Changes to the Export Market Development Grant

What is this grant about?

The Export Market Development Grant (EMDG) is a key Australian Government financial assistance program aimed at encouraging businesses to develop export markets.

Recently, there have been significant changes to the EMDG scheme. Since 1 July 2021, the EMDG scheme changed from a reimbursement model to a grants scheme that is intended to provide upfront funding and greater certainty for applicants. So far there have been three rounds of applications for the updated EDMG scheme, with applications for Round 4 expected to open late 2024.

In this article, we will summarise the key changes you need to know about and will also provide our professional tips and advice for businesses considering whether or not they should apply for the grant.

What are the changes to the EMDG program?

A number of important updates have been made to the EMDG. Some of the major modifications to the scheme that businesses should be aware of are:

Shift to an upfront grant agreement

This is the most significant change that has been made to the EMDG. Previously, this grant operated on a reimbursement basis, where you would spend first and claim later. Now, the program has shifted to a grant agreement system. This means you will receive funding upfront based on your planned export marketing activities.

Three tiers of funding

The new structure introduces three tiers for applicants: Ready to export (Tier 1), Expanding (Tier 2) and Expanding and strategic shift (Tier 3). We’ll delve into these tiers in greater detail below.

Increased focus on results

For small and medium businesses who wish to apply for the grant, the new EMDG now requires you to outline your planned marketing activities and expected outcomes, aligning funding with actual export growth.

A broader range of covered expenses

The new scheme covers a wider range of promotional activities, including digital marketing and e-commerce platforms, which are increasingly relevant in today’s global market.

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
Tier 2: Expanding	Businesses already exporting that are looking to expand promotion activities	Maximum $80,000 per year
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 exporting a substantially new product.	Maximum $150,000 per year

Additional requirements for EMDG applicants

Businesses applying for the Tier 1 grant will need to complete an ‘Export Readiness Tool’. Businesses applying for Tiers 2 or 3 must submit a ‘Plan to Market’ with their application detailing how they will be expanding and whether they will be implementing a strategic shift in the business.

Tips for businesses applying for an EMDG

• Grant amounts are still subject to the pool of funds available to Austrade, which has advised it expects the likely maximum funding amounts for Round 3 of the scheme (for the 2024 financial year) to be similar to last year’s grant amounts:
  • Tier 1: $10,000 per financial year
  • Tier 2: $18,000 per financial year
  • Tier 3: $28,000 per financial year.
• Businesses can apply for the different tiers multiple times and do not need to move through the tiers consecutively in order to come up with the maximum eight years allowed under the scheme.
• 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.

EMDG application process

Applications for the 2024 income year (which sits under the new grants scheme) are processed as follows:

1. The business submits a grant application.
2. AusTrade assesses the grant application.
3. The business and AusTrade enter into a grant agreement that sets out the terms of the agreement and the funding amount.
4. The business undertakes the agreed promotional activities.
5. The business submits milestone reports throughout the grant year detailing the promotional activities conducted and costs incurred.
6. AusTrade makes milestone payments throughout the grant year based on the costs incurred and agreed funding amount.

Tips for businesses during the EMDG application process

• 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.
• Businesses won’t know what their grant amount is until some months into the new financial year once all applications have been processed, so businesses should factor this into their cashflow forecasts.

Other changes to the EMDG process

The major changes to the EMDG were the introduction of a tiered grant system and a new application process. However, there are other changes made to the scheme that businesses should be aware of:

• 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 expenditures for the tier 1 grant.

How many times can you claim EMDG?

As was the case under the previous scheme, applicants can make up to eight EMDG submissions. However, a maximum funding cap has now been introduced. This funding cap means that businesses can receive a maximum of $770,000 over eight submissions.

Representative bodies (that is, 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.

Maximise your grant with William Buck

The new scheme is designed to be simpler and more streamlined for applicants. However, as many of the old provisions have now changed, businesses should seek assistance from professional financial experts before applying for a grant. By speaking to an export market development grant consultant first, they can provide guidance on how to faultlessly execute the grant application process, therefore maximising your grant.

If you need assistance applying for the EMDG scheme, contact your William Buck advisor.