Export scheme’s A$60 million boost to power more SMEs into fresh markets

The Export Marketing Development Grant (EMDG) scheme will receive a A$60 million boost over the next three years, following confirmation of the Federal Government’s proposed funding increase.

Announced in April, the additional cash will enable companies to reclaim more of the costs of exploring new markets. Claimable expenses include flights, marketing collateral and digital campaigns.

EMDG is highly popular. In 2018–19, more than 3,900 small and medium-sized enterprises (SMEs) applied successfully for reimbursement of promotional expenses under the scheme. These SMEs generated A$4 billion in exports.

Minister for Trade, Tourism and Investment, Simon Birmingham, says that recent trade deals have improved access to 1.8 billion new customers – and that the EMDG scheme helps SMEs reach them.

‘This funding boost will help Australian companies gain exposure in international markets, allowing them to develop brand recognition and form relationships with potential customers,’ he says.

With rapid growth in Asia-Pacific markets, Australia’s exports are growing quickly. Exports are currently rising by 7.9 per cent per year, delivering a record $22.2 billion surplus in 2018.

You can view Minister Birmingham’s announcement here.

Initial EMDG grants confirmed, second-tranche payments announced

The Export Market Development Grants (EMDG) scheme has assisted over 50,000 Australian small and medium-sized exporters to access international markets for more than 40 years. The popularity of the scheme is an encouraging sign of the willingness of Australian businesses to expand into new markets and leverage free trade agreement opportunities.

Since 2013, the Government has provided two additional funding boosts to the program. This additional funding brings the total scheme appropriation to A$157.9 million, the highest level in almost a decade.

Last year more than 4,000 small and medium enterprises accessed the EMDG scheme, generating exports of A$3.8 billion, and employing over 66,500 Australians.

Initial payment ceiling for 2019–20 (2018–19 grant year) is A$40,000

The Minister for Trade, Tourism and Investment, Simon Birmingham, has determined that the initial payment ceiling for the 2018–19 grant year for the EMDG scheme will be A$40,000.

The initial payment ceiling is the maximum amount paid as a first instalment to reimburse exporters that have made eligible marketing expense claims through the scheme.

An initial payment of up to A$40,000 provides exporters with a reasonable immediate cash flow, while mitigating the risk of demand exceeding available funding.

Recipients who have an entitlement up to and including $40,000 will be paid in full. Those with entitlements above this amount will receive a second tranche payment at the end of June 2020, the size of which will be determined at that time.

The second tranche payout factor in 2019-20 is expected to significantly increase, following the Government’s commitment of an additional A$60 million in the 2019–20 budget.

Second tranche payout factor for 2018–19

The Export Market Development Grants (EMDG) scheme attracted 4019 applications for reimbursement from Australian businesses in 2018–19, the highest number of applicants in nearly a decade.

Businesses entitled to a grant of more than A$40,000 receive the first tranche payment of $40,000 as the claim is approved.

The second and final payment calculation for businesses entitled to a grant of more than $40,000 has been determined. The payout factor for applications received in 2018–19, for expenses incurred in 2017–18 is 24.59 cents in the dollar, following the highest number of applications in nearly a decade.

The level of funds available under the EMDG Act is capped at an annual maximum amount. To ensure each grant recipient receives an equitable share of the total capped funding, the EMDG Act provides a two-tiered grant payment mechanism with some grants paid in two tranches.

The Minister determines the value of the first tranche payment at the beginning of each grant year. As applications are assessed as eligible, they are paid up to the value of this first tranche payment.

For grants assessed in excess of the first tranche payment, the outstanding amount is held as a claim against the funds remaining at the end of the financial year. The remaining funds are then distributed on a pro-rata basis, to a maximum of 100 per cent of the entitlement.

EMDG scores 90% plus in satisfaction survey

Results of a client satisfaction survey of Export Market Development Grants (EMDG) recipients indicate a strong, positive response to the assistance provided by the scheme to Australian exporters.

Commissioned in July 2018, survey results indicate that 94 per cent of respondents considered receipt of a grant an advantage for their organisation.

Meanwhile, 95 per cent said a grant enabled their organisation to become a more sustainable exporter.

Respondents discovered EMDG through a range of sources, including Austrade or the Austrade website (21 per cent), business associates (29 per cent), accountants or other professional services providers (24 per cent) and EMDG consultants (10 per cent).

The survey was sent to 2,941 clients drawn from Austrade’s EMDG database, and recorded a response rate of 11 per cent.

2019 Survey results will be available in October 2019.

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