October EMDG Newsletter – Newsflash

What do Sharks and EMDG have in common?

They can both give you a nasty bite when you least expect it.

All EMDG current and future applicants must read this one.

A week is a long time in EMDG these days.

The timing dates and years to be covered for Round 4 of the program have been announced.

Not Good.

There is now to be a “Gap Year” for EMDG – so the acronym will now be “EMDGGY” for Round 4.

All Round 1,2 and the majority of Round 3 grant agreements (coverage of your overseas marketing expenses) expire as at June 30th, 2024.

Round 4 applications will now be able to be lodged from November 2024.

A delay from the expected period of March/April.

Round 4 expense coverage will be from July 1, 2025, not July 1, 2024.

There will be no EMDG coverage for the financial year 2024/2025, except for a small number of Round 3 (Year 2) The EMDG Gap year.

This is the first time ever in the 51-year history of EMDG that there is has been such a gap/non-payment year.

To repeat, so it sinks in:

• No EMDG expense coverage for 2024/2025.

• No EMDG expense coverage for 2024/2025.

Except for small number of Round 3 applicants.

Some exporters would not know about the scheme and have not applied before, in fact missing 2 years of coverage, 2023/2024 and 2024/2025, an unfair treatment to say the least.

Why is this gap year happening?

In simple terms, the money would normally be available for that year, has already been spent to fund Rounds 1, 2 and 3 in prior years.

Budget allocation in the future is being used to try to fix errors in EMDG policy design (causing over demand) of the past, the 2020 Anna Fisher review.

It’s the decision of the current Minister to skip applications for the 2024/2025 year.

It was not mentioned in the recent EMDG Refocus review process.

The alternative to doing so, would be to inject more money into the program.

Minister Farrell has already reduced the EMDG pot down from $157M to $110M so that was never going to happen.

I expect the “spin” about the changes will start to flow in the coming months.

The timetable again. This is just my guesstimate of things as no formal announcement of Round 4 is yet to be made.

November 2023 – advice on the new application Rules for Round 4 will start to flow – harder to access the scheme to reduce the demand on the EMDG pot (funding amount).

July – September 2024 – Milestone reports to be submitted for FY23/24 for Round 1, 2 & 3 applicants.

November 2024 – Apply and lodge your application/export plan to market & budget forecast.

Jan 2025 + Approval/grant offers and advice of the capped amount per “Tier” type.

July 2025 to June 2026 expense coverage.

July 2026 Milestone reports to the lodged and paid unless any prepayment of round 4 grant offers within the 2024/25 year.

In short, you must apply 8 months in advance of year you are seeking reimbursement of expenses for and then not be paid for another 12 months or so.

A 20+ month application to payment process, not grant best practice for sure in Australia or worldwide.

I am not sure anything can be done, cards and letters to the Minister will go unanswered.

We still have to deal with the upcoming rule changes to Round 4 as well.

The message now is simple:

Round 1, 2 & 3 applicants, you need to ensure you spend money on overseas marketing in this financial year to maximise your EMDG return.

Post July 1, 2024, there will be an EMDG drought until the 2025/2026 EMDG rains come again.

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