All posts by : Stuart

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 30^th.

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 30^th, 2023 – see comments above.

• You might want to consider the tax implications of the payment before June 30^th 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 30^th, 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!

All the best.

Stuart & team.

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.

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.

Have a safe & fabulous Xmas & 2023
Stuart