Austrade’s premier grants program; Export Market Development Grants (EMDG) which provides cash incentives to help Australian small to medium enterprises (SME’s) grow their exports in international markets, has seen numerous recent changes that has devalued the grant amount and has made businesses question the value of the program.
Over the past 10 years GrantReady has helped many businesses across a range of industries successfully access EMDG grants to expand globally, launch new products in new markets and thrive. Some of the successes we have seen are:
- A Melbourne based data analytics company relocated their CEO to the US to better access this market and received EMDG support to fund rent, salary, and car expenses. The funds gave the company breathing room while it expanded into a new market.
- A start-up technology company was able to access funds to protect their intellectual property internationally, which can run into the $100 000’s
- A beauty brand received EMDG funding to offset the cost of digital marketing campaigns and the shipping of free samples to overseas influencers which allowed them to significantly grow their presence and generate sales in new markets.
- A kit plane business leveraged EMDG funds to offset the cost of attending international trade shows, including airfares, event tickets and booth costs and expenses related to speciality shipping containers to allow them to show their airplanes at the events.
Reforms in 2021 saw Austrade reorientated it from a reimbursement scheme where up to 50% of costs for developing export markets could be reimbursed, to a grants scheme with a capped pool of money and tier systems.
Each tier offers a different level of financial support over the course of the export journey. As detailed below each tier comes with a legislated amount of available funds that need to be matched by company expenditure. This meant a current exporting business that wanted to make a shift into a new market could potentially access the maximum amount of $150 000 per year for 3 years.
However, these legislated amounts were significantly reduced due to more companies being eligible for the grant with the scrapping of the ‘export ready’ test in 2021. The non-competitive feature of the grant meant this increased the number of companies accessing the same pool of money and significantly decreased the grant amount over round one and two. As the table details below, the changes saw almost double the number of companies apply for the grant and almost an 80% drop in the value of the scheme:
Despite a $11.8 million budget injection for the 2022- 2023 EMDG, it has not been enough to stem the depreciating value of the grant.
From Atlassian to Zimmerman, this program has helped around 50‘000 Australian businesses scale their exports and go global since 1974, it would be a real loss to Australian businesses if there was a continued devaluation of the scheme due to government policy changes.
GrantReady Co-founder, Adrian Spencer says “EMDG has been the backbone of many Australian start-ups as they venture into overseas markets. The program has provided invaluable support for the growth of Australian businesses. It is a real shock to see the diminishing value offered by EMDG to the point where many companies will cut their investment in export marketing. We hope to see greater investment in this program in the future.”
In August, Trade Minister Don Farrell announced an operational review into the EMDG scheme following the election of the new government, with the final report due before the end of this year.
GrantReady will continue to support all its clients to access the full amount of the EMDG, so that Australian Businesses can continue to grow and thrive globally, and we will continue to advocate for a more effective EMDG scheme.