Rudd must guarantee small business payments |
19th February, 2010 |
Evidence from Austrade at last week’s Senate Additional Estimates hearings has revealed that small businesses face being denied of at least $50 million for reimbursement of their export promotion activities, Shadow Trade Minister Warren Truss said today.
The Export Market Development ( EMDG) Scheme reimburses small and medium sized Australian businesses (SMEs) for up to 50% of expenses incurred on export promotion. Eighty per cent of claims are made by small businesses with turnover of less than $5 million.
Questioning of Austrade by Senator Alan Ferguson at Estimates revealed that:
• The budgeted amount for this year’s claims, after administration expenses, is $190.2 million.
• There has been a 15% increase in claim numbers, and a 20% increase in claim value, over last year’s expenditure on the Scheme of $195 million.
• Austrade has so far paid or partially paid 3100 claims out of the 5150 claims lodged, at a cost of $113.01 million.
• The total value of claims lodged is $269 million.
Mr Truss said that the outcome for EMDG claims payable in 2010-11 – that is for SMEs undertaking export promotion activities right now - will be even worse, as Labor’s budget for the Scheme falls to $150 million next year.
The EMDG Scheme is a capped program, so when the value of claims increases, the level of reimbursement goes down.
Mr Truss said that this calamity facing SMEs is a direct result of administrative incompetence and procrastination by Trade Minister Crean and the Rudd Labor Government.
“Mr Crean expanded eligibility for the Scheme as an election promise but only provided increased funding for the 2009/10 financial year.”
“Mr Crean then commissioned David Mortimer to review the Scheme and released the Mortimer Report on 22 September 2008. The Mortimer
Report recommended that all the changes to the Scheme introduced by Mr Crean be reversed. Mr Crean promised to respond to the recommendations by Christmas 2008. More than 17 months later, Mr Crean remains silent.”
Mr Truss said that the Prime Minister must now intervene and guarantee that EMDG grants will be paid in full in both the 2009/10 and 2010/11 years.
“If Labor really wants to stimulate the economy, keeping faith with small business exporters will go a lot further than pink batts and school halls”, Mr Truss concluded.
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