Changes to Export Market Development Grant welcomed by sector, but questions remain over funding shortfall

Export industry experts have welcomed a series of changes aimed at making the Export Market Development Grant accessible to more companies, but now have a clear message for the Government: show us the money.

Ian Murray, executive director of the Australian Institute of Export, says the changes – which include a reduction in maximum grant available from $200,000 to $150,000 and a doubling of the minimum spending threshold required to qualify for the grant from $10,000 to $20,000 – were negotiated with Government on the basis that the total funding for the program would be $200 million a year.

However, the Government did not allocate increased spending for the scheme in the Federal Budget, which means that funding will fall to $150 million in the 2010-11 Budget year.

“If these changes are not made on the basis that the funding for the scheme is $200 million, we’d be grossly disappointed,” Murray told SmartCompany this morning.

“All the concessions have been made on the basis of funding.”

Ivan Kaye of grant consultancy firm BSI echoed Murray’s concerns.

“These proposed changes are fine… as long as they provide certainty that SME exporters can rely on what they are expecting to receive. [Trade Minister Simon] Crean, please give this certainty to this sector of the economy.”

The Government’s amendments to the scheme include 10 main changes, aimed at making the grant budget more accessible to what the Government describes as “deserving” companies. Under the legislation, the scheme will officially be extended for five years until 2015-16.

The main changes are:

• Reducing the maximum grant from $200,000 to $150,000.
• Increasing the minimum expenses threshold from $10,000 to $20,000.
• Reducing the maximum number of grants and individual recipient can receive from eight to seven.
• Capping intellectual property registration expenses at $50,000 per application.

The increase in the mininum threshold is designed to ensure companies who are genuinely exporting get the grant. The threshold was previously as high as $30,000.

The amendments also hand Austrade the power to set up an accreditation scheme for grant consultants, although the agency does not have plans to do so at this stage.