Article by Avant Group - Austrade releases major EMDG updates due to the COVID-19 crisis

Austrade releases major EMDG updates due to the COVID-19 crisis

Posted: April 15, 2020

If you are not sure what the Export Market Development Grant (EMDG) is – feel free to read more here.

We can report good news for Export Market Development Grant (EMDG) applicants, with a major boost to funding and a removal of the need to demonstrate export earnings in order to claim… so what does this mean for your business?

The EMDG is a reimbursement style grant. The grant is administered by the Government Department – Austrade which facilitates audit and payment of the grant, in line with an annual fixed budget. Because of this fixed annual budget, the EMDG is typically paid in two tranches.

An initial first tranche payment is paid on approval for any grant funds awarded up to $40,000. For businesses that may be eligible for an amount over this initial $40,000 payment, they would normally have to wait until the end of the financial year to be paid a percentage of grant funds they have been approved to receive, dependant on how much money is left in the EMDG funding pool.

In recent years, the second tranche payment has been paid on a pro rata basis of between 13-25%. Meaning if you were entitled to a $60,000 grant, you would receive the first $40,000 on approval and then may only see $7,000 of the remaining $20,000 you’ve been approved for at the end of the following financial year.

In response to the COVID-19 crisis, the Federal Government has approved an EMDG budget increase, enabling Austrade to now provide full funding on all approved applications that were submitted within the most recent 2018-19 EMDG cycle, with those second tranche payments already commencing. This means that not only will your latest EMDG application be paid out in full (100% on second tranche), if you’ve already been approved, you’ll also receive this cash in the coming weeks. For those applications yet to be assessed, we will be seeing full grant payment awarded on approval.

Furthermore, this budget increase has enabled Austrade to make a commitment to fully fund the next EMDG round, which opens on July 1st 2020.

The good news is that for first time applicants, you can include eligible expenditure for both the FY19 and FY20 periods combined. For applicants that are in their second grant or more, eligible expenditure for the next claiming window can be included for the FY20 period only. All payments under the next grant year will be paid at a rate 100% on grant approval. No more waiting for second tranche payments.

In the past, after you had claimed your first two grants, you would need to demonstrate export earnings in order to keep claiming. However, the government is aware of the difficult trading environment businesses are facing and accordingly, Austrade has relaxed the rules on mandatory exports for these Grant #3+ applicants – but only for the upcoming 2019-20 EMDG claim cycle.
Meaning, if you are a Grant #3 or more applicant and have no or minimal export income during the FY20 period, but have still incurred eligible expenditure, we can undertake an EMDG application for you, which for this grant round only, will based entirely on eligible expenditure incurred. Keep in mind, in order to claim you must have incurred $15,000 minimum expenditure in the FY20 period (or combined in FY19 & FY20 for first time applicants).

If during the FY20 you’ve had to cancel eligible marketing visits or trade fair events due to COVID-19 restrictions and have not been reimbursed directly or via insurance for eligible costs incurred, we can also include these expenses in this upcoming EMDG grant cycle.

If you’d like to chat further over specific circumstances or look to make an EMDG application in this upcoming cycle please contact Avant Group’s EMDG Manager Tegan Kiddle on email: [email protected] or via phone: 03 8640 0914.