EXPORT MARKET DEVELOPMENT GRANTS ACT 1997
Export Market Development Grants (Significant Net Benefit) Amendment Guidelines 2010
Explanatory Statement
Guidelines to be complied with by Austrade in determining, for paragraph 24(b) of the Export Market Development Grants Act 1997, whether Australia will derive a significant net benefit from the sale of goods outside Australia.
The Export Market Development Grants Act 1997 (EMDG Act) provides for grants to specified Australian businesses which have incurred specified expenses promoting the export of their Australian goods, services, intellectual property rights and know-how. The grant is a partial reimbursement of the expenses incurred.
Among other amendments, the Export Market Development Grants Amendment Act 2006 amended the Export Market Development Grants (EMDG) scheme’s rules, set out at section 24 of the EMDG Act, for determining the eligibility of goods.
The amended section 24 provided that, to be eligible:
(a) goods must be made in Australia; or
(b) Austrade must be satisfied that Australia will derive a significant net benefit from the sale of the goods outside Australia.
Paragraph 101(1)(baa) of the amended EMDG Act provided for ministerial guidelines to be complied with by Austrade in determining whether Australia will derive a significant net benefit from the sale of goods outside Australia.
The Export Market Development Grants (Significant Net Benefit) Guidelines) 2006 (the 2006 Determination) was prepared to assist applicants to clarify whether their goods are likely to be eligible and to increase the transparency and accountability of Austrade’s decision-making about the eligibility of goods. The 2006 Determination has been applied to EMDG claims for the 2006-07 to 2008-09 grant years inclusive.
Based on Austrade’s experience applying the 2006 Determination, this instrument amends the 2006 Determination in one minor respect. This amendment requires that the generation of any substantial economic benefits for Australia, referred to at paragraph 4(2)(d) of the instrument, should be assessed having regard to whether the economic benefits are reasonably commensurate with the amount of grant claimed by the applicant.
This instrument is a machinery measure and does not substantially change the law, Austrade has not consulted with other Government Departments in the course of its preparation. It has not consulted directly with industry because to do so would have provided undue commercial advantage to a limited number of individuals and organisations.
This instrument commences on the day after it is registered and it applies to applications made for the 2009-10 and following grant years.
Austrade’s decisions in relation to whether a person meets the Australian net benefit requirements are subject to review in the Administrative Appeals Tribunal.
This instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003 and is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
Overview
The Export Market Development Grants Act 1997 (EMDG Act) was enacted to facilitate grants for Australian businesses that incur expenses promoting the export of their goods, services, intellectual property rights, and know-how. This Act aims to partially reimburse these expenses, thereby encouraging and supporting the growth of Australian businesses in the international market. The Act was introduced to address the need for financial support to help Australian businesses overcome initial barriers to entry in foreign markets. The EMDG Act was enacted by the Parliament of Australia and seeks to achieve policy objectives such as fostering export growth and enhancing the competitiveness of Australian goods in the global marketplace. The 2010 amendment to the act, through the Export Market Development Grants (Significant Net Benefit) Amendment Guidelines, aimed to refine the criteria for determining significant net benefits to Australia from the export of goods, ensuring that the economic benefits are proportionate to the amount of grant claimed.
Scope and Application
The Export Market Development Grants (Significant Net Benefit) Amendment Guidelines 2010 provide a framework for Austrade to determine whether Australia will derive a significant net benefit from the sale of goods outside the country, as required by the Export Market Development Grants Act 1997. The guidelines apply to applications for grants submitted for the 2009-10 and subsequent grant years and are aimed at ensuring transparency and accountability in Austrade's decision-making process regarding the eligibility of goods for the grants. The Act applies to Australian businesses that have incurred expenses promoting the export of their Australian goods, services, intellectual property rights, and know-how, with the grants serving as a partial reimbursement of those expenses. The geographic reach of the Act is national, as it pertains to Australian businesses and their export activities globally. The guidelines do not substantially change the law, and Austrade has chosen not to consult with industry directly to avoid providing undue commercial advantage to a limited number of individuals and organisations. Austrade’s decisions under these guidelines are subject to review in the Administrative Appeals Tribunal.
Key Provisions
The Export Market Development Grants Act 1997 (EMDG Act) governs the grant scheme that provides financial assistance to Australian businesses for promoting the export of goods, services, intellectual property rights, and know-how. Section 24(b) of the EMDG Act stipulates that to be eligible for a grant, the goods must either be manufactured in Australia or Austrade must determine that Australia will derive a significant net benefit from the sale of these goods outside Australia. This is a crucial provision, as it outlines the criteria for eligibility and underscores the importance of assessing the national benefit derived from exports.
The obligations imposed by the Act on Austrade include conducting a thorough assessment to ascertain whether Australia will derive a significant net benefit from the export of goods. This assessment is pivotal in determining the eligibility of an applicant for the grant. Austrade is mandated to consider various economic benefits, ensuring that the benefits reasonably align with the amount of the grant claimed by the applicant. This requirement enhances the transparency and accountability of the decision-making process, ensuring that grants are awarded judiciously.
Failing to comply with the provisions of the EMDG Act or the guidelines set by Austrade could lead to civil and criminal consequences. While the specific penalties for breaches are not detailed in the explanatory statement, the nature of the Act suggests that non-compliance could result in penalties that might include fines or legal actions. Given the legislative framework, any breach could also lead to the revocation of the grant, which could have significant financial repercussions for the businesses involved.
The Act also provides for the review of Austrade’s decisions regarding the Australian net benefit requirements. This review can be sought in the Administrative Appeals Tribunal, allowing for a formal challenge to the decisions made by Austrade. This ensures that there is a mechanism in place for addressing grievances and maintaining fairness in the grant application process.