Mitchell and Co – August 2023 Newsletter

This is our August EMDG Newsletter.

There are two main topics to talk about – EMDG present and EMDG in the future.

EMDG – Present

This is all about “Milestone Reports” – the third step in your grant process – to get paid or to support for some the prepayments made in June last year.

This applies for Round 1 and 2 only. Round 3, this will happen for you next year.

The lodgement window opening on July 10th and going to October 31st.

However, there is simple rule to follow here – “Lodge early, you will be paid early”.

We are already on this band wagon; we have lodged more than a few already and importantly Austrade is processing a lot quicker than last year.

The only delay is that once your milestone report is approved, the payment run for your EFT only happens in a batch every 2 weeks. Not complaining, just stating a fact.

EMDG – Future

We have made comment about this in prior newsletters.

This is about the future shape of the EMDG program from July 1, 2025.
Sometime off – but it will come around sooner than later.

It will impact all Round 1 and 2 applicants and some Round 3 applicants as at June 30th, 2025 the date that your grant agreements expire, that is you only have EMDG coverage until that date.

You will have to apply for Round 4 (application, new grant agreement) when it happens, most likely in March/April 2024 or even later.

EMDG Round 4 will be harder to apply for and there will be less money to go around between applicants.

Minister Farrell has already advised in the recent budget forward estimates the funding level for EMDG going forward.

• 2024/2025 $157.9M
• 2025/2026 $110.0M
• 2026/2027 $110.0M

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.

Background on the nature of this current review is per the following link:

As per the discussion paper: 

“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.

Submissions close this Friday August 11th.

I have completed a submission as attached per the following link:

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.

Here is the link to the survey questions:

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.

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