Jan 20th, 2025
Senator Farrell
Minister for Trade and Tourism
Parliament House
Canberra ACT 2600
Via email minister.trade@dfat.gov.au; senator.farrell@aph.gov.au
Dear Senator Farrell,
Export Market Development Grants (EMDG) Round 4 – Many applicants will miss out – a flawed and unfair application process.
I write in relation the Export Market Development Grant (EMDG) program, given the launch and close of Round 4 late last year.
Recent press indication the lodgement process for Round 4 being chaotic. I agree with those comments.
I did write to you back in May 9th 2024 (copy attached – with your of 15th August response as well) and predicted the outcome that Round 4 has now produced.
I do accept you inherited a flaw (new approach) to EMDG given the changes that came about from 2021.
The system (spilt payment) for the matching demand against funding available being far superior to that was now implemented for Round 4.
In the past only a small percentage of applicants (less that 20%) were not paid in full, the process was much simpler, more efficient, effective and gave much more certainty than now is the case.
Round 4 was the first to apply a “first come first served approach”.
Austrade stating that the justification for the new approach was twofold.
• Client survey results that 29% of those surveyed agreed with such an approach.
• Comparisons with other programs.
Both are very shallow arguments and do not support the outcome of the program as it now stands, in addition :-
• 71 % of those survey did not support the change in approach.
• Other grant programs were of a much different type and therefore not comparable.
A “first in first served approach” only works when the expected demand is anticipated to be roughly inline with the available funds. I refer you to my prior correspondence.
This is not the case for EMDG Round 4.
Most round 4 Tier 2 applicants (those wishing to expand their existing markets) will not be successful and not offered a grant agreement.
For Tier 2 before the cut-off time – 1.20pm on the opening day Austrade accepting some 1148 applicants, far more than the 620 as stated it would be doing so on its website.
The 1148 also does not take account the 200-300 applicants who were also frozen out from completing their applications and are therefore not included in the total above.
Doing the numbers:-
620 possible places
1148+200 =1,348 actual and possible applicants.
620/1348 = 46% possible success rate for applicants, less than 50%.
I do not accept the additional applications up to 1148 were allowed to act a “buffer” of ineligible applicants – close to double the number you are going to pay.
Does not sound right to me.
On the opening day November 12th there were several lodgement issues for applicants: –
• Application system bugs/errors – to be expected of course with any new system.
• A very confusing approach to how to input ones forecasted marketing expenditure.
• A change in actual lodgement portal input fields to the published guidelines per the Austrade website – different questions, change in numbering and fluid attachment requirements.
• If you did not apply, you could not do so again until 2027/2028 – as for the last 50 years or so, exporters should be able to apply every year.
• For WA exporters , they had to be online by 7.00 am their time, with many excluded before their normal opening hours.
The above factors causing some exporters due to no fault of their own (taking additional time given the above) to miss the cut-off time.
In addition, I am also concerned for the number of regional exporters that with poor internet connection who may not have been able to access the EMDG portal at all.
I did raise this issue with Austrade last year and was told that any such client should get in a car to drive to a better internet location.
I found the response dismissive to say the least.
Less than 50% of Tier 2 applicants after spending a lot of time and effort will now be successful, this is simply a policy failure of the highest order, and I urge you to undertake a full investigation.
For Tier 3 the impact is similar but to a lesser degree as exporters had a longer lodgement window.
I ask you to undertake the following urgent steps :-
- Undertake an immediate investigation as to how such a terrible result for Tier 2 applicants came about – how many applicants did Austrade expect in the first place and why is the “buffer” of applicants over the funding so large – not in the order of 10%-15% as it should be.
- Undertake a review of lodgement numbers for Tier 2, by state and postcode to determine lodgement numbers by each type.
- Conduct an immediate survey to all applicants (including those who frozen out) and ask again, do you support a “first in first served approach”. It’s not fair to do so only to those that were successful.
- Inject additional funds for the 2025/2026 year to ensure that all eligible Tier 2 and 3 applicants are accepted and paid.
- That changes be made EMDG Round 5 to prevent such a similar result never happens again.
I am very keen to meet with you to discuss the above concerns.
I can arrange for an EMDG Round Table in South Australia for you speak to exporters first-hand about their EMDG Round 4 experiences.
I have done so for past Ministers. I would expect numbers to be more than 100. This could happen in other states as well.
Yours sincerely
Stuart Mitchell
Mitchell and Co
CC Mr Steve Georganas Steve.Georganas.MP@aph.gov.au