2020 EMDG Changes: What You Need To Know

EMDG Changes 2020

As published in Inside Small Business on 23/09/2020

Many of you may have missed it, but we recently saw a major Government announcement for Australian exporters that will bring renewed confidence to many small and medium businesses.

The changes proposed to the Export Market Development Grant (EMDG) scheme will have significant and uplifting influence on the certainty of cashflow for all our exporters, who have been doing it tough this year due to the pandemic.

The outward show of support and backing began with an almost immediate response to the pandemic by the Morrison Government when in April, they poured a further circa $50 million into the EMDG on top of the funds that already existed in the current scheme.

We have seen firsthand how this funding has given our small-business clients a massive boost, and essentially the confidence and resolve, to push through the pandemic and continue to build their businesses and export their Australian products and services abroad.

The proposed amendments to the EMDG scheme, which followed the independent review conducted on the effectiveness of the EMDG for exporters, are more like a total renovation.

The review outlined 10 recommendations that highlighted the need for a streamlined approach to funding and a simplified application process.

The amendments are designed to offer Australian exporters several positive reassurances, to name a few:

  • Certainty with regards to the cashflow the scheme offers.
  • More simplicity with regards to understanding the scheme and the submission of claims.
  • A longer-term understanding of the cash that can be expected (in some instances a three-year runway of understanding the cash that will be received by the claiming business).

One of the major issues with the current program is that the total amount of funding to be received was by in large unknown. A certain initial portion was predetermined, but the final amount effectively being an unknown.

The review also identified that the issue many exporters faced in the scheme was the delay of payment. This was often a frustration for many, with some applicants having to wait in the region of two years to receive their rebate.

Trade Minister Simon Birmingham has listened and taken on board recommendations for improvement of the current scheme made by a commercial review headed by Anna Fisher.

Here’s our summary of the main take-home points of the proposed recommendations and amendments:

  • Upfront clarity on cashflow via a mechanism called “funding agreements” allowing claimants the opportunity to plan their marketing efforts in advance.
  • The funding agreements will have a three-tiered approach ranging over multiple years.
  • This tiered approach consists of payments that will give the exporters clarity into the amounts they are entitled to, thus removing the previous uncertainty of the scheme:
    • Tier 1: New Exporters; accessing $80,000 over two years.
    • Tier 2: Current Expanding Exporters; accessing a further $240,000 over three years.
    • Tier 3: Exporters Continuing to Expand; accessing a further $450,000 over three years.
  • All recipients of the EMDG scheme will need to be “export-ready” with a maximum of $20 million in turnover to be eligible under the proposed changes.

These proposed changes highlight the review’s plan to remove and eradicate the complexity, delay, and difficulty in accessing the EMDG while maintaining the scheme’s rules and guidelines of eligibility and expenses. The clarity provided within these changes will allow our Aussie exporters to go out and reconquer this current and post COVID world, knowing the government will provide support and financial assistance along the way.

The amendments have been agreed by the government in principle. The intended implementation date is set for 1 July 2021, subject to the changes being implemented through legislation.

Get in touch with Rimon Advisory to discuss these new changes and how you can benefit from them.

Gidon Pincus, Head of EMDG, Rimon Advisory


You may be interested to know if your business could use the Export Market Development Grant.

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