article by Ivan Kaye
In 2002, the Government stated its intention to double the number of exporters by 2006.
Exporters who claimed their 2002 and 2003 Export Market Development Grants did not receive their full entitlement. For the financial year ending 2003, 4163 companies claimed grants, up from 3391 in 2001-02.
As a result of the changes in Legislation, reducing the maximum grant from $200,000 to $150,000 and maximising the number of claims to 7 per company, it is expected that Companies claiming grants will have reduced. Exporters will receive their full entitlement in 2004 and the $150 million allocation will not be reached.
In 1997, the scheme was capped at $150 million. Under this constraint, Austrade last year paid out the first $50,000 entitlement in full to Claimants but then paid out only a small percentage of their remaining entitlement. This created uncertainty with Exporters who were relying on Entitlements that were not received.
EMDG’s are paid under a split-payment system designed to ensure that spending is kept within budget and that all eligible applicants receive a grant, despite an increase in demand.
Under this split-payment system, the first round payment ceiling is $50,000. If the provisional entitlement is calculated to be more than $50,000, exporters are paid in two instalments: an initial up-front payment of $50,000 and a second tranche payment at the end of the financial year. The value of the second tranche payment will depend on the amount of funds remaining in the EMDG budget after all applicants' initial payments have been made.
The Federal Government, recognising the success of the EMDG program, has increased their allocation by an additional $10m per year over the next 3 years, which will provide more comfort to Exporters that they will receive their full entitlements.
According to a study by the Australian Bureau of Statistics (ABS) exporters are good employers. They pay better and are more committed to occupational health and safety than non-exporters, and provide a higher proportion of full-time and permanent jobs. This reflects the tendency of exporters to be more dynamic and innovative than non-exporters because of the challenges of international competition. 1 in 5 jobs are said to be export related.
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