Added Certainty for Exporters as Grants Scheme Extended for Five Years

Businesses will be able to plan their ongoing export promotions with greater certainty following the extension of the Australian Government’s Export Market Development Grants (EMDG) scheme until the end of 2010-11.

Acting Prime Minister and Trade Minister, Mark Vaile, said today that the Government will legislate to extend the EMDG scheme for a further five years, after considering a review of the scheme’s operation. (Fact sheet attached)

“In 2004-05, the EMDG scheme delivered 3,277 grants valued at $123.9 million to Australian businesses, Mr Vaile said.

“Of these grants, 77 per cent went to small businesses with annual incomes of $5 million or less.

“Extending the scheme will give greater certainty for Australian exporters, because they can plan their long-term export promotion activities in the knowledge that the EMDG scheme will be there to help.

“The Government will also make a number of changes recommended by the review to make the scheme simpler and more accessible for small business. These include increasing the overseas visit allowance from $200 to $300 per day.”

Subject to the passage of necessary legislation, these changes will apply to EMDG applications lodged from 1 July 2007

The EMDG scheme, administered by Austrade, helps small and medium Australian enterprises start and develop sustainable export markets, by reimbursing up to half their eligible promotional costs above a threshold amount.

“The EMDG scheme makes an important contribution to lifting Australia’s export performance by assisting Australian businesses to lower the costs and risks of getting their products into international markets,” Mr Vaile said.

Contact: Richard Forbes (Ministerial) 02 6277 7420 - Gregory Harvey (Austrade) 02 9390 2703 or 0425 354 972

Export Market Development Grants scheme

Review of EMDG scheme:

The Export Market Development Grants Act 1997 provides a sunset clause, under which the last grants paid under the current scheme will be made in 2006-07.
In 2004, in accordance with this legislation, the Minister for Trade asked Austrade to review the EMDG scheme and to make recommendations about its continuation.
The review took into account the views expressed in 394 public submissions and in meetings with representatives of business, industry associations and government bodies.

Extension of the EMDG scheme:

After consideration of Austrade’s report of its review of the scheme, the Government has decided to accept its recommendation to continue the scheme until the end of 2010-11.
The EMDG legislation will be amended to require another review of the scheme to report to the Minister for Trade by 30 June 2010.

Key changes to the EMDG scheme (to apply from 1 July 2006 i.e. to applications lodged from 1 July 2007, subject to passage of legislation)

increase the overseas visit allowance from $200 to $300 per day
amend the scheme’s rules to provide flexibility in handling emerging export sector applications that do not technically meet the current principal status requirements
improve the scheme’s flexibility and transparency by modifying the current Australian origin rules
make eligible an applicant’s expenses incurred to increase the return on the disposal of intellectual property and know-how to a related company
improve risk management by: separating the overseas representatives and marketing consultants expense categories; capping overseas representatives expenses at $200,000 per annum; and capping marketing consultants expenses at $50,000 per annum
revise the rule covering changes in business ownership
allow Austrade to grant special approval status, including approved body status, for five years rather than three years
ensure that the scheme’s rules clearly set out Austrade’s power to disregard any unsubstantiated, unreasonable, uncommercial or non-bona fide expense claim.

Other changes

The Government will legislate to limit the eligibility of cash payments made by applicants to $10,000 per claim.
The Government will also remove the export performance test from the scheme. This will remove some anomalies, and make the scheme simpler to understand and more accessible for small business.

EMDG funding

The Austrade review report also made findings concerning funding of the scheme which will be considered in the context of the 2006-07 Budget.