The Export Consultants Association Inc. (ECAI ) today commented that the Report to Trade Minister Andrew Robb following the independent review of the Export Market Development Grant ( EMDG ) scheme reinforces that Government funding to encourage and sustain small and emerging exporters is working well and contributing beneficially to the economy.
The report conducted by Michael Lee (Ex Director of Zip Industries) is undoubtedly the most comprehensive ever undertaken on the EMDG program and it draws out insightful issues not only on the way the EMDG program operates, but also how this incentive program has underpinned export development success for many emerging exporters over many years.
While the report has focused on the impact of the EMDG over more recent years since the recovery from the GFC, the evidence from the 188 public submissions confirms the EMDG scheme which has now operated for the past 40 years, has been the most successful economic stimulus initiative ever introduced into the Federal Parliament.
Rod Campbell (Chair of ECAI) indicated Export Consultants now lodge some 70% of applications on behalf of applicants and the recommendation for the report to strengthen the involvement between EMDG consultants and Austrade (who administer the program) is greatly welcomed by ECAI to further improve the process and effectiveness of this program.
The budget for Government funding is an ongoing issue for economic management and the report by Mr Lee suggesting incremental increases to the annual EMDG budget is undoubtedly the most compelling of the 10 recommendations.
This recommendation to expand funding is strongly supported by the KPMG report evaluating the economic contribution on the EMDG program which ranks this incentive far better than the R&D Tax Incentive program (which has unlimited funding ).
The EMDG review report and its recommendations are commended by ECAI as an excellent setting for the Government to make a real commitment to a program that offers sustained support to emerging exporters.
Jobs growth and investment in business efficiencies arise from growing export markets and these fundamentals can be facilitated by the EMDG program provided exporters can have some certainty the Government will fully fund the rebate on their export marketing investments.
Doubts on whether the annual budget allocation will fully fund exporters EMDG payments has been the single major uncertainly with the current EMDG program
Michael Lee’s comprehensive report does deliver and gives the Government some direction on how to overcome this problem. Well Done.
(For further comments by ECAI on EMDG review report available here or via ECAI Secretariat)
The Export Consultants Group and the Australian Institute of Export will be represented by Ian Murray, Executive Director of the AIEx at a round table discussion between peak industry associations in the export service space. The discussion will take place in Canberra on Thursday 17th April and key allies will discuss the Mortimer Review into Export Policies and Programs, EMDG Grants and the Innovation Review.
The ECG/ AIEx will submit a paper on the EMDG Underfunding situation. To download copies of the paper please click here. For further information please contact either Ian Murray on 02 8243 7410 or Peter Campbell on (02) 9524 1084
The Export Consultants Group of the Australian Institute of Export has called upon the major political parties to make a commitment to increase incentives for exporters in their respective trade policy statements in the run up to the election.
Mr Peter Campbell, Chairman of the Group, said that Export Market Development Grants Scheme (EMDGS) had proved to be an excellent means of encouraging Australian firms to become exporters and expand export markets.
Econometric analysis has shown that the EMDGS produces excellent multipliers, demonstrating the overall effectiveness of each dollar of grant funding. The return on investment of EMDG to the Government and to the business community has been outstanding. Many flourishing exporters owe their early success to the valuable support received from the EMDGS.
During the last decade, however, the real value of EMDGS to Australian exporters has been significantly diminished due to funding caps and access restrictions imposed by the current Federal Government. As a result, the effectiveness of EMDGS as a change agent has been severely restricted.
“We are constantly being reminded of the importance of increasing Australia’ export performance, to bring benefits to our local economy, strengthen the internationalisation and sophistication of Australia’s products and markets, and improve our balance of trade”, Mr Campbell said.
“Improvements to the EMDGS are required to ensure that the program is most effective in supporting Australia’s export activities. The annual EMDG Budget allocation is a pittance when compared to the R&D assistance provided by the Government. While the development of new products and technologies is of undoubted importance, surely, supporting the internationalisation of these products is just as critical for Australian businesses and the future of our economy.”
Mr Campbell said the Institute had made a series of recommendations to the major parties (see attached) and was awaiting a positive response.
For further information call Mr Campbell on (02) 9524 1084 or 0414 670 089
FOR IMMEDIATE RELEASE 16 SEPTEMBER 2005
A major exporters’ advisory group, the Export Consultants Association Limited (ECAL), has expressed disappointment with the report by the Australian Trade Commission into the Export Market Development Grants program (EMDG). While ECAL supports the recommendation to extend the program for a further 5 years, it is concerned that an opportunity was lost to address many of the issues raised by exporters regarding the support provided under EMDG.
The report tabled by the Deputy Prime Minister and Minister for Trade, The Hon Mark Vaile recommends a number of minor changes to the successful program with the focus on assisting new exporters to develop export markets for their products. Substantial support was received from the 394 submissions from exporters, industry groups and government bodies for the continuation of the program.
ECAL Chairman, Mr Gary Cronin, has acknowledged that the continuation of the Export Market Development Grants program provides encouragement for many small and medium sized exporters who have made commitments to their future export marketing.
However, Mr Cronin stated that “To ensure the support provided under EMDG complements the Government’s commitment to doubling the number of exporters and the Free Trade Agreements already signed or being negotiated, the program should be extended to encourage existing exporters to create new markets and new products for export.”
“The decrease in the number of EMDG applicants and the underspend of the EMDG budget by Austrade is a concern to the export community and the recommended options for improving the performance of the scheme do not address these concerns.” Said Mr Cronin. ” The recommended options are minor changes that will have limited impact on exporters, whereas more relevant enhancements could have been adopted that would provide greater influence on encouraging Australian businesses to become sustainable exporters within existing budget allocations”.ECAL believes that the report should have recommended implementation of the options canvassed by the EMDG Review Facilitator, Mr Peter Jollie, in Appendix F of the Report. His suggested scheme changes included:
- Allowing up to 10 grants per firm with limitations on grants after receiving 7 grants
- Provision for businesses to claim for new markets after receiving 7 grants
- Provision for state/territory and regional bodies to apply for approved body status
- Removing/softening some scheme provisions that are restrictive
- Increase the $30 million annual income limit.
- Expanding the categories of claimable expenses provided that additional funding is made available.
Issued by the Export Consultants Association Ltd. For further information and comment contact Gary Cronin, Chairman ECAL on (02) 9439 4244 or 0408 222 636.