The government is changing the Export Market Development Grant from 1 July 2021. And these changes will significantly help business families across Perth looking to expand their interest beyond our borders.
The EMDG cash flow funding is better
The most significant change to the scheme is that funding can now be paid out, and received, prior to the business incurring the cost. For many business families the need to wait (sometimes for 3 years) from the cost incurred to the cashback effectively meant that the scheme was near worthless as it was so far disconnected from the initial cost.
The scope of EMDG activities is broader
The scope of activities under the new scheme have also been extended to include training expenses for the development of skills of the person undertaking the marketing overseas and for short trips under 21 days within Australia for activities related to the marketing.
The quantum of EMDG funding is reduced
The flipside of the scheme is that the total funding has reduced (from $1m to $770k) and the turnover threshold has now fallen from $50m to $20m.
The reduced turnover threshold is important and controversial. In terms of business families the level of turnover is often not a good indicator of the size of the business. A law firm generating $20m in fee revenue is a significant business however a labour hire business with a $20m turnover can actually be quite tiny.
Processing dates are tight
As the EMDG was run previously the application dates for the new grant are important. You can apply for grants for 2022, 2023 (and maybe 2024) from 16 August 2021 to 30 November 20231.
How to get it
To apply you need to:
- Complete the online form.
- Have the grant assessed by Austrade.
- Enter into the grant agreement as presented by Austrade.
- Being the agreed upon activities for your export market.
- Provide reporting on your key events along the journey.
The payments to successful applications will be done annual and only once the key events are reported upon and approved. This is a similar practice to the current one and will be documented in length by the grant agreement presented by Austrade.
What to provide
If you are making the application you will need to present the following documentation:
- Proof that you are an established eligible business.
- Proof that your products are substantially of Australian origin.
- Financial reports including your balance sheet and profit and loss.
- Evidence that your product is an export product and eligible.
- A marketing plan.
How much can you get?
If you are a business new to exporting the grants are potentially worth $40k a year for two years.
If you are currently exporting and wanting to expand you can potentially enjoy $80k a year for the next 3 years.
If you are making a “strategic shift” is your exporting business you can potentially enjoy grants of $150k a year for 3 years.
What is excluded?
If your export market is in New Zealand you will not qualify. Likewise re-imbursed costs, ordinary wages or wages to associates of the family business do not qualify.