Export grants promoted to start-ups despite cuts

Export-focused start-ups are being encouraged to utilise the Federal Government’s Export Market Development Grants despite recent funding cuts in order to return the Budget to surplus.

Administered by Austrade, the EMDG scheme helps current and aspiring exporters become more sustainable by providing reimbursement up to 50% for certain export promotion expenses, with up to eight grants available for each eligible applicant.

Parliamentary Secretary for Trade Justine Elliot said in a statement the scheme attracted more than 4500 claims from businesses for expenditure made between 2009 and 2010, with the total value of claims around $211 million.

Elliot recently announced that businesses with approved EMDG grants up to $27,500 will receive the full value of their EMDG claims while applications for export grants over $27,500 are expected to be paid at the rate of between 45 and 65 cents in the dollar.

“To help exporters deal with the aftermath of the financial crisis the government provided an extra $50 million in additional EMDG funding in each of the past two financial years,” Elliot said.

“However in keeping with the government’s commitment to return the budget to surplus total funding for the EMDG scheme has returned to its historical average.”

Ian Murray, executive director of the Australian Institute of Export, says reduced funding shows a lack of faith on behalf of the government towards exporters.

Murray says the institute has been disappointed by the government’s approach and wants the scheme fully funded immediately.

“Now is the time to assist exporters. If you’re going to have a plan in place it has to actually provide incentive for people to actually go and spend money in a difficult environment,” he says.

To access the EDMG for the first time businesses need to have spent $10,000 over two years on eligible export marketing expenses and have an income of less than $50 million in the grant year.

The business must have promoted one of the following:

• The export of goods and most services.
• Inbound tourism.
• The export of intellectual property and knowhow.
• Conferences and events held in Australia.

First‐time EMDG applicants are required to satisfy grant entry requirements which include providing financial statements and information that explains the business and the product or service.

“You may claim for expenditure on specific export promotional activities undertaken during the financial year before the application period,” a government spokesperson says.

“For your first EMDG grant you may claim expenses incurred over the last two financial years.”