Ian Murray: Change needed to Export Market Development Grant

Ian Murray, executive director of the Australian Institute of Export, provides an overview of the Export Market Development Grant (EMDG) scheme and how changes may improve its effectiveness.

In May, we conducted a study on the effectiveness of the Export Market Development Grants (EMDG) scheme and the results proved once again that the program really works. From a sample of over 200, 64 percent of respondents said the scheme was a significant help when they first started out in export and only 15 percent said it was no help at all. When asked ‘if the scheme had not been available, would you have started exporting?’, 23 percent said ‘no’—substantial when you consider the thousands of companies that have entered the program since it started in 1974. Equally interesting was the number of respondents that, despite answering ‘yes’ to the second question, went on to say that without the scheme they could have pulled out, or that progress would have been slower.

Like all government programs, the EMDG scheme has had its fair share of reviews. Despite that, it lives on and we trust it will live on for many years. Right now it’s subject to the government review of export policies and programs to which a wide range of people submit; the majority will no doubt support the program, and many will promote change.

In May, we conducted a study on the effectiveness of the EMDG scheme and the results proved once again that the program really works for exporters. From a sample of over 200, 64 percent of respondents said the EMDG scheme was a significant help when they first started out in export and only 15 percent said it was no help at all. When asked ‘if the scheme had not been available, would you have started exporting?’, 23 percent said ‘no’—substantial when you consider the thousands of companies that have entered the program since it started in 1974. Equally interesting was the number of respondents that, despite answering ‘yes’ to the second question, went on to say that without the scheme they could have pulled out, or that progress would have been slower.

Like all government programs, the EMDG scheme has had its fair share of reviews. Despite that, it lives on and we trust it will live on for many years. Right now it’s subject to the government review of export policies and programs to which a wide range of people submit; the majority will no doubt support the program, and many will promote change.

Change is necessary. First and foremost, the government has to remove the uncertainty that has crept in with a likely shortfall this year of $28 million, and even more predicted for 2008/09. If uncertainly is allowed to continue, exporters will either stop spending or reduce their marketing budgets. This can only result in a negative impact on our trade balance, which the rising dollar and credit crunch are doing their best to reduce now. The easy answer of course is more money, which I obviously support, but not beyond $250 or $300 million. The difficult question is how and to whom the assistance should be given.