EXPORT MARKET DEVELOPMENT GRANTS ACT 1997
Export Market Development Grants (Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020
Explanatory Statement
Authority
The Export Market Development Grants Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020 is made by the Minister for Trade, Tourism and Investment under paragraph 63(3)(f) of the Export Market Development Grants Act 1997 (the EMDG Act).
Background
The EMDG Act provides for a financial assistance scheme under which small and medium Australian exporters committed to and capable of seeking out and developing export business are repaid part of their expenses incurred in promoting those products.
Allocation of funding under the EMDG Act
The maximum amount of financial assistance a recipient of a grant made under the EMDG Act could receive each grant year is the provisional grant amount. This provisional grant amount is calculated in accordance with section 63 of the EMDG Act. For certain applicants applying for their third to eighth grant, their provisional grant amount is calculated using one of two processes, chosen by the applicant:
- Option A, calculated as the lesser amount of:
- The amount calculated in accordance with the Export Market Development Grants (Export Performance Requirements) Instrument 2018 made under paragraph 63(3)(f); or
- The amount calculated in accordance with paragraph 63(1), which is 50% of the applicant’s eligible expenses for the grant year less $2,500.
- Option B, calculated in accordance with the Export Market Development Grants (Australian Net Benefit Requirements) Determination 2018 made under section 10 of the EMDG Act.
Purpose
The Export Market Development Grants (Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020 amends the Export Market Development Grants (Export Performance Requirements) Instrument 2018.
Under this amendment the Export Market Development Grants (Export Performance Requirements) Instrument 2018 will not apply for grant year 2019-20. This means for applicants to whom paragraph 63(3) apply and who choose Option A when applying for grant year 2019-20, the alternative calculation of 50% of all the applicant’s eligible expenses less $2,500, prescribed under paragraph 63(1) will be applied.
Consultation
Consultation outside the Australian Government was not undertaken for the amendment. The amendment is part of the Australian Government’s overall immediate response to the COVID-19 pandemic. Additionally, the amendment does not have direct or indirect negative effect on business.
Commencement
This instrument commences the day after it is registered.
Statement of Compatibility with Human Rights
The amendment does not raise any human rights issues and is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
This is a legislative instrument for the purpose of the Legislation Act 2003.
Overview
The Export Market Development Grants (Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020 is an amendment made under the Export Market Development Grants Act 1997 by the Minister for Trade, Tourism and Investment. The legislation seeks to address the immediate impacts of the COVID-19 pandemic on Australian exporters by altering the calculation method for provisional grant amounts for the 2019-20 grant year. Specifically, for exporters opting for Option A of their provisional grant calculation, the amendment shifts from applying the Export Market Development Grants (Export Performance Requirements) Instrument 2018 to using the alternative calculation outlined in paragraph 63(1) of the EMDG Act, which involves 50% of the exporter's eligible expenses for the grant year less $2,500. This adjustment is intended to provide financial support to small and medium Australian exporters during a challenging economic period.
Scope and Application
The Export Market Development Grants (Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020 applies to small and medium Australian exporters who are recipients of grants under the Export Market Development Grants Act 1997, specifically for the 2019-20 grant year. It concerns the calculation of provisional grant amounts for certain applicants applying for their third to eighth grant, modifying the method prescribed by the Export Market Development Grants (Export Performance Requirements) Instrument 2018. The amendment alters the calculation process for Option A applicants, substituting the previous calculation method with an alternative of 50% of the applicant’s eligible expenses for the grant year less $2,500, as prescribed under paragraph 63(1) of the EMDG Act. This amendment has a Commonwealth jurisdictional reach and does not apply to state or territory legislation. The instrument does not specify exclusions, exemptions, or thresholds but rather modifies existing provisions to address the immediate impact of the COVID-19 pandemic on eligible exporters. The amendment is effective from the day after its registration, extending the application of the EMDG Act through subordinate instruments to ensure the timely and relevant support of Australian exporters during the pandemic.
Key Provisions
The Export Market Development Grants (Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020 amends the Export Market Development Grants (Export Performance Requirements) Instrument 2018, specifically for the 2019-20 grant year (Section 1). The most significant change is that the Export Market Development Grants (Export Performance Requirements) Instrument 2018 will not apply for this particular grant year. Instead, for those applicants who are eligible under paragraph 63(3) of the Export Market Development Grants Act 1997 (EMDG Act) and who opt for Option A, the provisional grant amount will be calculated using 50% of their eligible expenses for the grant year, minus $2,500 (Section 1). This amendment ensures that the calculation method for the provisional grant amount is clearly defined for the 2019-20 grant year.
Entities and individuals applying for export market development grants for the 2019-20 grant year must ensure they follow the amended calculation method outlined in the Instrument (Section 1). For applicants who choose Option A, the provisional grant amount will be based on the specified formula of 50% of their eligible expenses less $2,500, as detailed in paragraph 63(1) of the EMDG Act. This requirement aims to provide clarity and consistency in the grant application process during this particular grant year.
There are no specific offences, penalties, or civil or criminal consequences outlined in the Explanatory Statement for breaching the provisions of this Instrument. However, failure to adhere to the stipulated calculation method for the provisional grant amount could result in the application being deemed ineligible for the grant. This could lead to potential financial loss for the applicant, as they would not receive the financial assistance intended for their export activities.
In summary, the Export Market Development Grants (Export Performance Requirements) Amendment (2019-20 Grant Year) Instrument 2020 ensures that eligible applicants for the 2019-20 grant year use a specific calculation method for determining their provisional grant amount. This change aims to provide clarity and consistency in the grant application process, and failure to comply with this requirement could result in the application being deemed ineligible for the grant.