Export market development grants back Aussie manufacturers to go global
Facilitated by Austrade, the Export Market Development Grants (EMDG) program is a key Australian Government financial assistance program for exporters.
EMDG is focused on two key objectives: encouraging businesses to increase their international marketing expenditure to boost international sales; and providing Australian businesses with the opportunity to enter global supply chains. EMDG does this by covering the cost of eligible expenses for export promotional activities, including:
- overseas representation
- marketing consultants
- free samples
- trade fairs, seminars and in-store promotions
- promotional literature and advertising
- overseas buyers
- registration and insurance of eligible intellectual property
With an annual budget of over $150 million, the reach and impact of EMDG is substantial. Each year, the program helps around 4,000 small and medium enterprises (SMEs) start or expand their export business. In the last reporting period, businesses that received grants generated over $4.3 billion in exports, particularly in markets such as Canada, China, Germany, Singapore, the United Kingdom and the United States.
The impact of EMDG is expected to grow this year, with the Australian Government increasing the program’s budget to over $200 million in response to the COVID-19 pandemic.
Changes to EMDG: A simpler program that provides greater certainty
In September 2020, the Australian Government decided to implement all 10 recommendations from the independent review of the EMDG ,which centred on cutting red tape, increasing awareness of the scheme, and giving exporters more funding certainty.
Until now, the EMDG has reimbursed businesses for up to 50 per cent of eligible promotion expenses, less the first $5,000.
From 1 July 2021, the EMDG will move from this reimbursement model to a grant program. This will make the program more flexible and responsive to the needs of exporting businesses. It will be simpler for applicants and will provide greater certainty about how much funding businesses will receive.
How the Revised EMDG Will work
SMEs will be able to apply for grants up to $770,000 per applicant, over a period of eight years (not necessarily consecutively) for eligible promotional activities. Grants will be available in three tiers:
- Tier 1: SMEs that are new to exporting can apply for grants of up to $40,000 per year for two years.
- Tier 2: Exporters who want to expand their footprint in existing markets or enter new markets can apply for grants of up to $80,000 per year for three years.
- Tier 3: Exporters who plan to make a strategic shift in their business can apply for grants of up to $150,000 per year for three years.
To be eligible, SMEs must be export-ready and have a turnover of less than $20 million.
The mechanics of how the grant will operate, and how EMDG will transition from the existing reimbursement model to a grant payment model, are currently under development.
Further details about EMDG after 1 July 2021 can be found on Austrade’s website.
The best way to stay up to date is by subscribing to Austrade’s EMDG Update.