Austrade EMDG Update email sent today – now our turn!
We have been banging on about it for a while, now it is happening.
The EMDG portal for Milestone reporting for Round 1, 2 and 3 applicants will open on Monday 25th March, just before the Easter break! – however beggars cannot be too choosy as the saying goes. We will take it.
What does this mean? If you lodge early – post March 25th – you will be paid early before June 30th.
We have already made a start on the applicable milestone reporting information for several clients.
We will be ready to lodge as soon as the portal opens, and keeping our running shoes on to lodge as many milestone reports as we can over the coming weeks / months.
So it’s best to send your information to us now – even before Easter if you like – we have nothing better to do – sad but true.
This early lodgement process is only suitable if you have already spent double your grant offer amount, check your copy of the grant agreement for details.
If you have not spent the required amount, it will be best to wait until post July 1st to allow any additional expenditure to be included up to June 30th.
If we lodge your milestone report later (from 1st July), you will still get paid your grant offer amount, it just means you will be paid later that is all.
Round 1, 2 & 3 applicants have received an email from Austrade advising that they plan to open the EMDG portal 2024 Milestone reports in the coming weeks.
Austrade plan to open the milestone report portal earlier than usual for submission of activities and related expenditure incurred in the 2023–24 financial year.
Their IT System team is working towards opening the portal in March 2024.
As soon as the opening date is confirmed, they will announce this via email and their website.
They are also planning for the online portal to remain open throughout the remainder of the 2023–24 financial year and throughout the 2024–25 financial year.
Are you ready?
We want to hit the ground running and have made a start for some clients where we have access to their accounts, and we will keep working with you in the coming days / weeks.
Austrade also advise that payment will be made to those milestone reports submitted, once assessed.
So, the earlier we can start & submit the sooner you will get paid.
To receive your grant entitlement in full, you will need to spend double the grant offer amount listed in your grant agreement before 30th June 2024.
For those of you we have not contacted, let us know how we can help.
What a difference a new year makes to EMDG – well not that much yet, but change will happen in the coming months.
As foreshadowed in our previous newsletter last year – just getting the hang of saying that – changes will be happening for EMDG in 2024.
We do not know what the changes are in any detail at this stage, and I expect we will not know this until the middle of the year.
They will cover: –
EMDG Round 4 applications and coverage of EMDG expenses.
Rule changes to Round 4 – in essence to reduce demand on the scheme and hence the need to be able to meet the yearly reduction in EMDG funding from $157.4 to $110 million that applies post July 1, 2025.
EMDG Round 4 Timing
As explained before, Round 4 will now not happen until late 2024 or early 2025.
You will then apply and get approval of your grant offer before June 2025.
Your grant offer will cover EMDG based marketing expenses that you incur from July 1, 2025, to June 30th, 2026, and beyond, not for 2024/2025.
All current Round 1 and 2 applications expire on June 30th, 2024 (this year) so if you fit the bill to remain in the scheme (there will be changes to the current entry requirements)
A percentage of Round 3 applications also have grant offers that expire on June 30th, 2024.
Most exporters will therefore not have any EMDG coverage for next financial year 2024/2025 expenditure.
This applies to:
New exporters wanting to enter export markets and get EMDG support for the first time.
Exporters already in the EMDG program who want to claim again for EMDG support.
All Representative bodies unless those that applied for EMDG support for 2 years within Round 3.
You may be prepaid your Round 4 grant in June 2025; however, such a payment is not about what you spend in 2024/2025, it will have to be supported by what you spend in the following year 2025/2026 and beyond.
Over the Xmas break, I thought about what can be done about the above approach.
I have been mulling over in my head for weeks about writing a letter to the Minister.
I am almost finished; I must get the balance right between a big dummy spit and reasoned criticism. I expect to send off the letter in the coming days – I do not hold any hope it will make any difference whatsoever.
In a practical sense the Minister had to do something.
“However, with all due respect” – The reduced funding and lack of access to EMDG support for 2024/2025 makes no sense to me, it is a bit like dropping the baton in a 4 X 400 metre Olympic final – impossible to get back to win the race.
SME exporters that EMDG helps access world markets, do not compete amongst themselves, they are competing (racing) against exporters from other countries.
The lack of funding for new entrants to the scheme and that for representative bodies is one that will have the greatest impact and worrying to me.
The best thing you can do at this time:
As a Round 1, 2 or 3 applicant you must make every effort to spend double your grant entitlement for this financial year 2023/2024 before the EMDG gap year for most of you in 2024/2025.
Round 4 Rule Changes
These have not been released by Austrade yet.
We’ll let you know what changes there will be as soon they are released.
Back to the past for a moment.
Milestone Reports – Round 1 and 2 for 2022/2023.
Last financial year.
We only have a handful to go.
All payments have been made, it is about reports for those clients, who were prepaid in June 2023, to wrap the assessment process up.
Milestone Reports – Round 1, 2 and 3 for 2023/2024.
These are for this current financial year.
The reports will be due from July 1, but an earlier promise was made that they may be able to be lodged earlier than that.
As at today, the EMDG portal is not yet open for the upload of any supporting information.
We are however on to things already.
We have commenced processing for those clients whom we have online access to your financial information.
We’re simply trying to gather up a head of steam to get such reports in as soon as possible to get you paid sooner than later.
We do not know if there will be any prepayment of 2023/2024 grant entitlements in June this year as there was last year.
They can both give you a nasty bite when you least expect it.
All EMDG current and future applicants must read this one.
A week is a long time in EMDG these days.
The timing dates and years to be covered for Round 4 of the program have been announced.
Not Good.
There is now to be a “Gap Year” for EMDG – so the acronym will now be “EMDGGY” for Round 4.
All Round 1,2 and the majority of Round 3 grant agreements (coverage of your overseas marketing expenses) expire as at June 30th, 2024.
Round 4 applications will now be able to be lodged from November 2024.
A delay from the expected period of March/April.
Round 4 expense coverage will be from July 1, 2025, not July 1, 2024.
There will be no EMDG coverage for the financial year 2024/2025, except for a small number of Round 3 (Year 2) The EMDG Gap year.
This is the first time ever in the 51-year history of EMDG that there is has been such a gap/non-payment year.
To repeat, so it sinks in:
• No EMDG expense coverage for 2024/2025.
• No EMDG expense coverage for 2024/2025.
Except for small number of Round 3 applicants.
Some exporters would not know about the scheme and have not applied before, in fact missing 2 years of coverage, 2023/2024 and 2024/2025, an unfair treatment to say the least.
Why is this gap year happening?
In simple terms, the money would normally be available for that year, has already been spent to fund Rounds 1, 2 and 3 in prior years.
Budget allocation in the future is being used to try to fix errors in EMDG policy design (causing over demand) of the past, the 2020 Anna Fisher review.
It’s the decision of the current Minister to skip applications for the 2024/2025 year.
It was not mentioned in the recent EMDG Refocus review process.
The alternative to doing so, would be to inject more money into the program.
Minister Farrell has already reduced the EMDG pot down from $157M to $110M so that was never going to happen.
I expect the “spin” about the changes will start to flow in the coming months.
The timetable again. This is just my guesstimate of things as no formal announcement of Round 4 is yet to be made.
November 2023 – advice on the new application Rules for Round 4 will start to flow – harder to access the scheme to reduce the demand on the EMDG pot (funding amount).
July – September 2024 – Milestone reports to be submitted for FY23/24 for Round 1, 2 & 3 applicants.
November 2024 – Apply and lodge your application/export plan to market & budget forecast.
Jan 2025 + Approval/grant offers and advice of the capped amount per “Tier” type.
July 2025 to June 2026 expense coverage.
July 2026 Milestone reports to the lodged and paid unless any prepayment of round 4 grant offers within the 2024/25 year.
In short, you must apply 8 months in advance of year you are seeking reimbursement of expenses for and then not be paid for another 12 months or so.
A 20+ month application to payment process, not grant best practice for sure in Australia or worldwide.
I am not sure anything can be done, cards and letters to the Minister will go unanswered.
We still have to deal with the upcoming rule changes to Round 4 as well.
The message now is simple:
Round 1, 2 & 3 applicants, you need to ensure you spend money on overseas marketing in this financial year to maximise your EMDG return.
Post July 1, 2024, there will be an EMDG drought until the 2025/2026 EMDG rains come again.
There are two main topics to talk about – EMDG present and EMDG in the future.
EMDG – Present
This is all about “Milestone Reports” – the third step in your grant process – to get paid or to support for some the prepayments made in June last year.
This applies for Round 1 and 2 only. Round 3, this will happen for you next year.
The lodgement window opening on July 10th and going to October 31st.
However, there is simple rule to follow here – “Lodge early, you will be paid early”.
We are already on this band wagon; we have lodged more than a few already and importantly Austrade is processing a lot quicker than last year.
The only delay is that once your milestone report is approved, the payment run for your EFT only happens in a batch every 2 weeks. Not complaining, just stating a fact.
EMDG – Future
We have made comment about this in prior newsletters.
This is about the future shape of the EMDG program from July 1, 2025. Sometime off – but it will come around sooner than later.
It will impact all Round 1 and 2 applicants and some Round 3 applicants as at June 30th, 2025 the date that your grant agreements expire, that is you only have EMDG coverage until that date.
You will have to apply for Round 4 (application, new grant agreement) when it happens, most likely in March/April 2024 or even later.
EMDG Round 4 will be harder to apply for and there will be less money to go around between applicants.
Minister Farrell has already advised in the recent budget forward estimates the funding level for EMDG going forward.
A 30% reduction and the lowest funding level to EMDG since 1996. Again, just stating the facts.
In addition, Austrade is currently undertaking a review of what Round 4 and beyond should look like, to look at what markets will or will not be supported going forward (the targeting of the scheme) and changes to those who can apply.
This does not replace a formal independent review of the scheme due to be undertaken in 2024/2025.
“The government has also committed to strategically refocus the program to better support Australian exporters to develop new markets in line with the Government’s trade diversification priorities”.
EMDG support will be narrower that in the past. Any changes will not be about encouraging more emerging exporters to access the program, but quite the opposite, new rules to dampen the demand for the scheme, closing the gates at overcrowded rock concert comes to mind. How to remove those already in the arena and to prevent new ones on the outside still trying to get in.
I think the proposed changes to the program are a mixed bag of things that are bad, really bad, or really, really bad.
Some proposed changes were under the old EMDG program, so whatever is old is now new again!
As I say above, it’s not about helping exporters, but reducing the pool of exporters (concert goers) who will get a EMDG ticket.
I can now stop thinking about winning a golden ticket like in Willy Wonka and the Chocolate factory.
In my view, for the government to get a better return on it EMDG investment, EMDG needs to have a direct link to export sale performance.
It’s back to the past again, you get 2 EMDG grants without the need for export sales, to remain in the scheme, you must do so at measurable sales percentage that diminishes the longer you can stay in the scheme.
More money would fix EMDG, but that is off the table.
You can submit a survey response yourself. Your call.
Like all surveys most of the questions are leading you to a desired outcome, however you can choose not to answer any question – “I would prefer not to answer” as well, you do not have to leave your name.
The questions do indicate where some of the focus will be – markets to be supported – for no real reason Peru seems to get a mention!
Have a look see and compare the changes with your own position.
The next step in the process will be from the Minister to formally sign off on the changes – “Exporters have been consulted” etc.
If there are too formal EMDG rule changes, then such changes are subject to parliamentary approval, so one could argue the merits again – a cards and letters campaign to the Minister at that time. That will be later this year.
If the changes are just “EMDG guideline changes” they will just happen without any additional debate, to be announced sometime in the new year.
Minister Farrell – Credit where Credit is due.
EMDG is not the only trade related matter on Minister’s Farrell plate. It comes third after the current round of free trade agreements and the current trade dispute with China.
Well done to the Minister and Senator Penny Wong for the recent removal of the tariffs of on Australian barley to China.
A glimmer of hope for other exporters, lobster and wine at the top of the list.
The photo above is from 2009 when Simon was Australia’s trade minister. We took the photo opportunity at the time with the Minister and local Fed MP Steve Georganas when they paid us a visit at our office in Gawler Place.
Stuart is much greyer and fatter these days, Wayne’s non-existent hairline is unchanged.
June EMDG newsletter
Stuart’s Holiday Yes, we are back from our overseas trip to see our son in the UK and then some meanderings through Europe. We were there for King Charlie’s big day – bit of a wash out I might say.
Highlights include lost baggage (found a week later) on the way over and a bad case of kidney stones for me on the flights back. All good now!
Vale Simon Crean Simon Crean passed away on Sunday in Germany, from all his other achievements, including being just a nice person was Australia’s 46th Trade Minister from 2007 to 2010.
He understood the impact of the EMDG program in helping exporters and was a great supporter of it.
I have met all Trade Ministers (bar one) since Tim Fischer back in 1995.
Simon was the one of the best for sure.
I met him a number of times including a visit to my office in Gawler Place.
At another meeting he even found out it was my birthday, so he wished me well on the day – no cake, but it was very funny at the time, and I remember it most fondly.
Now back to EMDG!
EMDG and the May Budget EMDG funding has been reduced in future years (per the budget forward estimates), however the impact will not come into play until 2025/2026, the EMDG funding in that year will drop to $110M.
All current Round 1,2 and now 3 grant offers are unaffected and will be paid as promised.
The impact of the budget reduction will be felt on the scheme rules and parameters for Round 4 and beyond.
EMDG Review to happen in the coming months. To tie in with the advice of Minister Farrell to align the EMDG program to government trade policy, EMDG is to have a review in the coming weeks/months (not another one, I hear you groan).
Submissions will be called for and surveys requested. We will be touch then.
It’s not going to be an “alignment” with trade policy, but reduction of access/payment rules to align with the reduced funding indicated above.
Watch this space we will be in touch when things start to happen.
EMDG Round 3 The cap on the grant offers for Round 3 have now been announced and grant offers are now starting to be issued.
The above sums are similar to Round 2 offers, but are still well below the promised maximum grant amounts that the EMDG program is supposed to offer.
Grant offers are being sent out today and the coming weeks. We will send you a covering email to tell you what you need to do (MyGovID access and the like). You must accept the grant offer agreement; we cannot do so on your behalf.
Any problems reach out to me per stuart@mitco.com.au or 0439 859 199.
Round 1 and 2 – 2023 Milestone submissions The lodgement window for “milestone reports” required as part of the EMDG process has been set – 10th of July to 31st October 2023.
This is longer than last year to account for the two rounds of milestone reports, some $7,500 applications to be processed by Austrade.
If you were prepaid your grant offer in the last month (about 25% of clients) we still have to do your milestone report for you. If you were not prepaid, we are preparing your milestone report to get your grant paid.
We have already (well Wayne has!) been working on the information that is required to be submitted for the report. We cannot lodge until the portal opens on the 10th of July, but we are on the starting blocks already.
We have a pretty simple message here, lodge your milestone report early, you will be paid early.
If you lodge in late October, you will not see any money till much later – Xmas and the holiday period getting in the way.
Trust us, we are working to submit your milestone report ASAP for you.
It’s all about if your EMDG number comes up for an earlier payment of your 2023 grant entitlement.
Last Friday there was a flurry of activity, both from Austrade and a newsletter from us.
Now for a more detailed explanation of things.
Austrade sent its newsletter re pre-payment of grant entitlements to all EMDG contacts in its database.
It does not however apply to everyone.
The proposal only applies to EMDG Round 1 (2022 – covering 2or 3 years) and Round 2 (2023 covering 2 years) applicants under the program.
If you are NOT one of those, you can stop reading.
What is all the fuss all about?
EMDG is a “numbers” and “timing” game. It has a bit of chance/probability thrown in as well.
The numbers coming from the 8 grants you can get, what year you apply for, what you Tier number (1, 2, 3 or 4), what your capped grant offer is, how much you spend on overseas marketing and where you stand in the processing queue to be paid.
The timing comes from when your grant payment actually hits your bank account.
Austrade has decided to change the timing of your grant payment. Not for all, for some only. That is when the numbers come back into play.
For some clients you will get an offer from Austrade to be paid sooner than later. An email will be sent to you in the coming days/weeks to ask you if you want to accept payment of your 2023 grant entitlement (Round 1 or 2) before you submit your milestone report post July 1.
The prepayment therefore to happen pre- June 30th.
For some clients there will be no offer, you will be paid upon processing of your post July 1 Milestone report, in July, August, September etc.
It is Austrade’s choice (the 1982 film Sophie’s Choice comes to mind) who will be offered the early payment option. You have a choice to take it or not as well.
Now back to the numbers behind the decision and the likelihood/chance of the pre-payment offer.
There are about 7,000 Round 1 and 2 EMDG applications to be paid.
Austrade has indicated that the pre-payment offer will be made to about 2,200 or so applicants only.
The numbers: 2,200/7,000 – means 31%, so a 1 in 3 chance it could happen to you. Reasonable odds.
Austrade will also look at applicants and adopt a risk management approach to who they offer the payment to – for Round 1, the prior grant payment for 2022 compared to 2023 as an example. This is good practice to do so.
The chance of an upfront payment (in my opinion) will be lower than a simple 1 in 3 chance.
The offers will made via email in the coming weeks. I am not sure how long it will take from the day you accept the offer to when it hits our trust account (Round 1) or your bank account (Round 2) – back to the “timing game”.
All Round 1 and 2 applicants will be required to lodge a milestone report post July 1 or so.
The exact date is to be confirmed, we are already getting ready for it.
If you accept the pre-payment of your grant ( up to the capped figure in your grant offer agreement) and it is higher than the supported overseas marketing expenditure per your milestone report (that is you spend less that twice your grant amount – another number to consider) you will be ask to repay the overpayment or carry it forward to your grant entitlement for next financial year).
So, in terms of the numbers, you should only accept the offer for pre-payment if:
You are sure you will spend or have already spent double your grant offer in this financial year up to June 30th, 2023 – see comments above.
You might want to consider the tax implications of the payment before June 30th as opposed to waiting till next year – to be paid in July to October 2023 (I would guess)
Apart from the above reservations, my advice is simple “Take the Money.”
We are happy to chat once (and if) you get the grant offer.
The best thing all of you can do is to work on the supporting documentation for your overseas marketing expenditure up to June 30th, for the above mentioned and necessary milestone (not millstone) report.
We have already started nagging some of you for your milestone information. Well , Wayne has and will continue to do so.
Guess what I am going to do instead?
Go on holidays – from 27 April to June 10th – yes, a big number of weeks and the timing could be better, but hell bells – life is a numbers and timing game, not just EMDG.
Off to see our son in the UK as well as being there for Charlie’s big show.
I will be touch via email/phone on an ad-hoc basis. Wayne will hold the fort. He is a big lad!
What the difference between a Millstone or a Milestone?
A Millstone in the past was a heavy stone used to grind wheat to flour and the like and in more recent times used to represent a heavy burden that one must carry in life etc.
A Milestone – it’s the term used for the report that is prepared under the EMDG process to get your grant paid. It can be burden at some times, but really is the opposite when the Australian government helps offset your overseas marketing and sales activity. It’s a good thing. It’s the report “to show me the money.”
We aim to make the preparation of your required milestone report as easy as possible – a no burden approach for you as a client.
So, now an update of things and what EMDG milestone reports are all about.
As before, it all depends on where you fit into the program as a either a Round 1, 2 or 3 applicant.
We start in reverse order, Round 3, first.
Round 3 – covers 2023/2024 expenditure – Step 1 of the process now done – more to follow!
This was the recent activity that such applications all had to be submitted by last Friday. All done and dusted.
We had most of our applications lodged before the Easter break.
We did have a last-minute thriller seeker who contacted us on Friday mid-morning to lodge an application, got it in with hour to spare!
The submitted applications are in the process of being accepted by Austrade as “complete,” with about 50% already done.
The next step will be a review of the overall eligibility of each application in the coming weeks and then advice of the capped payment amount for each Tier (class of application), which should happen before June 30th.
Once this has happened, the applicable grant agreements will be issued to be executed by you via the MyGovID system.
Unless Austrade moves to a pre-payment model for your grant (this did happen for some for Round 1 applicants in 2021/2022), you will be paid your grant entitlement (50% of your overseas marketing expenditure up to the cap figure) post July 1, 2024, that is after the end of the 2023/2024 year.
That is when Round 3 Milestone reports must be submitted.
We will manage things for you as your application progresses through the above process.
Rounds 1 and 2 – covering 2022/2023 expenditure – Step 3 of the process – show me the money!
This is all about the submission of your “Milestone report” to seek payment of your grant entitlement for expenditure in this financial year 2022/2023.
• For Round 1 applicants – it will be second year seeking payment, you will then have a third year to go for 2023/2024.
• For Round 2 applicants – it will be your first year to seek payment and then you will have a second year for 2023/2024.
We cannot lodge the milestone reports until July 1, 2023.
We will do this for you, we’ll be in direct contact with you to start the process in the coming days/weeks, watch out for an email from Wayne.
If we have access to your accounting system, we can do 80% of the required work online for you with no Millstone burden/effort from you.
Otherwise, we need a transaction listing of your marketing expenses for 2022/2023.
In both cases we must also report on things that you did in the 2022/2023 year – i.e. what worked and what didn’t in terms of your overseas marketing activities – some general commentary and sales by country information.
Austrade has indicated in recent days that they are going to undertake pre-payment of certain Round1 and 2 grant entitlements before the submission of the 2022/2023 Milestone reports, that is in the coming weeks before June 30th.
We will provide more details in relation to this approach as information is sent out to the EMDG client base.
We will discuss the merits to take up this option up with you once more details are known.
For all clients, the applicable milestone report will still have to be submitted post July 1.
Austrade will also be using a new system (via a third-party provider – eftsure to confirm the bank details are the same as per the submitted application and executed grant agreement before the EFT payment is released.
You will be sent an email in relation to your grant to confirm you bank account details as a “supplier” the term used by Austrade’s accounts payable system.
For Round 1 applicants the process will a bit more complicated as the payment goes into our trust account – that is our bank account details and we then pay you.
We will provide applicable instructions what to do at the time.
For Round 2 applicants the payment goes direct to you, so the process will simpler.
In both cases we’ll manage the process for you.
We will be paid when you are – when the Milestone report is assessed and accepted as in the past.
Last week two things happened in relation to the EMDG program that I need to talk about.
Those being: – • Announcement of EMDG Round 3 lodgement dates • Release of the 2022 Operational Review of EMDG – the John Langley report
The announcement of the opening of Round 3 was sent in an email blast to all contacts on the Austrade EMDG database.
If you are already in the EMDG pool via Round’s 1 and 2 – Round 3 is not something you have to worry about.
The Operational Review does however foreshadow planned changes to Round 4 applications, which will happen this time next year in 2024.
These changes will impact all exporters/applicants in the future, in short it will be harder to access the program from 2024, so it does pay to have a good think about your grant status and planned expenditure now, while you are covered by Rounds 1, 2 and 3 in the immediate future.
I will do this first and then comeback to the operational review findings and the proposed changes for Round 4.
Here goes.
Round 1 – 21/22, 22/23 and 23/24 3-year coverage for EMDG.
This the round that commenced from July 2021.
For Tier 2, 3 and 4 (representative bodies) the grant offer period had a 3-year horizon.
It covers your EMDG expenditure (to the capped amount) for the 3 years , 21/22, 22/23 and 23/24. Round 1 ends on June 30th, 2024.
21/22 grant offers for Tiers 2 and 3 have already been paid upon the submission of your milestone report lodged by us. Payments were very, very slow in the initial stages, but much improved towards the end.
There are some Milestone reports still to be assessed by Austrade. These are for those applicants that were prepaid (Tiers 1 and 4 representative bodies). I expect these to happen soon.
This means you have been paid 1 grant (of the 8 your get in total) and one of the 3 years covered by your grant offer.
The next thing you have to do (we do it for you) is to lodge your Milestone report for this financial year 22/23 from July 1 2023.
Think about your export marketing activities and payments up to June 30th, contact us if you need to discuss things – pay for things now or next year etc.
We’ve made a start on some already, we will make contact in the coming months to get you ready for an early prompt lodgement post July 1. You will get paid soon after Milestone report is lodged.
Round 2 – 22/23 and 23/24 2-year coverage.
For Austrade’s own reasons (do not get me started), the period covered by the Grant offer was reduced from 3 to 2 years as well as the capped grant amount per year.
Round 2 will therefore end on June 30th, 2024 – the same as Round 1.
Round 2 payments for each tier being reduced from Round 1 levels to:- • Tier 1 – $10,000 – for those new to exporting. • Tier 2 – $18,000 – for those expanding their export sales. • Tier 3 – $28,000 – a “strategic shift” required to one’s export efforts. • Tier 4 – $50,000 – Industry representative bodies.
As with all Rounds/Tiers to get the above sums, you need to spend double to claim 50% back.
EMDG is still reimbursement based. Your grant is capped at the above figures, spend more than double the cap – tough luck, your grant payment remains unchanged.
We lodged your application back in July/August last year. Many of you would be aware that there were problems with the MyGovID log-in process to get your grant offer accepted, I think it would have been easier in some cases to walk over hot coals!
But well done, you got there in the end. As your lodging agent we cannot accept the grant offer on your behalf. You must do it. We can only offer support or encourage from the sidelines as to how fix blockages in the process.
To date over 75% of clients have had their grant offers executed.
The balance still being processed or acceptance is being held up by above mentioned MyGovID issues.
What you need to do next, like Round 1 (Year2) is to lodge your Milestone Report for this financial year 22/23 from July 1 2023.
Please think about your export marketing activities and payments up to June 30th, contact us if you need to discuss things – pay for things now or next year.
This will be your first payment.
You only get 2 years coverage – a change from Round 1.
Your second will be covered by next financial year 23/24. Your grant offer finishing on 30th June 2024, the same as Round 1.
Round 3 – 23/24 1 Year Coverage.
This is one of the big announcements by Austrade last week.
The lodgement period is short.
It is from 15/03/2022 9.00am AEDT to 14/4/2022 4.00PM AEST – some 28 days, but with allowance for the Easter Holidays period. Christmas Grinch coming early!
Key changes from Rounds 1 and 2.
• You are only getting a grant offer period of 1 year. Again, do not get me started, the rationale behind the changes is not based on helping exporters with forward certainty but to help Austrade with its own forward planning. • Your grant offer will cover the period 01/07/2023 to 30/06/2024. Your grant offer will expire at the same time as Rounds 1 and 2 – see the theme arising here? • There are changes to the terminology “Strategic Shift” – which in essence will make it harder to access Tier 3 status. • Austrade now requires businesses to meet their taxation obligations, that is, comply with all the relevant Australian Taxation Office (ATO) legislation, rulings, and guidelines – to ensure grant funds go to export promotion, not to pay tax debts – strange but true.
There are now 3 different sets of guidelines for each of the three rounds – confusing to say the least.
An exporter doing the same thing in terms of export promotion, being assessed differently under different rules and different funding levels.
You cannot use EMDG proceeds to pay your any ATO tax debt. This is nonsense as you still getting paid on reimbursement basis, you spend your money on marketing and get 50% back – you do not get paid first. The process will be manageable just another part of the EMDG simplification process!
We’ll be touch with you in the coming weeks to get the ball rolling on your Round 3 application as to what we need and get the job done.
We do not know what the funding level (Tier caps) will be for round 3 – but it will be closer to Rounds 1 or 2 as opposed to the maximum grants promoted under the scheme ( before the fine print) kicks in.
In summary – Rounds 1, 2 and 3.
All current rounds therefore expire on June 30th, 2024.
So, all applicants to remain in the scheme (up to 8 grants not having been paid) will have to re-apply in Round 4.
The warning bells are already ringing for Round 4, so best to read on for 5 minutes or so.
Round 4 – From July 1, 2024, the future is just around the corner.
In the operational review mentioned above, John Angley reported the following: “Under EMDG 2.0. the grant amounts did not meet stakeholder expectations.”
Let me explain the “Govt speak” – “did not meet expectations” actually means as follows: It means (in my view), one of the biggest cock ups in terms of the rules of engagement for EMDG since the history of mankind, well since EMDG commenced back in 1973/74 – close to 50 years ago.
• The scheme design was flawed from the start, with no link to export sales performance. • The scheme has not delivered promised greater certainty to exporters. • Funding certainty – over a 3-year period – has been cut back to one year. • Promised funding levels (expectations) have not been met – as above. • Exporters doing the same thing are paid different amounts depending on when they apply. • The scheme funding is based on estimates but is paid on actuals. • The scheme is not an upfront grant, it is preapproval only, it still reimbursement based like before.
Basically the “Great Expectations” of the changes to the program arising from the 2019 Anna Fisher report have not been met.
Thinking of Charles Dickens as the author of the novel of the same name, a more like for like reading with EMDG would be “Bleak House”.
In Bleak House a family waits in vain for an inheritance to arrive, but it never does – a bit like the promised max grants (s.t. demand – fine print) for the EMDG program – promised, but never delivered.
EMDG under the new rules has simply been oversubscribed, too many applicants have accessed the funding on a cumulative basis.
Two ways to fix this of course. • Funding Fix – More Money – that’s not going to happen. • Rules Fix – Change the rules of entry to make it harder to access it.
The operational review makes it clear the latter option is going to happen.
Round 4 will be much harder to apply for.
Some of the proposed changes are mentioned in the Operational Review report. • Minimum turnover requirement. • Minimum marketing spend requirement. • Export Readiness Test? (Isn’t that what the required Plan to Market is?). • Change the 50% reimbursement rate. • Priority based on Industry sectors. • Reduce the number of years from 8. • Close EMDG on first in grant basis up to a set number of applications.
The changes must go through the parliamentary process for approval. Most are a case of “Back to the Future” where in place under the old EMDG framework.
There will be a consultation process of course but I am not too sure how it will pan out – will exporters be listened to or not?
I think the changes will not be known until December of this year and Round 4 will happen about this time next year.
If you are in EMDG now for Rounds 1 or 2 – you really need to focus on maximising your grant offer/grant applicable EMDG expenditure up to June 30th 2024.
If you are not a Round 1 or Round 2 applicant & are thinking of applying for Round 3 at all – go for it!!
You will at least have your hat in the ring for the 23/24 year. Once the rules of engagement for 2024 are known (early next year) you can then decide to accept your grant offer or not – maybe going for Round 4 or deciding that year may not suit you, so having at least 23/24 to be paid to you.
Happy to chat. Please call away.
A good EMDG story at last.
If you are still reading, well done you deserve a medal. But wait there’s more!
I just got a grant application under the old scheme paid after 11 years and 3 months. I lodged on November 30th, 2012.
We never gave up and got paid in full. There were tears (not Tiers) of joy I can tell you when the payment finally hit the bank account. No Bleak House reading for this one.
