Export grants enhanced

The Federal government is setting aside an extra $50 million for export market development grants, even though it is planning heavy spending cuts in other areas.

Trade Minister Simon Crean made the announcement today. He said the government recognises that it is necessary to improve Australia’s trade performance.

“The funding for Australia’s Export Market Development Grants (EMDG) scheme will be boosted by $50 million, bringing total funding available for grants on eligible business expenditure in 2008-09 to more than $200 million,” Mr Crean said.

“And the promotional expenses which attract EMDG grants to Australian exporters will be subject to more generous assessment criteria and a higher maximum grant during 2008-09,” he added.

The EMDG scheme provides financial assistance to both aspiring and current exporters.

Legislation to expand the scheme was introduced to Parliament last Thursday.

Mr Crean said the previous Government, which cut the real value of grants from their 1995-96 level by half .

“If we want to secure our future beyond the resources boom, we have to engage much better with the fastest-growing area of opportunity – world trade,” Mr Crean said.

“The Government went to the election with one of its major commitments to improve Australia’s trade performance.”

“This expansion represents a down payment on that commitment.”

The EMDG expansion follows the Government’s announcement of a renewed emphasis on the Doha Round of trade talks, and its commissioning of the Mortimer Review of trade policies and programs.

Mr Crean contrasted the Government’s funding with the performance of the previous Government.

“When two years ago the previous Government made changes to the EMDG scheme, they failed to provide adequate funding,” he said.

“They raised the benefits but didn’t fund them. And they abolished any ‘net benefit to Australia’ test.

“As a consequence, funding fell short, we now find, by $27 million.

“So around 900 businesses will this year receive much smaller EMDG cheques than they were expecting from the previous Government.

“The previous Government conned these businesses. It made promises to them that it knew it was not funding. Those businesses have paid the cost of the previous government’s deceit.

“Unlike the previous Government, we have funded our commitments.”

The changes to the EMDG scheme include: more generous thresholds; the inclusion of patenting costs in the scheme; access to the scheme for non-profit export development bodies; restored accountability through a ‘Net Benefit To Australia’ test; and allowing all services to be considered eligible unless otherwise specified.

The review of export policies and programs chaired by David Mortimer, announced last month, will examine how the Government can further improve the operation of the EMDG scheme and help ensure that the scheme provides the most effective support for Australian exporters.

The EMDG scheme is administered by Austrade.