Export grant scheme reviewed for SMEs
Monday, 7 April 2008
Mike Preston, economics editor
Improving the export performance of small and medium sized businesses will be a key focus of a Government review into export policies, under a new issues paper released on the weekend.
The paper was prepared and released by the Mortimer Review, an inquiry into the Government’s export policies and programs launched by Trade Minister Simon Crean in February.
Along with small and medium enterprise export performance, the $150 million Export Market Development Grants (EMDG) scheme will be subject to extensive scrutiny by the review.
Better funding for programs designed to help small and medium sized business owners get advice and develop skills needed to start exporting should be considered by the review, according to Australian Institute of Export executive director Ian Murray.
Austrade’s TradeStart program, which funds private sector organisations to employ export experts to advise business owners on how to launch into export markets, has been highly effective and should receive more funding, Murray says.
“More emphasis on education and training for SMEs is absolutely critical, not just to provide them with the skills but also to give them the confidence to pursue business opportunities overseas by giving them the financial, marketing and negotiating skills you need to deal with distributors, agents and governments overseas,” Murray says.
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The Mortimer Review will also investigate the effectiveness and ways to improve the controversial EMDG scheme.
Gary Cronin, director of export consultancy Exportise, says he has seen many businesses make good use of the EMDG scheme, but one key change would significantly improve it – more funding.
“The scheme is not fully funded – this year it will be short about $28 million – so quite a lot of exporters will receive half of what they would have been entitled to, and that creates uncertainty given that people are reimbursed for money they spend up-front,” Cronin says.
The current system under which exporters receive grants in two stages should also be reviewed, Cronin says.
“Having to wait puts pressure on cash flow; the second payment doesn’t come until the end of the following financial year after the money was spent, so that’s a long wait for money that businesses would otherwise reinvest immediately,” he says.
The Mortimer Review will now begin its substantive inquiry, including taking submissions from experts and businesses, before providing a final report to Crean on 31 August.