Funding boost for export scheme
Andrew Robb: Trade and investment are vital for the Australian economy*
The Commonwealth’s Export Market Development Grant (EMDG) scheme is set for a significant funding boost over the next three years, with the tabling of an independent report in Parliament recommending a staged increase of $12.4 million for each of the next three years, to $175 million.
The report, which was commissioned by Trade Minister Andrew Robb and conducted by former Zip Industries chief executive Michael Lee, also proposes the creation of targeted support for high-growth companies, including tech companies and tech-enabled startups.
Mr Lee said the Export Market Development Scheme had been an effective program over many decades, and recommended that the sunset clause written into the scheme’s governing legislation be removed, to give the export sector greater certainty about funding into the future.
The scheme has been given largely bi-partisan support for decades, but suffered cuts under the previous government in 2010. As part of a pre-election pledge, the Coalition restored some funding to the Austrade-managed program and Mr Robb convened the review.
Its report, called Certainty and Confidence: Exports and Jobs for a Changing Global Economy, was tabled in the Parliament today.
“I have seen firsthand the benefits that this modest government support provides to Australian companies at critical early stages in their export journeys,” Mr Lee says in the report’s introduction.
“This 40-year-old scheme remains highly relevant, and continues to bring benefits to Australia by encouraging the creation, development and expansion of overseas markets for Australian goods and services”.
More than half of the 74 finalists in the 2014 Australian Export Awards were beneficiaries of the scheme, he said.
“The support that the grants offer to small and medium-sized businesses is more than monetary. It instils certainty and confidence in firms who know that their export aspirations are backed by the Australian Government. Of course, the EMDG scheme’s financial assistance is the key element of the programme, and in many cases the grants are reinvested to support new market development activities.”
“My recommended changes to the scheme will add certainty and confidence to long-term planning for exporting businesses, governments and Austrade. I am recommending a few significant changes to the scheme, with the exception of a proposal that offers additional targeted support for high-growth exporters.”
Mr Robb told the Parliament today that the EMDG scheme was particularly important in helping small and medium-sized exporters cover the promotional costs of expanding into international markets.
“Trade and investment are vital for the Australian economy,” Mr Robb said. “In 2014–15, Australia’s total exports were worth $319 billion. That represents a lot of jobs and a lot of GDP.”
As part of the independent review process, consulting firm KPMG was asked to analyse the net economic benefit of the EMDG scheme. It found that each dollar of an EMDG scheme grant generated an economic benefit of $7.03 when industry spill-overs and productivity gains were taken into account.
*Photo Credit: Getty