Senate RRAT Committee - Export Market Development Grants Legislation Amendment Bill 2020 [provisions]

This submission focusses on the potential impact of proposed changes to the Export Market Development Grants Scheme (EMDG) on Australian small and medium sized (SME) exporters. Australian SME exporters are a key part of Australia’s success story as a trading nation. Their role will become far more important as the nation seeks to recover from a historic economic downturn, and as we seek to diversify and modernise what we produce as a nation. SME exporters can be a much greater source of income, livelihoods and jobs, but due to their size and resource constraints, they require an appropriate level of support.

The EMDG has provided invaluable support to SME exporters for more than four decades. The recent increases in level of funding is further welcomed. However, as the overall trading landscape changes, it is right to revisit its current format to ensure that it is fit for purpose, and functions efficiently and effectively. In assessing the merits of the proposed overhaul of the EMDG, we considered whether the following principles will be met:

– more SME exporters will be able to benefit from it, including through increased scope of eligible activities;

– a greater proportion of claimed exporter expenditure or cost can be covered by the grant;

– the application will be simple and straightforward, minimising impractical performance requirements at the front-end; and

– the assessment and payment processes will be prompt, so applicants receive funds immediately.

Key points

• The views expressed in this submission are based on the Export Council of Australia’s understanding of the impact of proposed EMDG changes on small and medium sized exporters.

• SME exporters are currently facing considerable challenges, including due to Covid-19 restrictions, here and in overseas markets. Support of SME exporters can help boost Australia’s economic performance, and diversify Australia’s trade profile.

• The EMDG change from reimbursement to a grants program will mean SME exporters can receive funds immediately and undertake activities with confidence.

• The design of the application process will ultimately determine how easy SME exporters are able to access EMDG funds. Future application forms must be clear and straightforward.

• Eligibility criteria, including definition of ‘export ready’ may have to be applied leniently, and coverage of accepted activities need to be broadened.

• The separate funding thresholds for new exporters and those growing their exports are appropriate for their size and activity needs.

• The ECA supports the proposed changes, as we expect the application process to be simpler, more SME exporters will be able to access the program, and get much needed funds sooner.

At this particularly challenging time in global trade, the ECA is not looking for a simple fix to the EMDG. Australian SME exporters are doing it tough, and will continue to face daunting challenges in the near term. For that reason, the changes to the EMDG must be designed for the occasion and equate to a whole new initiative.

The ECA believes the new EMDG offers that. We understand it can deliver a simpler application process, with more SME exporters able to access the program, and more funds to go into their hands, sooner. The ECA believes these will benefit SME exporters and therefore supports the proposed changes.

Moving forward, it is crucial that the Government and relevant stakeholders work together to ensure the new administrative processes do indeed work for SME exporters, and that SME exporters are aware and take advantage of the new arrangements.