Printing Industries wants the Federal Government to keep the Export Market Development Grants (EMDG) Scheme and review its operation to increase accessibility across the industry.  

The scheme, which since 1974 has been a catalyst for Australian businesses to enter the export market, is under review by the Australian Government. Printing Industries, in its submission to the Export Market Development Grants Review, has called for the inclusion of all printing, labelling and packaging costs in the category of marketing expenses.  

The association has also recommended that the $30 million turnover entry limit for grant eligibility should be removed to allow companies of all sizes to access grants; wants the minimum $15,000 entry threshold removed and is seeking clarification from Austrade on what proportion of the current $150 million assistance is used for "administrative" related expenses.  

Submission details  

In its submission Printing Industries addressed the key issues as follows:  

Do we need the EMDG scheme?   Industry feedback suggests that companies using the EMDG Scheme like the scheme as it assists them to penetrate overseas markets. Printing Industries believes the EMDG Scheme plays a pivotal role in aiding companies to explore exporting opportunities.  

Has the EMDG scheme helped to generate exports?   Based on industry feedback to date, members companies are using the scheme to drive their export efforts and initiatives.  

Should the current $30 million limit apply?   Printing Industries appreciates that the current focus of the EMDG Scheme is to encourage small to medium sized companies become successful in export markets. The industry is dominated by small companies. Under the current EMDG Scheme arrangements, more than 95 per cent of the industry will be eligible to receive grants.

Printing Industries however believes that given low industry profit margins, all companies who are interested in pursuing exports and export related opportunities should be able to access the EMDG Scheme irrespective of their level of turnover.  

Should the scheme's rules be simplified?   The Association strongly advocates easing business compliance costs. The printing industry has often been a poor user of government assistance programs such as the EMDG scheme due to perceived high compliance costs.  

Under the current EMDG Scheme a company receiving a $15,000 grant has to comply with the same requirements as a company entitled to receive a $150,000 grant. Austrade may want to consider an arrangement where the cost of compliance is correlated to the size of grant allocated.  

Are there new categories of expenditure that should be included in the EMDG scheme?   Printing Industries supports the inclusion of all printing, labelling and packaging costs in the category of marketing expenses. The reason for this is that in many instances, products become more appealing to overseas customers due to the way they are presented and packaged.  

A wine exporter for example that has an appealing printed wine label is more likely to have his product noticed and purchased by overseas based customers than another wine exporter who may have a simple and possibly non-appealing wine label. Printing Industries believes that promotional marketing expenses should be updated to include electronic multi-media presentations as part of the category support material.

Also, currently, there is an allowable $200 per day for private expenses for the Australian company representative when travelling overseas. However, any prospective customer presentation/entertainment, by that Australian representative, is not eligible as an expense. Yet in dealing with overseas based clients especially ones from Asia, such contacts are essential to fostering relationships and business opportunities. An extension of the daily allowance to cover the costs of developing marketing relationships is supported by the Association.  

Is the current 50 per cent reimbursement for all eligible expenses appropriate?   Given the existing climate of low operating profit margins in the printing industry and given the current focus of the EMDG Scheme on small to medium sized businesses, Printing Industries supports a higher reimbursement proportion of eligible expenses. While we do not have a firm figure to recommend to the review, we would support an increase in the current 50 per cent reimbursement proportion.  

What is important however is the EMDG Scheme needs to be both consistent and creditable, whether it is 50% or higher, all eligible expenses must be reimbursed in full in order to maintain a sustainable and reputable government scheme.  

Is the current $15,000 threshold appropriate?   Given the scheme is a reimbursement based scheme, Printing Industries does not support the current $15,000 threshold and supports its removal. The Government should not place artificial obstacles in the paths of businesses who are interested in becoming exporters.

If the scheme is to encourage small businesses, then impediments such as the $15,000 threshold are not appropriate and hence should be immediately removed.  

Is the current budget allocation of $150 million to the EMDG scheme appropriate?   Company's budget on receiving their full 50% reimbursement entitlement in two instalments, the first $50,000 within three months of the application acceptance and the remainder in June of the following year. However, this full reimbursement of entitlement is subject to what outstanding funds are available from the $150 million allocation pool for that June period and is distributed on a proportional rate as a result of the $150 million allocation being fully spent.  

Printing Industries recommends an immediate increase in funding to at least $200 million with funding being adjusted each subsequent year in line with movements in the Consumer Price Index. Such an indexation will help preserve the real value of the funding over time.  

Printing Industries is also seeking clarification from Austrade as to what proportion of the current $150 million funding allocation is used for administrative related expenses. Printing Industries does not support any funds from the EMDG Scheme being channeled towards administration related costs.  

Is the 7 year limitation on grants appropriate?   The existing seven year limitation on grants would be appropriate for a particular market that a company may be attempting to enter. Printing Industries however recommends that if a company decides to target a different market then all eligible expenses related to the new market should also qualify separately for a seven year limitation.  

Should exporters be able to continue to access EMDG scheme after seven years?   Printing Industries supports exporters having continued access to the EMDG Scheme on the condition that they are attempting to establish their presence in new markets.  

Should the EMDG scheme be extended, and if so, for how long?   The Association supports the continuation of the EMDG Scheme for a further five years with a review taking place 12 months prior to the end of the five year period.

For more information contact Hagop Tchamkertenian on (02) 8789 7300 or  hagop@printnet.com.au