Will the 2018 budget help SME exporters?

“Overall, this is positive budget for SME exporters” said Heath Baker, head of policy at the Export Council of Australia (ECA). “But it’s an incremental step forward, not a major leap.
“The government has rightly been a champion of trade and has trumpeted its achievements in signing a number of FTA”, said Mr Baker. “But if you want to grow trade, FTA are only part of the answer. This budget goes some way to addressing SME exporters’ other needs — but there’s still more to be done.”
The ECA welcomes the $20 million allocated to establish an SME export hubs’ program, as well as extending funding for the export growth centres. These programs should help many SME make the jump into international business and the ECA looks forward to seeing the detail.
DFAT’s economic diplomacy efforts receive a valuable injection of $15 million. This will go towards expanding FTA outreach, helping businesses better access DFAT’s economic and security insights, as well as developing a strategy to address the ‘non-tariff measures’ that stop businesses from exporting. Austrade has received a small boost, including $3.2 million to develop a new national brand. Future budgets will need to commit significant money to implementing this brand if it has any chance of succeeding.
“Australia’s offshore agricultural counsellors play an essential role in facilitating trade in food and agriculture, and so adding six new counsellors is a wise investment,” Mr Baker said. “The ECA also welcomed additional funding for initiatives to increase agricultural access in key markets.
“Getting goods out of Australia should become a little easier with additional infrastructure spending, including the $400 million Port Botany line duplication. There’s also a $10.5 million commitment to complete a business case for a ‘single window’ for international trade — but this is slow progress given that implementing a single window was a 2016 election commitment.
“Aviation security will tighten, which could complicate exporters’ supply chains. While exporters accept the need to ensure aviation safety, these measures need to be implemented in a business-friendly way, and supply chain participants will need adequate time to adjust.
“On the downside, the Export Market Development Grant (EMDG) is still underfunded. This blunts some of the good measures in place to grow exports, as new exporters will only be able to fully realise international opportunities if they invest in building their brands overseas. Underfunding EMDG means they will lack the certainty and confidence to fully commit to building their brands.”
The ECA’s 2018 trade policy recommendations highlight practical steps the government can take to increase the number of SME exporting and the value they export. You can read the ECA’s recommendations here.

EMDG scheme changes to boost Australia’s exports

In an attempt to reinvigorate Australia’s exports, the Federal Government has announced changes to the Export Market Development Grants (EMDG) scheme, including an increase in the maximum grant and the turnover limit.

Businesses applying for a EMDG in the 2008-09 grant year are expected to benefit from the new rules, as the changes apply to applications lodged from 1 July 2009 and export promotion expenditure incurred from 1 July 2008.

The main changes include increasing the maximum grant by $50,000 to $200,000, the limit on the number of receivable grants for a business from seven to eight, and the maximum turnover limit from $30 million to $50 million.

The amended legislation will also replace the current list of eligible services with a ‘non-tourism services’ category to improve accessibility of the scheme to suppliers targeting foreign residents, regardless of the location of operation.

 

Other changes include:

• Reducing the minimum expenditure threshold by $5,000 to $10,000.

• Allowing costs of patenting products overseas to be eligible for EMDG support.

• Allowing state, territory and regional economic development and industry bodies promoting Australia’s exports, including tourism bodies, to access the scheme.

To find out more call Austrade on 13 28 78 and ask for your local EMDG office or download a copy of the Amendment Act, explanatory memorandum.

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