Applications have now opened for AusTrade’s revamped Export Market Development Grant (EMDG) scheme. From 1 July 2021, the EMDG scheme has changed from a reimbursement model to a grants scheme that is intended to provide upfront funding and greater certainty for applicants.
This article summarises the key changes and provides our tips for businesses when considering whether to apply for the grant.
Tiered grant system
One of the main changes to the scheme is the introduction of a tiered grant system:
|Tier||Suitable for||Grant details|
|Tier 1: Ready to export||First time exporters
|Maximum $40,000 per year for 2 years
|Tier 2: Expanding||Businesses already exporting that are looking to expand promotion activities
|Maximum $80,000 per year for 3 years
|Tier 3: Expanding and strategic shift||Businesses already exporting that are looking to expand promotion activities and make a strategic shift such as targeting a new market or new type of customer
|Maximum $150,000 per year for 3 years
Businesses applying for the Tier 1 grant will need to complete an “Export Readiness Tool” while businesses applying for Tiers 2 or 3 will need to submit a “Plan to Market” along with their application detailing how they will be expanding and/or implementing a strategic shift in the business.
Applicants can make up to eight EMDG submissions (as was the case under the previous scheme), but a $770,000 maximum funding cap has been introduced (i.e. the maximum funding a business can receive under the new scheme over the eight submissions).
Representative bodies (organisations that promote the interests of members from an industry looking to export their products) are entitled to grant amounts of up to $150,000 per year, with no limit on the number of times they can apply for the grant.
- Businesses can apply for the different tiers multiple times and do not need to move through the tiers consecutively. For example, a business may choose to apply first for the Tier 1 grant (two years) followed by the Tier 3 grant twice (six years) to come up with the maximum eight years allowed under the scheme.
- Businesses only need to apply once for each tiered grant, they do not need to submit a new application each year.
- Businesses should consider saving their submissions for the eight years they expect to have the greatest amounts of international marketing and promotion expenditure.
- Templates of the Export Readiness Tool, Plan to Market and other documents are available on the AusTrade website.
2021 Income year – The reimbursement scheme
The application process for the 2021 income year is largely the same – AusTrade assesses the submitted applications and successful applicants receive their funds sometime later. However, a new application form has been introduced that uses the MyGovID authenticator, which is designed to streamline the application process.
2022 Income year – the new grants scheme
Applications for the current 2022 income year (which sits under the new grants scheme) are processed as follows:
- The business submits a grant application
- AusTrade assesses the grant application
- The business and AusTrade enter into grant agreement that sets out the terms of the agreement and the funding amount.
- The business undertakes the agreed promotional activities.
- The business submits milestone reports throughout the grant year detailing the promotional activities conducted and costs incurred.
- AusTrade makes milestone payments throughout the grant year based on the costs incurred and agreed funding amount.
- Grant amounts are still subject to the pool of funds available to AusTrade, but the funding agreement should provide applicants with certainty of the grant amount they will receive.
- For 2022 applications it is highly likely that businesses won’t know what their grant amount is until well into the new year once all applications have been processed, so businesses should factor this into their cashflow forecasts.
- Applications for both the 2021 and 2022 years close 30 November 2021.
Along with the introduction of a tiered grant system and a new application process, other changes were made to the EMDG scheme for the 2022 income year including:
- The $15,000 minimum spend requirement has been removed.
- The maximum turnover requirement to determine eligibility has been reduced from $50 million to $20 million and is assessed on standalone entity turnover, not group turnover.
- The expenditure caps on the different types of promotional expenditure have been removed, with just the one overall cap on the grant amount for each tier.
- The export performance test has been removed.
- The minimum time period to claim overseas representative costs has been reduced from 12 months to 6 months.
- Costs associated with training are now eligible expenditure for the tier 1 grant.
The new scheme is designed to be simpler and more streamlined for applicants. However, as many provisions have changed, businesses should seek assistance if they have questions.
As applications for both the 2021 and 2022 years close 5PM AEDT on 30 November 2021, now is the time to contact your William Buck advisor.