $200milllion for this year and for the same to be put in forward estimates for the next five years.
That will create the stability needed and result export growth.
We urge you to fix this problem now.
Minister, we would welcome the chance to discuss this critical issue with you at the first opportunity.
Regards
Our worst expectations have been realised and the amount for the EMDG budget for next year (Grant year 0910) is $150 million. The AIEx will continue to lobby for additional funding. This wont affect the balance payments for (Grant year 0809) payments and the expectation remains at roughly 60% for (Grant year 0809 paid in 0910 ) balance payments. For next years (Grant year 0910) applications based on $150 million and Austrades expectation of roughly the same number of applications we anticipate a lower first payment and also a low balance payment.
Any opportunity you have to talk to your local politicians about the shortfall in funding will help. We will provide further information as soon as we have anything further to report.
Should you wish to discuss this further please contact Michael Rogers, Chairman, Export Consultants Group - AIEX on Ph: 03 9417 6611 or e-mail: michael.rogers@exportise.com.au
Kind regards
Ian Murray, Executive Director of the Australian Institute of Export said yesterday that he applauded the Governments forecast to be in the black earlier than expected, but making exporters the “sacrificial lamb” was a highly risky way to go. At the top end Mr Murray said the miners are being hit by the super tax, while at the bottom end, the EMDG scheme has been cut by $50M and the funding for Tradestart has been halved.
The successful Export Market Developments Grants Scheme (EMDG) will fall short this year by an estimated $30million and the budget cut will mean that it could be $80M short next year. This, Mr Murray said “will destroy the confidence of SME exporters who will simply stop spending on developing their overseas markets.”
“While Australia may have escaped the impact of the GFC, that’s not the case for exporters” he said. And let’s not forget the impact the dollar is having on remaining competitive. What the industry wants is a scheme that is fully funded. Lift the funding to $200 million where it was last year, instill certainty and build confidence back into a program that every piece of research supports. The Institute urges Mr Rudd to act or Australian exports will suffer well into the future.
To add salt to the wound the Austrade new exporter development program Tradestart has also been chopped in half in this year’s budget Mr Murray said. “It beggars belief that a program that costs so little and delivers so much can be slashed with the stroke of a pen”. “With one in five jobs being export related, the budget should be going up not down.”
To download a full copy of the press release sent by the Australian Institute of Export this afternoon, please
click here
With kind regards
Lisa McAuley
National Events & Membership Manager
Australian Institute of Export
Ph: 02 8243 7400
Fax: 02 9251 6492
Email: lisamcauley@aiex.com.au
Website: http://www.aiex.com.au or http://www.exportawards.gov.au/nsw
Twitter: http://twitter.com/Aussieexport
The Rudd Government will help develop and expand trade and investment opportunities for Australian companies by investing $14.4 million over four years to continue the TradeStart program.
This funding will support a rationalised TradeStart program that will focus on increasing effectiveness through closer collaboration with partners including State and Territory Governments and appropriate industry bodies.
This investment to boost trade and investment opportunities is part of the Rudd Government’s plan to strengthen our economy and secure our future.
TradeStart is an Australian Government initiative, managed by Austrade, that helps small to medium-sized businesses become globally competitive, helping them create community wealth and promote jobs growth.
The TradeStart program was scheduled to conclude in June 2010. From July 2010 the program will continue the identified strengths of TradeStart and will deliver Austrade trade and investment services from a reduced number of locations across Australia.
Supporting this model, there will be continuing use of technology to provide information and advice in all locations. This will support integrated service delivery and improve access for businesses to the range of services offered by Austrade and partner organisations.
The program will provide small and medium business in metropolitan and regional areas with the help they need to compete in international markets.
It will also broaden the focus from pursuing export opportunities to assistance in both trade and investment.
By partnering with organisations like State/Territory Governments and appropriate industry bodies, the Australian Government will provide local companies with on-the-ground support and access to Austrade’s international network of 104 offices in 55 countries.
This article sourced from:www.trademinister.gov.au/releases/
The Minister for Trade Simon Crean today advised that the popular Export Market Development Grants (EMDG) scheme has attracted an unexpectedly high number of applications from Australian exporters this year.
The extra demand demonstrates the success of Australian exporters in weathering the Global Financial Crisis but it also means there is a funding shortfall for larger grant claims.
“We are now faced with a shortfall in funds to cover claims above $50,000”, Mr Crean said.
“The Government has endeavoured to restore the funding future of the EMDG scheme by providing $50 million in additional funding for the scheme in 2008-09 and a further $50 million in 2009-10.
“The additional $50 million funding provided for the scheme for 2009-10 has certainly softened the impact of the significant increase in grant demand on final payment amounts,” said Mr Crean.
More than 5,100 Australian businesses submitted grant applications this year, up 15 per cent compared with last year. The total value of grants claimed also increased significantly, exceeding $269 million, an increase of 20 per cent.
The EMDG scheme is a reimbursement scheme based on expenses incurred in the previous year. The current funding allocations are for expenses in the financial year 2008-09.
Although final payment outcomes for the year won’t be known until Austrade finalises the processing of EMDG applications in June, Austrade estimates that businesses that are approved for grants of up to $50,000 will receive the full value of their EMDG claims.
There are approximately 1,450 companies (30 per cent of grant recipients) likely to be approved for grants in excess of $50,000. These companies are expected to be paid at the rate of between 50 and 70 cents in the dollar on the balance of their claims above $50,000.
“The Government has always been a strong supporter of the scheme, helping Australian exporters deal with the tough global conditions of recent years through injecting an additional $100m funding into the scheme over the last two years.” Mr Crean said.
The EMDG scheme is administered by Austrade and assists export-focused small and medium sized Australian businesses to enter into export and become sustainable exporters by providing partial reimbursement of certain export promotion expenses.
Last night's budget included an announcement that the government would add $50M to the Export Market Development Grant (EMDG) payments for the current financial year. More...
We applaud the Government for providing $50 million needed to top up the seriously under funded Export Development Grants Scheme. Ian Murray Executive Director of the Australian Institute of Export said last night The Minister for Trade Simon Crean has fought a hard battle on behalf of Australias exporters. We thank him for his tenacity and commitment to this important and often forgotten contributor to our economic wellbeing.
This decision by Government to give the scheme additional funds Mr. Murray said is bigger than simply providing some short term relief to exporters. It, demonstrates a commitment going forward which will build confidence in a sector that has been hit hard by the global economic situation. Given international trade will play a major role in the recovery the Government has picked its time to act well he said.
It will also have a positive impact on jobs Mr. Murray said, as its often overlooked that one job in five is export related.
The other thing thats important is that this decision will set a platform for the long awaited response to the Mortimer report on Export Policy and Programs. It gives the Minister the opportunity to put some money behind the announcements he makes.
Special Issue: May 2009
FYI - the following notice has been sent to all EMDG clients expecting a 2nd Tranche payment.
Additional Funding for the Export Markets Development Grants scheme
Dear Exporter,
We are pleased to inform you that the recent Federal Budget delivered a $50 million boost to the EMDG scheme in 2008-09.
As a result of the increased funding eligible businesses are likely to receive 100% of their second tranche entitlement in June 2009.
For more information you can:
• read the Minister for Trades media release at: http://www.trademinister.gov.au/ or
• visit the Austrade website: http://www.austrade.gov.au/emdgpaymentamounts
Alternatively, you can contact Austrade on 13 28 78 and ask for your local EMDG office.
Australian exporters have been thrown a lifeline from the Government, with Trade Minister Simon Crean reportedly securing an extra $50 million in the budget for the Export Market Development Grants scheme. More....
The Minister for Trade Simon Crean today warned exporting firms to expect lower than anticipated payouts through the Export Market Development Grants (EMDG) scheme, on grants assessed over $40,000, due to a funding shortfall created by the previous Coalition Government.
“The Howard Government allowed this important scheme to be run down and did not provide sufficient funds to cover changes they introduced to the EMDG scheme s eligibility criteria.
“As a consequence we are facing a significant shortfall in funds to cover current applications for expenses incurred in 2007-08,Mr. Crean said.
Companies that applied for grants of up to $40,000 will receive the full value of their claims. This represents more than half, or approximately 2200, of the companies that will receive grants.
There are approximately 1800 companies that applied for grants in excess of $40,000, who are expected to be paid at the rate of 30% to 50% on the balance of their claims above $40,000.
The EMDG scheme is a reimbursement system based on expenses incurred in the previous year. The current allocations are for expenses in the financial year 2007-08. The eligibility rules for this period were set by the Howard Government.
Mr. Crean said the previous Government even changed the rules, in its last 18 months in office, knowing full well it would encourage more people to apply to the scheme, but did not provide extra funding.
“The Howard Government is to blame for this shortfall through its failure to properly fund the scheme,Mr. Crean said.
“The Labor Government has introduced changes which delivered on our pre-election commitments to make the EMDG scheme more accessible, particularly to businesses in the services sector and those based in regional areas.
“In contrast to the previous Government, Labor s changes have been funded by an additional $50 million for next year s EMDG payments. Total funding has been increased from $150 million to $200 million for applications relating to the 2008-09 financial year,Mr. Crean said.
The Hon Simon Crean
MP AUSTRALIAN MINISTER FOR TRADE
With all the noise happening about our Government's multi-billion-dollar proposals to keep our economy afloat, why not rev up the system of grants we've already got that has been designed to assist exports? Read More...
The Rudd Government s EMDG Amendment Bill was passed by Parliament in 2008. The changes under the Amendment Bill apply to applications lodged from 1 July 2009.
This means that eligible businesses incurring expenses for export marketing & promotion in the 2008-09 grant year and intending to apply for EMDG from 1 July 2009 will be able to take advantage of new scheme rules.
The key changes include:
- Increasing the maximum grant by $50,000 to $200,000.
- Lifting the maximum turnover limit from $30 million to $50 million.
- Reducing the minimum expenditure threshold by $5,000 to $10,000.
- Allowing costs of patenting products overseas to be eligible for EMDG support.
- Increasing the limit on the number of grants able to be received by a business from 7 to 8.
- Making the scheme more accessible to services exporters by replacing the current list of eligible internal and external services with a new ‘non-tourism services category which will provide for all services supplied to foreign residents whether delivered inside or outside of Australia to be eligible unless specified in the EMDG Act Regulations.
- Allowing State, Territory and regional economic development and industry bodies promoting Australia s exports, including tourism bodies, to access the scheme.
- Introducing a Net Benefit to Australia test into the scheme.
(Source Austrade)
Also there will be a one off increase to the EMDG pool relating to expenses incurred in the 2008/09 financial year. The pool will increase by $50M to $200M for claims lodged as from 01 July 09.
The changes listed above will not affect expenses incurred in the 2007/08 year.
A $27M oversubscription of the scheme in 2006/07, lead to reduced payments to some applicants. It is likely that similar reductions will occur again for 2007/08 claims which will affect more applicants than previously as the initial payment ceiling amount is now $40K, down from $70K.
Contact us to find out how this or the legislative changes may affect your entitlements
Austrade have confirmed that the initial payment ceiling amount for applicants claiming expenses incurred in 2007-08 (2006-08 for first time applicants) has been set at a maximum of $40,000.
If your provisional grant entitlement is below the initial payment ceiling amount, you will be paid your full entitlement in one payment shortly after Austrade has determined your application.
If your provisional grant entitlement is above the initial payment ceiling amount, you will be paid:
1. part of your entitlement in an initial payment equal to the initial payment ceiling amount shortly after Austrade has determined your application; and
2. a second tranche payment at the end of the financial year
(Source Austrade)
Extracts from the Second Reading Speech by Senator John Faulkner, in regard to the EMDG Amendment Bill which passed the Senate on 19 June 08:
Business has been calling for the changes to the EMDG that are contained in this Bill for some time and we listened to business.
In all likelihood further improvements will be made to the scheme as a result of the work Mr Mortimer and Dr Edwards are doing.
They too are listening to business and their report will lead to further improvements to trade policies and programs.
The Rudd Government is a pro-business government.
I am confident that the amendments contained in the EMDG Amendment Bill 2008 will revitalise the EMDG scheme and will be warmly welcomed by the business community.
But this Bill is not the end of the story on reform and revitalisation of the EMDG scheme.
The business community can be assured that, through the Mortimer Review, every aspect of the Export Market Development Grants scheme will be examined.
We will continue to look for ways to improve the EMDG and other export facilitation programs.
(Source Senate Official Hansard No. 5, 2008 Monday, 16 June 2008)
