The Export Market Development Grant (EMDG) Scheme has been fundamental to the success of Australian SMEs export performance and funding needs to be reconsidered critics claim.
EMDG recipient businesses have generated in excess of $5 billion worth of exports and employ more than 60,000 Australians it is claimed. For the Federal Government’s investment of approximately $200 million in the scheme, the recipient businesses last year generated $5 billion worth of exports.
“This is a huge multiplier win for of the EMDG Scheme,” says Harvey Gartrell of BSI.
Gartrell points out that the EMDG scheme is a highly effective and major support mechanism for export oriented SMEs.
“It provides critical funding during the costly and complex initial phases of identifying and establishing new export markets, and helps business harvest the benefits of free trade agreements negotiated by the Government.
“SMEs need the support of the EMDG especially now that they are faced with a high Aussie dollar and tightening credit as a result of the GFC.
“The Government’s failure to provide additional funding in the budget for this scheme places further unnecessary pressures on export-oriented Australian businesses and hampers their efforts to realise existing and future export opportunities.”
Mr Gartrell says that exporters who were budgeting on receiving their full EMDG entitlement for 2009 EMDG claims are expected to get only 60% of this amount.
“This is expected to be a lot less in 2010, as funding has reduced from $200m to $150m,” he adds.
“We now call for the Government to reconsider the EMDG funding, as it did in 2008-09 and 2009-10, when it provided extra funding to ensure exporters received their expected entitlements.”
If the Australian dollar continues to trade down at the levels seen in the last week since the Greek sovereign debt crisis and Kevin Rudd’s proposed Resource Super Profits Tax, is now the time to wind back the Export Market Development Grant scheme?
