The Future of EMDG: A Practical Look for Business Owners

For over 20 years, Vebiz has been your go-to for help with the Export Market Development Grants (EMDG). This program started in 1974 but it’s been changed a lot recently. So, what does this mean for the Aussie export support scheme? Why are we forgetting how good this program is?

1. The Overlooked Value of the EMDG

The EMDG from Austrade helps small to medium businesses (those making less than $20 million) pay for marketing their products, services, and ideas overseas. Since the start, it’s helped over 51,000 Aussie businesses sell in more than 180 countries. They say for every dollar the grant gives, it makes up to $14 in sales abroad. That’s a big win for Aussie businesses and our whole economy.

But now, the EMDG only gets $137.9 million a year, way down from $200 million back in 1999-2000. Compared to the $3 billion for the R&D Tax Incentive, it’s clear the EMDG is getting the short end of the stick, with plans to cut it down even more to $110 million per year.

2. The Impact of Budget Cuts

The EMDG’s budget has been cut from $137.9 million to $110 million. This decision comes after a 2022 review that said we need to match the EMDG’s money with how many people want it, to make sure it helps in a big way. With less money, fewer businesses can get the grants, and the grants they do get will be smaller.

When we look at the budgets for Austrade and the Department of Foreign Affairs and Trade (DFAT), we see some big changes:

• DFAT’s budget is 37% bigger than it was in 2014.
• Austrade’s budget has jumped by 54%.
• But the EMDG has gone down by 20%.
• The EMDG used to be 35% of Austrade’s budget in 2014, then 31% in 2019, and now just 18%.
• This tells us that while Austrade and DFAT have more money to play with, the EMDG is getting less and less.

3. Waiting on Round 4 of the EMDG

The next call for EMDG applications won’t happen until November 2024. This means any marketing from July 1, 2024, won’t get any help. This is a big gap, especially since previous rounds supported 9,293 grants. Without EMDG support next year, both new and old businesses who rely on it will miss out. And with new rules, it seems like only certain regions will get support, leaving out most of the world.

4. The Long Wait

Starting with Round 4, you’ll need to apply for the EMDG eight months before the grant year and then wait another 12 months to get any money. This long 20-month wait could really slow things down and make it harder for Aussie businesses to get the boost they need.

5. Are the New Changes Hurting More Than Helping?

Since 2021-22, there’s been a big change. The old way to test if you’re doing well enough to get the grant is gone. Now there’s a new system where you have to get approved first. This has led to more businesses getting smaller grants, and they can’t support bigger marketing plans. The rules for showing you’re exporting are easier, but the grants are too small to really help small businesses do well abroad.

All these new steps and rules are making things complicated without really adding anything useful. Instead of making the program harder to use, Austrade could have looked at how useful it is and maybe given it more money.

Austrade seems pretty set on its new ways, even though it’s not helping exporters as much as it could. This raises a big question about whether the government is really behind the EMDG. Every time a politician talks up exporting, they should remember what’s actually happening with the EMDG.

Aussie business owners who trade overseas should keep a close eye on these changes and speak up about them. How the EMDG changes will tell us a lot about how much the government supports exporters.