Yesterday morning, the Government made two key announcements that will assist the tourism and export industries. An extra $49.8 million has been channelled into the Export Market Development Grants program in financial year 2019-20 and a $110 million initiative has been launched to help keep the agricultural and fisheries industries afloat in this Coronavirus pandemic.
Export Market Development Grants (EMDG)
The EMDG is intended to minimise marketing costs incurred by businesses seeking new overseas buyers. To offset their costs of marketing around the world, businesses will be entitled to additional cost reimbursements up to a maximum of 50 per cent of the total eligible marketing expense.
The Export Performance Test will not apply, recognising that businesses may not have expected the downturn in exports when making expenditure decisions over the recent months. Applications lodged in the 2020-21 financial year can claim expenses even if events have been cancelled due to circumstances beyond a business’ control.
The Government had already committed an extra $60 million in 2019 which combined with yesterday’s announcement takes total EMDG funding to $207.7 million for the 2019-20 financial year. More than 200 businesses in the tourism sector will directly benefit from this scheme.
Supporting the agricultural and fisheries industries by securing freight and waiving fees The Government has established the International Freight Assistance Mechanism, which will see return flights taking agricultural and fish products from Australia and bringing medical supplies, medicines and equipment for the Coronavirus response back to Australia.
The first flight is expected to leave within two weeks and is intended to run for a maximum of six months or until ordinary commercial markets return. The Mechanism may be extended if demand, value and need are clear.
To oversee this program, Mr Michael Byrne has been appointed as the International Freight Coordinator General. He will advise the Government on operational aspects like departure points, arrival points, freight mix, and product eligibility. Mr Byrne was previously the Managing Director of Toll Holdings and then Linfox as well as a non-executive director of Australia Post.
The International Freight Assistance Mechanism will have an initial focus on China, Japan, Hong Kong, Singapore and the UAE using Melbourne, Sydney, Brisbane and Perth as the key departure hubs. Potential other departure points are South Australia, Tasmania, the Northern Territory and Far North Queensland, but this depends on demand and suitable aircraft availability.
High-value agricultural and fisheries exports are the current focus (seafood, premium red meat, dairy and horticulture) while low-value products are not likely to be eligible. Such items will be transported by sea.
The Government expects exporters to make a financial contribution to the cost of their freight.
For further information and to register interest in the Mechanism, see here.
The fisheries sector will no longer have to pay the Australian Fisheries Management Authority (AFMA) levies for the rest of 2020 at a cost of $10 million.
This initiative forms part of the $1 billion Relief and Recovery Fund announced in the first round of stimulus spending on 12 March 2020.
The fund was set up to help those regions and industries disproportionately affected by the Coronavirus pandemic.