The second round of the new version of the export market grants scheme has been “paused” following the election of the Labor government.
Less than a fortnight ago – during the election campaign – Austrade announced the planned opening of the new round of the Export Market Development Grant (EMDG) scheme for May 31.
But this round has now been delayed following Labor’s election victory, with the new government to be briefed on the scheme before the round is opened.
In an alert to EMDG claimants a day before the round was set to open, Austrade said the scheme would be delayed to give it “time to brief the new government”. No date was provided for when the round will be opened.
The round will be the second under the new version of the EMDG program, which has seen it transition from being a reimbursement scheme to a more traditional grants program, with funding promised upfront but not delivered until after milestone reports are produced.
The former Coalition government also scrapped the “export ready” test, making significantly more companies eligible for the grants, with more than doubling applying this financial year.
As the scheme is not competitive and has a fixed annual allocation of $157 million, the size of individual grants companies will receive has been drastically reduced, in some cases by as much as 80 per cent.
The program did receive a $100 million funding boost over two years from the Coalition earlier this year, but this cash will only go towards regional businesses.
Guidelines for the next round released in May by Austrade revealed that only “minor changes” would be made despite widespread criticism of the new version of the EMDG.
The guidelines confirmed that the grants will likely be the same size as the significantly reduced ones available this financial year.
This led grants expert and former Cochlear executive Bruce Patten to claim the EMDG program is “broken” and that Australian exporters have been “abandoned”.
“It is obvious the EMDG scheme is broken and Australian exporters have been abandoned at a time when support is desperately needed,” Mr Patten told InnovationAus.com in May.
“If Australia wants businesses to increase export sales the government needs to encourage them and mitigate some of the financial risks. In these uncertain times, can businesses afford to take the risk of chasing exports?”
Labor has previously raised concerns with these changes while in Opposition, and will likely now review the program before the next round is launched.
Earlier this year Export Consultants Association chair Rod Campbell warned that the EMDG will fail unless there is a “severe overhaul” following the federal election.
“They’re throwing away 46 years of proven success for a mystery program, and now the EMDG is going to sit alongside most of these other programs that have failed,” Mr Campbell said.
“It will fail – they’ve scrambled it. They’ve moved it totally away from commercial reality. There’s got to be a severe overhaul.”
