Overview

The Export Market Development Grants Act 1997 was enacted to provide non-discretionary grants to Australian businesses that have incurred specified expenses in promoting the export of their goods, services, intellectual property rights, and know-how. This legislation was introduced to address the problem of Australian businesses that have competitive products but lack the necessary resources and ability to effectively engage in successful export activities. The policy objective of the Act is to assist these businesses by providing partial reimbursement for their promotional expenses through grants, thereby facilitating the growth of Australia's export market. The Act was passed by the Parliament of Australia and includes provisions for the approval, variation of approval, and cancellation of approved trading houses, which are large organisations that can promote the products of other Australian businesses. The Act enables approved trading houses to receive a maximum annual grant of $500,000, significantly higher than the $250,000 limit for other applicants, provided that the products promoted are considered 'new' business for the trading house. Organisations seeking approval must apply to Austrade, and their approval can be subject to review and renewal every three years based on specific ministerial guidelines. These guidelines consider factors such as the applicant's resources, business record, financial strength, and the level of net benefit to Australia, among other criteria. The Act's framework aims to ensure that the grants are awarded to entities that can maximise the benefits of promoting Australian products in the global market.

Scope and Application

The Export Market Development Grants Act 1997 applies to Australian businesses that have incurred specified expenses promoting the export of their Australian goods, services, intellectual property rights, and know-how. The Act provides a mechanism for partial reimbursement of these expenses in the form of non-discretionary grants, aiming to assist businesses that may have competitive products but lack the resources or experience to successfully export them. Approved trading houses, which are large, well-experienced organisations, are eligible for a higher maximum annual grant of $500,000 compared to the $250,000 limit for other applicants, provided the promoted products are considered "new" business for the trading house. These trading houses are not subject to the general eight grant limit, allowing them greater flexibility in promoting Australian exports. To become an approved trading house, organisations must apply to Austrade, and their approval is subject to ministerial guidelines that consider factors such as resources, business record, financial strength, level of planning, and net benefit to Australia. Approvals automatically expire after three years but can be renewed if conditions are met. The Act's application is national in scope, applying across Australia and not restricted to specific states or territories. The Act does not specify any exclusions or exemptions but notes that cancellation of approval generally occurs when the conditions of approval are not met by the approved entity. The Act also extends its application through subordinate instruments such as ministerial guidelines.

Key Provisions

The Export Market Development Grants Act 1997 (the Act) facilitates the provision of non-discretionary grants to Australian businesses that have incurred specified expenses promoting the export of their goods, services, intellectual property rights, and know-how. Section 5 of the Act outlines the grant as a partial reimbursement of these expenses, targeting businesses that may have competitive products but lack the resources or ability to successfully promote them in export markets. To bridge this gap, the Act allows larger, experienced organisations known as approved trading houses to undertake the promotion of these products on behalf of other businesses, with a higher annual grant limit of $500,000 compared to the $250,000 maximum for other applicants. Organisations seeking approval as trading houses must apply to Austrade, as mandated by sections 6(1)(t) and 88(3). Approval is granted based on criteria such as resources, business record, financial strength, level of planning, and the net benefit to Australia, among others. The guidelines also specify circumstances under which approval would generally not be granted. Once approved, trading house status is valid for three years and can be renewed, although it is not subject to the general eight grant limit. The Act’s provisions are intended to ensure that approved trading houses are well-equipped and committed to promoting Australian products effectively. The Act imposes several obligations on approved trading houses. Firstly, they must ensure that the products they promote are new to their business. This means that while they can purchase eligible goods, intellectual property, or know-how from other Australian businesses, the promoted product must still be considered new to them. Secondly, trading houses must comply with the ministerial guidelines outlined in the Act, which are a disallowable instrument under the Acts Interpretation Act 1901. These guidelines require trading houses to maintain certain standards and meet specific criteria to retain their approval. Failure to meet these conditions can result in the cancellation of their approval. The Act also sets out specific consequences for non-compliance or breach of its provisions. Cancellation of an approved trading house’s status is generally limited to circumstances where the conditions of approval have not been met. Such cancellation can have significant repercussions, including the potential loss of eligibility for future grants and the inability to promote Australian products through the scheme. While the Act does not explicitly detail civil or criminal penalties for non-compliance, the potential loss of trading house status and the associated financial and reputational impacts serve as strong deterrents against breach.