Big news for exporters: Export Market Development Grant Scheme to be simplified from July 2021

The Export Market Development Grant (EMDG) scheme will be simplified and reoriented from a scheme providing assistance through reimbursement after expenditure to an upfront grant agreement. This will give eligible exporters funding certainty before they embark on their marketing and promotion activities.

The reoriented EMDG program will maintain features valued by SME exporters and industry bodies, while making it simpler to access.

Unlike the current reimbursement scheme which saw exporters waiting up to two years for payments, eligible SMEs will be able to get upfront funding certainty over multiple years for eligible marketing and promotional activities. EMDG will be changed from a reimbursement scheme to an eligibility-based grants program to encourage export-ready businesses to increase their exports and diversify their markets.

When further details are released – hopefully with the release of the Budget in October – we will be able to better judge the positive and negative impacts of the proposed changes. At a bare minimum the changes will require SMEs to be more proactive in their approach to export grants – applying well in advance of any expenditure. Azure Group will continue advocate for changes to simplify the administration of the scheme and reduce the onerous compliance burden on our clients.

Simplifying EMDG to support Exporters

In the reoriented EMDG program, multi-year grants will be available for eligible SMEs at three stages of their export journey:

• Eligible SMEs who are new to export will be able to access grants totalling up to $80,000 over two years.
• For eligible exporters who plan to expand their presence in current markets or enter new markets, grants totalling up to $240,000 over three years will be available. 
• Finally, those exporters who continue to expand into new markets will be able to access further grants totalling up to $450,000 over three years.

To be eligible for the EMDG program, SMEs will need to be export-ready and have a turnover of less than $20 million, down from $50 million in the existing scheme.

Assistance to industry bodies or alliances will be expanded to encompass both overseas promotion on behalf of members and supporting members to become export ready.

Benefits of these reforms

• SMEs will get early financial assurance about the grant they will receive through upfront funding agreements, allowing them to plan their marketing and promotional activities with certainty.
• Financial assistance will be aligned to the different stages of an SME’s exporter journey – from new to export to expanding into new markets – reflecting that each SME’s export journey is unique, and assistance needs to reflect this.
• Progress through the scheme is based on a business expanding their trade activity and diversifying their markets. Do more – get more. This will help to grow and diversify Australian trade, creating jobs.
• Changes to EMDG will cut red tape and make it easier to access.
• Industry bodies will have access grants to support members become export-ready.

Costs of these reforms

• Depending on the stage of the export journey that Austrade deems appropriate, some SMEs will have a reduced grant entitlement under the new scheme.
• Planning for two years of export marketing expenditure two years into the future may impact the flexibility of SMEs and startups in particular to pivot from existing plans into new opportunities

For more details, check Austrade Fact Sheet.

EMDG Scheme for financial year 2020-2021

Current EMDG scheme arrangements remain in place the 2020 and 2021 financial years.

Have you noticed our #FridayExpertTips... here's one that relates to EMDG Grant

“Many Australian business owners struggle with exporting a product because of the complexities and expense. However, the Export Market Development Grant (EMDG) can help fund your expansion.”

This article is intended to provide general information only, and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances, and assumptions, and its accuracy may be affected by changes in laws, regulations, or market conditions.  Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.