Troubled export grants budget top-up only for regional businesses


Denham Sadler
National Affairs Editor

The troubled Export Market Development Grants scheme has been given a $100 million funding boost over two years, but this extra cash will only be accessible for regional companies.

The federal budget, unveiled by Treasurer Josh Frydenberg on Tuesday night, included $100 million over two years for the Export Market Development Grants (EMDG) through the Regional Accelerator Program.

This funding will only be for regional-based companies looking to access the scheme, which provides reimbursements of up to 50 per cent for eligible export promotion expenses.

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The funding will come from the Department of Regional Development rather than the Department of Foreign Affairs and Trade (DFAT), which administers the scheme.

DFAT’s funding for the EMDGs will remain steady at $157 million per year over the forward estimates, but the regional boost effectively ups this to $207 million in 2022-23 and 2023-24, before it drops back down to the ongoing amount.

There had been hopes that the Coalition would provide a broader cash boost to the scheme to compensate for a dramatic reduction in the size of grants to be dished out to eligible companies following significant changes introduced last year.

An $80 million boost for the EMDG scheme was announced by Trade Minister Dan Tehan two days before Christmas last year. But this release also included revelations there had been “unprecedented” demand for the grants following a series of changes made to the scheme the previous year, meaning the size of individual grants would be greatly reduced.

Grant Help’s Jasper Steel said companies across the country had hoped for a significant boost to the EMDG scheme to help compensate for these changes.

“Exporters around Australia hoped for further investment into the EMDG through this year’s budget. Following the disappointing changes to the program, many businesses were left without the ability to grow,” Mr Steele told InnovationAus.com.

“The focus on rural businesses and those in the tourism industry will mean that once again various industries who provide significant contributions to the Australian market will see their funding reduced and their opportunities limited.”

Funding under the EMDG is now paid beforehand rather than at the end of the financial year, and the “export ready” test has been scrapped, making significantly more companies eligible for the funding.

More than 5000 applications were made last year, and 2600 of these were new applicants.

While companies applying for the largest tier of the EMDG are eligible for funding of up to $150,000, they instead will be receiving only $35,000, the government revealed late last year.

It was also revealed at a recent Senate Estimates hearing that $26 million from the previous year’s allocation will be taken to help cater for this increased demand, equating to a 15 per cent cut for companies which accessed the scheme in 2020.

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