The Export Market Development Grant scheme has been given a $50 million boost in the federal budget, after it was feared nearly 2000 businesses would be forced to go without crucial payments.
An extra $50 million will be given to help fund the EMDG scheme for 2008-09, along with the previously promised $50 million for the 2009-10 year.
The EMDG scheme, administered by Austrade, has been attacked by emerging exporters for being drastically underfunded. About 1800 businesses that applied for grants of over $40,000 were told they would only receive about 30% to 50% of the payments.
The Government says the extra funding means those businesses will now receive 100% of their costs returned, with payments to begin next month.
Trade Minister Simon Crean said in a statement that the Government believes the $50 million will provide stimulus to exporters to increase market share, and protect jobs.
“In the midst of the global recession…it is vital we ensure much needed liquidity to those exporters who continue to pursue trade opportunities despite the most difficult export conditions in living memory,” he said.
The grant is designed to help small and medium exporters by reimbursing them for promotional costs.
The funding comes at an anxious time for exporters. The decline in the Australian dollar from about US95 cents last year to around US60 cents in recent weeks was a welcome change for the industry, but experts are becoming nervous – it yesterday reached a seven-month high of US77 cents.
Exporters rely on fixed prices that are often embedded in contracts for several months, and find it difficult to maintain competitive price levels if the dollar fluctuates rapidly.
The industry is also suffering from lack of trade in shrinking economies, especially in south-east Asia. The International Monetary Fund is predicting world trade to drop by a massive 11% during 2009.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
