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Legislation was passed last week to amend how the Export Market Development Grant (EMDG) will be administered and calculated, draft rules have been released and Administrative guidelines are still being developed.  

Below is a summary of planned changes.

Those of you familiar with the program will be aware that historically you would apply for relevant activity that occurred in the past year. The changes reorient the EMDG to a more traditional grants scheme with upfront funding agreements for eligible exporters.

The key differences in new program are:

1. Likely annual application window will only be 4-6 weeks. In 2021, you can continue to apply under the existing program for export activity conducted in July 2020 – June  2021 and simultaneously under the new program for proposed export activity from 1 July 2021.
2. Applicants will be broken into tiers and those tiers will determine how much funding you are eligible for:
   • Tier 1: New to export – maximum $40,000 each year for two years;
   • Tier 2: Expanding export promotion activity – maximum $80,000 each year for three years;
   • Tier 3: Making a strategic shift – maximum $150,000 each year for three years; and
   • Tier 4: Representative Bodies – maximum of $150,000.
3. Abolition of the export earnings test.
4. Applicants have a financial turnover of less than $20m the financial year before your application.

You can also distinguish which tier your business falls into based on the following:

Tier 1: New to export

This tier will require that you demonstrate that you are ready to export through relevant training or through your understanding of what it takes to export.

Tier 2: Expanding export promotion activity

This tier will require that you demonstrate you have a plan to expand your marketing for your product and that you have already exported your product or service.

Tier 3: Making a strategic shift

This tier will require that you demonstrate you have a plan to expand your marketing for your product by making a strategic shift.

Tier 4: Representative Bodies

This tier will require that you demonstrate you have a plan to market your members products (if you are applying for funding to undertake marketing). Your plan must be for the products your members have a designated connection.

Alternatively demonstrate that you have the skills and experience to train members to become ready to export (if you are applying for funding to undertake training).

Once approved you will enter into an agreement with the government.The agreement will identify:

• What your product is;
• What the purpose of your marketing is;
• How much your grant is for; and
• Potential – individual eligible expenses you agreed you would have.

Approved applicants will need to demonstrate that they have spent money on eligible expenses to support their export plans. The agreement will set out when you get the money. Austrade may ask for information in relation to expenditure to support the milestone payments.

Prime is watching these changes and the associated guideline development closely.

If you would like more information, please contact Stuart Thomson at – stuartt@primefinancial.com.au.

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