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!
All the best.
Stuart & team.