The federal government has announced a funding boost to the Export Finance and Insurance Corporation and its Export Market Development Grants scheme in its 2014-15 budget.
In its budget papers, the government outlined a once-off $200 million capital injection to the EFIC, which it says “reverses the decision of the previous government to take a one-off special dividend from EFIC in 2012-13”.
The government said the extra funds will allow the corporation “to better support Australian exporters and trade”.
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The government also said the Export Market Development Grants scheme will receive an extra $50 million, although this funding was announced in the mid-year economic and fiscal outlook in December 2013.
Overall it’s good news for exporters, after the National Commission of Audit recommended the government scrap both the EFIC and the Export Market Development program in April.
The commission said the government had room to reduce federal assistance to exporters “as the benefits of exporting accrue primarily to the business undertaking the activity”.
However, general manager of the Australian Institute of Export, Peter Mace, labelled the recommendations as “insane”, telling SmartCompany at the time the grants program is “seen to be very effective, especially in supporting small businesses which are competing against well-funded overseas companies”.
Rod Campbell, chairman of the Export Consultants Group and a board member of the Export Council of Australia, told SmartCompany the 40-year-old program is “the most successful economic stimulus program introduced by any government ever”.
“If you look at the exporters who have won awards, virtually every one of them have utilised the program in some way,” said Campbell. “It offers a leg-up for businesses that are taking risks to expand in overseas markets.”