Latest EMDG Updates: What They Mean For Your Export Plans

Posted on by Admin

04 October 2024

The Export Market Development Grants (EMDG) program has been a critical driver for Australian SMEs seeking to enter or expand in global markets.

To reinvigorate the program, Austrade, the agency responsible for administering the EMDG, is launching Round 4 in November 2024, following a strategic overhaul. This new round introduces key updates to improve the program’s focus and impact.

What’s Changed in Round 4?

Round 4 includes several important revisions that aim to better allocate funds and ensure more impactful outcomes.

Here are the highlights:

  • Revised Grant Tiers

New funding tiers provide a clearer structure, with higher maximum grants available depending on your business’s export stage, offering increased opportunities for qualifying SMEs.

  • New Allocation Process

Moving to a ‘first come, first served’ system, Austrade will assess and allocate grants based on the order in which applications are received. Once the available funds are exhausted, no further grants will be awarded, making early application crucial.

  • Tightened Eligibility

More stringent turnover requirements and a sharpened focus on businesses with viable export plans ensure the program is now more selective in its approach.

  • Target Market Focus

The program is now closely aligned with Australia’s Southeast Asia Economic Strategy, prioritising exports to Southeast Asia as well as other key regions such as the US, UK, India, and China.

  • Enhanced Requirements for Representative Bodies

Representative bodies seeking grants must now provide detailed plans of how they’ll support SMEs through export marketing initiatives and training programs.

  • Stricter Compliance

A more robust compliance framework includes increased probity requirements, and applicants will need to demonstrate they meet ethical standards and are up to date with tax obligations.

Grant Funding by Tier

In Round 4, the maximum amounts available under each tier for FY 2025-26 and FY 2026-27 are as follows:

  • Tier 1 (Export Ready): $20,000 to $30,000 per FY
  • Tier 2 (Exporting within Existing Markets): $20,000 to $50,000 per FY
  • Tier 3 (Expanding into New Markets): $20,000 to $80,000 per FY
  • Representative Bodies: Up to $50,000 per FY (no minimum amount)

While the funding caps have increased, businesses should be mindful that the eligibility criteria have also become more demanding.

Key Change: First Come, First Served Allocation

In a significant departure from previous rounds, Round 4 introduces a ‘first come, first served’ assessment and allocation model. This means businesses need to be prepared to submit applications as soon as the grant window opens, as funds will be allocated on a rolling basis until they are depleted.

With the high demand expected, many eligible businesses may miss out simply due to the speed at which funds are claimed.

Stricter SME Eligibility Requirements

The eligibility criteria have been updated, requiring SMEs to meet specific annual turnover benchmarks for FY 2023-24. These new thresholds include:

  • Tier 1: Minimum turnover of $100,000
  • Tier 2: Minimum turnover of $500,000
  • Tier 3: Minimum turnover of $1 million

Additionally, businesses must be able to invest at least $20,000 of their own funds into export marketing activities. Tier 3 applicants must show they are expanding into Austrade’s identified ‘key markets’ to qualify.

These tighter rules are likely to reduce the number of eligible businesses, especially smaller exporters.

New Market Focus for Tier 3

A targeted approach to export markets has been introduced for Tier 3 applicants. Austrade has identified specific regions—most notably Southeast Asia—as priority markets, reflecting the government’s broader economic strategy. Other key markets include the US, UK, and India.

While this focus aims to align Australia’s export efforts with strategic international growth areas, it may present challenges for exporters targeting different regions.

Increased Compliance Obligations

Round 4 introduces stricter compliance rules, including:

  • Ensuring that applicants are fully compliant with their tax obligations
  • Demonstrating that export products are of significant Australian origin
  • Adhering to ethical business practices that safeguard Australia’s trade reputation

Next steps

The updates to the EMDG program bring both opportunities and challenges. On one hand, the clearer structure and potentially larger grant amounts could provide greater financial support for exporters. On the other hand, the tighter eligibility criteria and the new ‘first come, first served’ process may exclude some businesses that previously benefited from the program.

We encourage SMEs to prepare thoroughly and submit applications early to maximise their chances of securing funding. The funding pool remains fixed, so timely action is key to avoiding disappointment.

Cooper Partners can assist you in navigating these updates, assessing your eligibility, and selecting the best tier for your business.

If you have questions about Round 4 or any other government grants, please contact your Cooper Partners engagement team on 08 6311 6900.

This newsletter is current as of 04 October 2024, however, please note that announcements and changes are being made by the Government and the ATO regularly.  Before acting upon the content of this newsletter, please contact us to discuss how the above applies to your specific circumstances.

 information is general advice only and neither purports, nor is intended to be advice on any particular matter.
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