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EMDG grant reforms proposed

THE Federal Government proposes to reform its export grant scheme as a way to meet its target of doubling the number of exporters by 2006.

Under plans unveiled by Trade Minister Mark Vaile, the annual grants pool of $150 million would remain unchanged, but the maximum available to individual firms would be reduced from $200,000 to $150,000.

In addition, the Export Market Development Grants scheme (EDMG) would be restricted to firms with an annual turnover of $30 million, down from $50 million currently.

The changes would also reduce the maximum number of grants available when entering new markets from eight to seven and remove the provision for additional grants for entering new markets.

Trade Minister Mark Vaile said the changes were aimed at promoting exporting to small to medium-sized companies as they were the key to doubling exports.

“Austrade estimates 97 per cent of all Australian exporting firms are small to medium companies,” Mr Vaile said.

“Small businesses are also the fastest growing sector of the exporter community, which increased in total from 25,000 to 31,450 in the last year.

“By directing the scheme to cultivating the rapidly increasing small business sector, we will better support our goal in doubling the number of Australian exporters.”

The EMDG scheme has been under strain over the past two years as the number of applicants continues to rise. This year, the grants administrator, Austrade says there has been a 23 per cent increase in applicants.

In the past financial year, 28 per cent of applicants requesting more than $60,000 received 75.6 per cent of their claim. Earlier this year a senate estimates committee warned that the strong growth in demand was likely to mean exporters with claims in excess of $60,000 were likely to get less than 50 per cent.

However, Austrade is already drawing criticism from some quarters who believe the level of grants should grow to cater for the extra demand, while others believe giving grants to small businesses who are more likely to fail internationally is irresponsible.

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