Back again to give our last EMDG update for the year as the festive season approaches. Again, our newsletter is full of EMDG speak and jargon, sorry, but that is the world we live in.
Round 1 Milestone payments – most have now been paid. After a slow start, Austrade really got it act together and payments really started to flow in recent weeks.
96.5% of the Milestone submissions we lodged have now been assessed, approved and payments released.
The remaining submissions (you of course know who you are!) are still being assessed by the EMDG team and hopefully these will be finalized before the Christmas shutdown period.
We are doing our best to push these applications along without making irritating peanuts of ourselves, it does not actually help to cry and stamp your feet too much!
Round 2 Applications – currently being processed 20% of the applications we lodged to 30th September are yet to be reviewed, so the wheels are turning slowly for these clients, sorry about that.
Not sure if anything will happen before Xmas or not. We have been following up but see comments above about not wanting to be serial pests in this regard.
20% as well are currently being assessed and we should have further updates in the coming weeks.
60% are currently waiting for their grant offer to be issued, these should progress in the coming weeks as well, there has only been a trickle for grant agreements being issued to date.
Things will start to gather pace soon, but with Xmas period, probably in the New Year more likely than not.
For Round 1, grant offers were still being issued up to mid-June 2022. They should be done quicker this year, well that is my Xmas gift request to Santa (Austrade) anyway.
Round 3 Applications – will open next year This is for applications for 2023/2024. It still planned to happen in March 2023. For those clients we will be touch then.
Xmas shutdown 2022 We will be shutting down for the festive season from 19th December and be back on deck Tuesday 3rd January 2023.
Wayne is taking a much-needed break (his words not mine) as of 1st December, I will hold the fort until his return on 16th January. Please contact me with any queries.
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.
We did not send out a newsletter for September. Too busy with application lodgments.
There is a bit to catch up on, so….here we go:
Trade Minister – Senator Don Farrell. It is a bit late to advise, however, we confirm that Senator Don Farrell is now the current Minister for Trade and Tourism.
Senator Farrell is based in South Australia. He previously held the Shadow Ministry for Tourism.
Senator Farrell has three big challenges on his plate, the trade dispute with China, the stalled Free Trade Agreement with the UK and the EMDG program you are part of.
EMDG as you would be aware has changed over recent years, not what it covers and what it’s trying to do, i.e. helping SME grow their business overseas, but how you apply and the new additional steps to actually get paid.
In my opinion, the previous government undertook to change the program without any real industry consultation, or development of the right support of policy framework for the scheme.
Good idea (maybe!) to change things, but how things have been put in practice has been less than ideal and not that relevant to the exporting community during and post Covid.
The new EMDG process is clunky, involves more initial effort and fails to provide the promised simplicity and certainly to the scheme.
It fails several “pub tests” for sure. Things are getting better as time goes on of course.
Quite correctly, Senator Farrell has already called for an operational review of the scheme which I make comment about in the next section of this newsletter. A step in the right direction.
Operational Rivew of the EMDG program This was review was announced some months back.
I was able to meet with the report chair Mr. John Angley in Adelaide. I was able to express my views on matters that could be done better – in the main – to process and pay all grant applications sooner than later. I got a fair hearing.
A copy of my written submission and attachments can be accessed via the following link.
John has to report back to Minister by next month. I am unsure what we will be advised, if anything.
Major structural changes to EMDG will not be possible until the next 5-year review of the program due in 2024.
EMDG and the Federal Budget being handed down next Tuesday I do not expect any major announcement about EMDG in next weeks budget. If there is, I will have to eat my hat and send out an additional newsletter on the day.
The previous government had an election policy announcement of a $50M regional EMDG program. I cannot see that happening, being taken over by the current government. I was not a supporter of it in the first place.
Round 1 Applications for expenditure up to June 30th, 2022 – Processing Status For those applications that were lodged back in November 2021 we had to prepare and lodge “Milestone Reports” (the third step in the grant process) in recent months up to September 30th.
All done and dusted. Only one thrill seeker (Grant you know who you are) leaving it to the last day!
Once your milestone report is processed and assessed you get a letter to say that your grant payment will be paid within 14 days.
This has been changed to “14 working days after assessment”. This has not happened to date with payments taking much longer to hit the bank account than promised, given new systems needed to be developed, well so we are told anyway.
Things are getting better with two large processing runs in the last 2 weeks. About 2/3’s of applicants being told they are going to be paid, with the majority of those now actually paid. Austrade is continuing to process the remaining 1/3 and I would expect most will be done within the next month or so.
Round 2 Applications for Grant Approval for expenditure from July 2022 This is for applications for funding for this financial year and beyond.
These are the applications that were lodged prior to August 17th, the first step in the process.
Austrade have processed about 40% to the grant approval stage to date. They are working through the rest.
No grant offers have been made to date, nor is the capped amount per tier type know as well.
For Round 1 the funding caps were: Tier 1 Promised $40,000 Actual $15,000 Tier 2 Promised $80,000 Actual $24,600 Tier 3 Promised $150,000 Actual $36,600
Last year the announcement of the capped tier levels as above (bad news) was made the day before Xmas, (not what you want in your Xmas stocking!).
I expect for Round 2 it will be sooner, in the coming weeks. We will of course let you know as soon as we can.
Round 3 Applications for Grant Approval for expenditure from July 2023 This is for clients, not already in Rounds 1 or 2. It will cover expenditure from July 1, 2023, and beyond.
The application process (the first step) is stated as to open in March 2023. I do not expect it will be any earlier.
If you have any queries, please don’t hesitate to contact us.
Everybody has a database and newsletter that they send out to clients.
Sometimes the information means something, sometimes it does not.
This one is of course about EMDG and looming cut-off dates for lodgment to either apply for Round 2 – 2023 grant offer or to submit a milestone report to get your 2022 grant payment – cash in the bank.
Different horses for different courses.
You only need worry about one of the deadlines not both or not all.
If you have already been in contact with us, then this broadcast email it not for you. It’s a whole of database approach to make sure no one misses out.
We explain things in more detail.
EMDG Round 2 – 2023 applications and Beyond
This if you are not already in the EMDG system at this time (i.e. we have lodged an EMDG Round 1 2022 application, see the note below) and you think you will have overseas marketing expenditure this current financial year or in future years, then you need to get your skates on.
If you have not already contacted us, please email/phone us now!
The lodgment date for such applications is 3.30pm SA time (yes that is right) on Wednesday August 17th, 2022.
We are cutting off acceptance of any new application work on Friday 5th of August at 5.00pm.
If you do not lodge an application, you will then have to wait for Round 3 which will cover marketing costs from July 1, 2023 – that is next financial year.
EMDG Round 1 – 2022
This about step 3 of the grant process – the milestone report to get you paid.
We have submitted quite a few already. We are working on many more now and have other clients still to provide us some initial information so we can get started.
An email was sent out by Austrade to you some weeks back telling you to lodge your milestone report. This was bit confusing, as it did not explain things fully. It was sent to everyone, including clients who use a lodgment agent like us.
You will get another one next week or so. In addition, may have just got an invite to an online seminar on the same topic, you can ignore it.
You do not have to lodge your milestone report yourself. That’s what we do as part of our fee.
We must submit your milestone report by Tuesday 30th of August 2022.
Once we have submitted the Milestone report, you will receive an email from EMDG Sydney advising “you will be paid 14 days after receipt and assessment by Austrade”
In reality, you are in fact to get paid “14 days after assessment” by Austrade.
No milestone reports have been paid to date Australia wide. We submitted our 1st milestone report on July 1 and it is still unpaid.
We expect funds to start following in August – fingers crossed.
Please do not hesitate to contact us if you have any questions.
As predicted in our last newsletter the second tranche payment for EMDG old has been announced this week, with the final payout figure set at 37.3 cents in the dollar.
This means that for clients who are owed more than $30,000, you will not get the full entitlement, but 37.3% of the balance you are owed.
Austrade tell us that the payments will be coming soon, in the next weeks or so – hopefully before 30th June, but we cannot be 100% sure at this time.
We will be in touch with you to confirm your bank details as it happens.
EMDG New – Second Round for 2023 and Beyond
The opening date for the second round for 2023 and beyond has now been announced.
This only applies to new applicants who have not submitted an application/ received a grant offer for Round 1.
Applications will open at 9:00 am AEST on Wednesday 6 July 2022 for 6 weeks, closing at 4:00 pm AEST on Wednesday 17 August 2022.
We have already been in contact with some of you via a lengthy email before. We now ask that you send to us as best you can your Plan to Market and Expenditure Budget before 30th June, so that we can be ready to go when the gates open in two weeks’ time.
If you have not already contacted us, please do so at your earliest.
Things have changed a bit since our last newsletter.
A change in government, a new trade minister, postponement of the 2023 EMDG round and rush of year processing/audit activity by Austrade for 2021 applications and 2022 grant offers.
More details on each follow:
New Trade Minister – the EMDG cheque writer
Senator Don Farrell is the new Trade Minister. Senator Farrell represents South Australia.
He was not the ALP trade spokesperson in opposition. He was however responsible for Tourism covered by Austrade the government agency which most would be aware administers the EMDG program which this newsletter is focused on.
Pre-election the ALP promised a mini review of the EMDG as it transitions from the old to new method of applying – in advance not in arrears.
We support the review. There are some big bugs to fix in EMDG for sure.
It will not mean more money into the program, nor a change in your existing grant offer amount that applies for this year and beyond.
The current method of applying is clunky and it has not delivered the upfront certainty as promised. It is now a three-step process and is simply not as effective or efficient in helping Australia’s export efforts as it should be.
Once the Minister announces the review terms – we will make submission on your behalf at that time.
EMDG Old – Applications for expenditure up to June 30th, 2021
99% of these applications have now been processed. The remaining few applications will be processed post July 1.
EMDG old is therefore pretty much over, bar the “last drinks” shout – the timing and payment rate of the second tranche for grant entitlements greater than $30,000 – see comments below.
I am sad to see it go; it has served exporters very well over the years. Enough said.
EMDG Old – Second Tranche
The second tranche payment referred to above will be paid soon, maybe later this week, but will happen before June 30th.
Once it happens, we will be in touch with you to confirm your bank account details as we have in the past.
You will not get your full entitlement.
My best guess is that the rate will be 20% to 30% of what you are owed.
Although Senator Farrell will determine the rate (write the cheque – push the EFT button) it is not of his doing that you will not be paid in full or receive a lower payout rate than you should, that rests solely with the previous Trade Minister. See our earlier newsletter “Robbing Peter to pay Paul”.
EMDG old therefore will not finish with a bang – high/full payout, it will finish on a whimper – a lower than expected payout rate, close to the worst on record.
EMDG New – First Round for 2022 and Beyond
This is the application lodged by us on your behalf before 30th November 2021 – Step One.
About 90% of the applications have now been completed and clients have an executed Grant offer in place – Step Two.
Tier 1 clients and Tier 4 Representative Body clients have already been paid their 2021/2022 grant offer up front.
The next step for all – Step Three – is the submission of a Milestone report on what you accomplished and spent on marketing activities for the 2021/2022 year.
For Tiers 2 and 3 it will mean you are paid your grant offer based on your spend amount in fy21/22- so it’s all about providing the report to “show me the money”.
We have written to you already on an individual basis, so we can make a start on the reports on your behalf.
We can lodge the actual report from July, 1 via the Austrade portal. We are on to it.
EMDG New – Second Round for 2023 and Beyond
Austrade postponed the 2023 and beyond round in the week after the election. We support the delay.
There is no advice as to when the new round will open. It could be any day, so we are working on these applications as well. Again, we have written to you on an individual basis already.
Changes here at Mitchell and Co
Sophie is leaving our team to do bigger and better things.
Not too happy about it (just joking) as we are going to miss her a lot more than we are letting on!
We are excited for Sophie, as her new role is such a fantastic opportunity – too good to pass up for sure.
I will take over from Sophie in dealing with your applications, hopefully without stuffing things up too much.
EMDG Round 2 for 2023 and Beyond – Opening Date Delayed.
Last week, Austrade announced that the EMDG Round 2 lodgement period would open on Tuesday 31st May for a 5 week period, closing on Tuesday 5th July.
Things have now changed.
This is not going to happen.
Round 2 has now been delayed to a date in the future, yet to be advised. The reason being, which we support, is to give Austrade appropriate time to brief the new Government.
We were actually surprised that the original announcement was made in the week before the election in Government caretaker mode. Today’s advice is therefore good for exporters.
We remind you that this only applies to new applicants for 2022/2023 and beyond. There is no change to those clients who have already submitted an application/ received a grant offer for Round 1.
Austrade will advise you of the delay by direct email on Monday.
We will let you know the new opening date as soon as we have been advised.
EMDG Old – Year ended June 30th, 2021 – the last of the old program.
Most applications have now been processed. We are tracking at 85% now processed and paid. We expect the rest to be completed before the end of June. There will be second tranche for payments greater than $30,000. The amount is unknown at this stage. It will not happen until the 3rd week in June.
EMDG New – Year ended June 30th, 2022 – the first of the new program.
Grant Offers for Tiers 2 and 3 are now happening – with over 50% now issued, this is a big improvement from the 5-10% some weeks back. We now expect all offers to be out by the end of this month.
Russian Sanctions – President Putin and EMDG.
What does President Putin have to do with EMDG, you ask?
Sanctions have been imposed by the Australian Government against Russia in response to Russia’s invasion of Ukraine.
Australia will prohibit the supply, sale, or transfer of certain luxury goods directly or indirectly to, for use in, or for the benefit of Russia.
The sanctions, work both ways, not only imports from Russia to Australia, but also exports from Australia to Russia.
In Theory, for your EMDG application: –
1. Per section 20 of the EMDG Act, any expenses in respect of products that the sale or export of would contravene Australian law are excluded under the Act.
2. In addition to the above, any expense incurred after 7 April 2022 relating to an otherwise eligible product being exported to Russia and/or Belarus will be deemed by Austrade to be detrimental to Australia’s trade reputation, and as such excluded as an eligible expense per rule 47 of the EMDG Rules. This means all goods and services are effectively excluded from EMDG support for applicable marketing costs incurred in relation to Russia and Belarus.
In Practice, for your EMDG application: –
· If a business only markets to Russia and Belarus, Austrade will not enter (execute) into a Grant Agreement with you. You will be excluded from any EMDG support until further notice.
· To access EMDG support, you will need to change your marketing efforts to different markets going forward.
· Marketing expenditure up to April 7 incurred in relation to both Russia and Belarus is still claimable, it’s only costs after that date that are excluded for those markets.
· If you already hold an executed EMDG Grant Agreement, expenditure for any promotional marketing activities related to Russia/Belarus incurred after 7 April 2022 will not be supported through the EMDG funding.
· If you are exporting to other countries in addition to Russia and/or Belarus, grant funding for the eligible expenditure in those countries is still covered by EMDG.
If you have any questions, as always, feel free to contact us directly.
