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 email@example.com 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.
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.
Round 2 – Grant offer agreements – Use of the Australia Branding Austrade have made a change to the grant offer agreements for Round 2 applicants for EMDG support.
This covers applications for marketing support lodged earlier this year and covering grant reimbursement of marketing expenditure from 01/07/2022 and beyond. It has no impact for Round 1 applicants. It is a change for Round 2 and beyond.
The change being:-
Under section B – Activity The Grantee must use their best endeavours to include the Australia Nation Brand logo on all signage, publications and promotional activities used during the Activity Period in relation to eligible products. Any use of the Australia Nation Brand logo must be done in accordance with the Australia Nation Brand Guidelines, including all requirements in relation to sizing, colouring, alignment and placement.
You basically sign up to use the logo in good faith and not to use it in any misleading way etc.
There is no charge.
It is not a mandatory requirement as stated.
However, you do need to as least consider it and determine if it is in your best commercial interests to incorporate or the logo in your advertising materials, invoices, packaging, website or email tags.
Just have a think about it and make your own business decision to use it or not.
It is not shown on the website of Austrade itself – they use their own branding image.
The new brand was launched in February of this year, by the Nation Brand Advisory Council
The logo replaced the famous “Golden Wattle” from 2019 with its very strong resemblance to the COVID-19 virus and hence was abandoned.
Prior to the Golden Wattle it was “Australia Unlimited”
It’s not the same as the Australian made Logo (you have to pay to use that one)
Another email with some fresh news for exporters that has happened today.
Interest rates are rising, cost of living is rising, cost of electricity, export shipping costs and the like.
EMDG is however bucking the trend, going down, not up!!!
You will be sent an email later today from Austrade.
Round 2 Funding Caps.
The Minister and Austrade have set the caps on the maximum grant payments for Round 2 of EMDG.
Round 2 is for those applicants who applied in July/August to seek pre-approval of expenditure for this financial year 2022/2023 and beyond.
The maximum grant amounts by Tier level being: • Tier 1 $10,000 down from $15,000 in Round 1 a 30% reduction. • Tier 2 $18,000 down from $24,600 in Round 1 a 27% reduction • Tier 3 $28,000 down from $36,600 in Round 1 a 23% reduction • Tier 4 $50,000 down from $90,000 in Round 1 a 44% reduction
The reason behind the decision is simple, EMDG is a demand driven scheme, the demand for funds again exceeding the supply of money (unchanged in the recent budget). It’s a rationing process as per Round 1.
For both Round’s 1 and 2 the maximum grant amount in practice is well below those promulgated in theory for the program.
For Round 2 it will now mean (taking over from Round 1) the lowest maximum payout figure in over 45 plus years of EMDG.
Senator Farrell the current Minister of course has signed off on the above.
It is not his fault at all. He is just dealing with the poor EMDG policy planning, program design and implementation inherited from his predecessor and failure of the changes to the program following on from the 2019 review. Do not get me started again about this, I will never stop.
Two other major points: –
Round 1 There is no change.
You will still be paid are per the caps for that round and your agreement will cover 3 years expect for Tier 1 applicants.
It’s another flaw that two exporters in the same year FY 2022/23 (Round 1 & Round 2) doing the same things and spending the same sort of money will be paid different amounts of EMDG support. Pretty dumb idea to me.
Round 3 There is no change
This is still expected to happen in March 2023.
Other News The email will also refer you to the Austrade website in terms of some processing stats for the Round 1 Milestone reports and Round 2 grant offers. We of course will manage those things for you.
If you have any questions, please don’t hesitate to contact us.