Accessing the Benefits of the EMDG Scheme
There are significant financial benefits provided to Australian firms by the Export Market Development Grant (EMDG) scheme. This successful government program has assisted thousands of Australian exporters to promote their goods or services in overseas markets. The EMDG scheme is governed by an Act of Parliament and is administered by Austrade and we as a profession find it pleasing that it has political bipartisan support (and that both sides of Government regularly acknowledge this) with statements such that on Wednesday the 19th August 2015 by the Minister for Trade Andrew Robb MP who stated to the Parliament as detailed in Hansard that:-
“Over four decades, EMDGs have supported more than 45,000 Australian exporters. Some of them are now household names: Resmed, The Wiggles, the Sydney Bridgeclimb and Casella—exporters of the famous Yellowtail wine. More than half of the finalists in the 2014 Australian Export Awards, for example, were beneficiaries of this scheme”.
“International business is increasingly complex and the EMDG Scheme is flexible enough to service this changing landscape.
- Global Value Chains
- Emergence of e-commerce and digital communications
- Complex sales and distribution networks
This complexity is a good way to remind ourselves of why we have negotiated free trade agreements with Japan, Korea and China. It also explains the significance of trying to ensure that our businesses can work with these emerging trends and developments to our advantage. These things are good things: global value chains, e commerce and digital communications. They are opening the world, especially to SMEs, in ways that were not even thought possible in the recent past. We need to ensure that businesses have these sorts of tools to exploit them. EMDG is one of those tools.”
Exporters need to consider whether they should engage an expert consultant (with their professionally based knowledge of EMDG and International Business) to advise and assist them to use the tool “EMDG that our Government grants them with the greatest effect through application of their in-depth knowledge of the legislation and Austrade assessment procedures, and thus to prepare their application in the context of the acknowledged increasing complexity of the International Business environment.
To ensure that this financial assistance program is accessed effectively, an exporter should consider the benefits of engaging a consultant who is a member of the Export Consultants Group (ECAI) and is included on the current Code of Practice Administration Committee (COPAC) listing of consultants.
Listed consultants have met a range of industry and Austrade approved Continuing Professional Development (CPD) requirements. The benefits of engaging a consultant who is a member of ECAI and on the COPAC List is not limited to, but includes the following –
- The consultant will currently subscribe to the EMDG guidelines and will therefore have the ability to advise on the complex specifications and requirements of the EMDG legislation.
- Attendance at COPAC Professional Development seminars to ensure the consultant is up to date with the latest technical and administrative developments of the EMDG Scheme and has been briefed by Austrade regarding the assessment methodology of EMDG claims.
- Listed consultants have agreed to abide by a code of conduct containing fundamental ethical principles, setting professional standards of performance for the submission of your EMDG claim.
- The consultant has met benchmark standards for various Key Performance Indicators, including adjustments to claimed amounts, numbers of claims processed without adjustment, numbers of claims lodged and targeted processing times.
- ECAI consultants have the ability to use Austrade’s new electronic lodgement system, which may have the potential to speed up the processing of your EMDG claim.
If you engage a consultant who is not an ECAI member on the COPAC List, you cannot be sure of these qualities and therefore whether an accurate or timely EMDG claim will be submitted on your behalf.
Other important issues to consider when engaging an ECAI consultant include –
- The consultant’s past performance – ask the consultant what their performance has been, in terms of numbers of claims lodged, claims processed without adjustment and the proportion of adjustments overall.
- Their experience in your industry – ask the consultant what experience he or she has in your specific business industry (you will be pleasantly surprised at the insight that their knowledge grants you).
- Systems for compiling documentation – the EMDG Scheme requires supporting documentation to substantiate the claim. Professional consultants will be able to provide you with guidance on how to identify and capture the necessary paperwork (with pro-active advice on the necessary agreements and reports that will be required by Austrade) plus were warranted advice on such matters as Transfer Pricing, and they may also explain and assist you to arrange your international Trading affairs to comply not only with EMDG but also with International Trading & Tax requirements.
- Experience in EMDG matters – a consultant who has maintained a successful ongoing relationship with Austrade, and is committed to methods that effectively support an EMDG claim, will generally ensure your grant is assessed with a minimum of fuss.
We as a society must accept that with tight budgets, that Austrade will have a greater focus on compliance validation (no different to the ATO) and as such Austrade is obligated to deny or adjust inexpertly prepare submissions, with the outcome for First time claimants of often a denial of their submissions outright and for all claimants adjustment rate of 34% has been identified in the last analysis in 2013 Lodgements. Table 4.1 7 & 4.2 of the EMDG Auditor Generals ANAO report no 15 2014-15 noted and I quote:-
Year 1 application (made by applicants who are applying for an EMDG grant for the first time) have an inherently higher degree of risk because of the lack of knowledge about the applicant and/or expenditure claimed and the high risk of materially incorrect claimed expenses.
|Grant Year||Total EMDG Applications||Number of EMDG Applications Where an Adjustment was Identified||Proportions of the Total Population Where an Adjustment was Identified (%)
||Sum of the Adjusted Value ($M)|
|Source: ANAO analysis based on the EMDG transaction data provided by Austrade after the end of the year closing process.|
In the coming year we as Code of Practice Administration Committee (COPAC) listing of consultants, will have an Adjustment rate of less than 7% as you will appreciate this statistically validates the reduction in risk of lodging a claim representing significant quantifiable benefit to you the exporter (we appreciate that you should not have to become an Accountant/ Lawyer/ Economist/ Marketing focused Export Professional to be an EMDG Claimant but regrettable we live in a world that is compliance/results based, so please give thought to appointing an ECAI Code of Practice Administration Committee (COPAC) listing of consultants and that this action should be a wise cost/time saving move).
All exporter should be mindful that a False Claim (one with errors) could engender a legal/ criminal action by Austrade against them for their attempt to commit a fraud on the Commonwealth of Australia, whilst in no way is this the case with all the 34.2% of applicants that have had their claims adjusted it was sadly the case for 21 Claimants in the 2013/14 year Page 42 of the EMDG Auditor Generals ANAO report no 15 2014-15.
Benefits to ECAI Members
There are many reasons why you should become an ECAI member. These include, but are not limited to the following:
- Regular updates (newsletters) on the status of the EMDG scheme and reviews that take place along with other information pertinent to the export community.
- Discounted registration fees for Continuing Professional Development (CPD) days and conferences.
- Representation by a committee of members who will look after the interests of consultants as a profession (for example, ECAI has made comprehensive submissions on behalf of its members in 2015 to the Minister for Trade, as part of formal reviews into the EMDG Scheme).
- COPAC (Code of Practice Administration Committee) is a joint Austrade/consultants committee. Consultants are represented by ECAI members.
- Code of Practice is what ECAI grant consultants Members adhere to. This was written by ECAI members initially with input from Austrade and subsequently with input from COPAC.
- Key Performance Indicators (KPI’s) which monitor a consultant’s performance with Austrade have been negotiated by ECAI.
- Access to decisions made by the Technical Committee. This is a committee with both Austrade and ECAI members who discuss EMDG matters of a technical nature.
- ECAI representations to Canberra have contributed to positive amendments to EMDG rules and legislation.