Export grants enhanced in Australia

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Hidden away in the fine print of the Australian Government’s 2006 changes to the Export Market Development Grants (EMDG) scheme is a sensible, but little publicised, simplification.

It involves the extension of the EMDG for a further 5 years – taking the scheme to June 2011. EMDG is very popular with SMEs that know about it – they can get up to $150,000 a year for up to 7 years, AND it helps new exporters when they need help most. Why? Most SMEs have to spend seriously for years to market their product or IP/services overseas before sales and cashflows result. EMDG rebates up to 50 cents in the dollar up to $300,000 (after a $15,000 threshold) on eligible overseas marketing.

Subject to the legislation being passed, the changes apply to claims lodged after June 2007 i.e. for FY 2006/07. The changes also include increasing the daily overseas visits allowance to $300 a day, increased flexibility re emerging industries (e.g. digital content and services) and improved flexibility in Australian content rules. 

But the most significant change hasn’t attracted much attention – the dropping of the export performance test. This means applicants can stay in the scheme even if they have not achieved export sales. The change recognises the reality that establishing export markets takes much longer than domestic markets.

Overall the latest changes should make an already effective scheme simpler and more accessible for SMEs.  Austrade has a budget of $150 million per year to spend on EMDG and has not spent it’s budget in recent years! If a company is spending at least $60 or $70k on overseas marketing in a year, by talking to us may result in a rebate of $20 or $30k. We charge a success fee – there is no additional expenditure involved. Export sales are not necessary – but we need to prove the expenditure is a genuine marketing expense. 

Contributed by Don Greig, EMDG specialist forCanberra lobbyist, Geomentus. Don is a former senior official in Austrade, which administers EMDG.  Go to dkgreig@bigpond.com

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