2002-2003

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

EXPORT MARKET DEVELOPMENT GRANTS AMENDMENT BILL 2003

 

 

 

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

(Circulated by authority of the Minister for Trade, the Hon Mark Vaile MP)

 

 

 

EXPORT MARKET DEVELOPMENT GRANTS AMENDMENT BILL 2003

 

 

OUTLINE

 

This bill will amend the Export Market Development Grants Act 1997 to:

 

·         reduce the income ceiling for applicants to $30 million

 

Currently, EMDG applicants (except for approved entities) must have income of $50 million or less during the grant year in order to be eligible to receive a grant.  This bill reduces the income ceiling amount to $30 million.

 

·         remove the $25 million export earnings ceiling

 

Currently, the Act precludes grants being paid to applicants (except for Approved Bodies and Approved Trading Houses) whose export earnings during the grant year exceed a $25 million ceiling amount.  This bill removes all references to an export ceiling amount.

 

·         reduce the $200,000 maximum grant to $150,000

 

Currently, the Act provides for all applicants (except Approved Trading Houses) to receive a maximum grant of $200,000.  This bill reduces the $200,000 maximum grant to $150,000.

 

·         reduce the maximum number of grants generally payable to applicants from eight to seven

 

Currently, the Act provides for the payment of up to eight grants to all applicants (except for approved entities).  This bill reduces the maximum number of grants payable to all applicants (except for these approved entities) from eight to seven. 

 

·         remove the Act’s new markets provision

 

Currently, the Act provides for applicants that have already received eight grants to receive additional grants based on expenses incurred in promoting to “new markets” (except for approved entities).  This bill removes the new markets grant provision.

 

These amendments adjust the scheme parameters relevant to most types of EMDG applicants .  However, as noted in Schedule 1, some of these amendments will not apply to “approved entities” which must be given “special approval” by Austrade, and which are already subject to other, approved-entity specific requirements that limit their access to grants. 

 

 

FINANCIAL IMPACT

 

Expenditure under the EMDG Act is set through annual Appropriation Acts.  This bill will not result in any increase in outlays.

 

 

 

 

ABBREVIATIONS

 

The following terms and abbreviations are used in this explanatory memorandum:

 

the Act;                       Export Market Development Grants Act 1997

 

Approved entities;      Approved Bodies, Approved Trading Houses and

Approved Joint Ventures, as defined in the EMDG Act

 

Grant year;                  The year in which expenses are incurred and income and export earnings

are received by a grants applicant.

 

 

 

EXPORT MARKET DEVELOPMENT GRANTS AMENDMENT BILL 2003

 

 

NOTES ON CLAUSES

 

Clause 1           This Act may be cited as the Export Market Development Grants Amendment Act 2003

 

Clause 2           The Act commences on the day on which it receives Royal Assent

 

Clause 3           There is only one Schedule amending the Export Market Development Grants Act 1997

 

 

SCHEDULE 1 - Amendment of the Export Market Development Grants Act 1997

 

Part 1 - Income for the grant year

 

Item 1             Currently, EMDG applicants (except for approved entities) must have income of $50 million or less during the grant year in order to be eligible to receive a grant.  This amendment reduces the income ceiling to $30 million.

 

Item 2             Refer to item 1.

 

Item 3             Currently, section 11 of the Act provides that, for EMDG purposes, the export earnings for an Approved Joint Venture do not include the export earnings for any member whose income during the grant year exceeds $50 million.  Consistent with Item 1 above, this amendment provides that the export earnings for an Approved Joint Venture will not include the export earnings of a member whose income during the grant year exceeds $30 million.

 

Item 4             Currently, section 53 of the Act provides that the expenses of any Approved Joint Venture member whose income during the grant year exceeds $50 million are not eligible for EMDG support.  Consistent with Item 1 above, this amendment provides that the expenses of any member of an Approved Joint Venture will not be eligible where that member’s income during the grant year exceeds $30 million.

 

Part 2 - Export earnings

 

Item 5             Currently, paragraph 7(1)(e) of the Act provides that EMDG grants are not payable where an applicant’s export earnings during the grant year (together with, where the applicant is a body corporate, the export earnings of its related companies where those companies also apply for a grant) exceed $25 million.  This requirement becomes largely redundant given a $30 million income ceiling.  Therefore, this amendment removes the export earnings ceiling provision.

 

Item 6             Refer to Item 5.

 

Item 7             Currently, paragraph 7(2)(b) of the Act provides that EMDG grants are not payable where the export earnings during the grant year of an Approved Joint Venture exceed $25 million.  Consistent with Item 5 above, this amendment provides that Approved Joint Venture applicants will not be subject to an export earnings ceiling amount.

 

Item 8             Refer to Item 7.

 

Item 9             Currently, paragraph 7(4)(d) of the Act provides that EMDG grants are not payable where the export earnings during the grant year of a person acting as trustee of a trust estate and claiming an EMDG grant exceed $25 million.  Consistent with Item 5 above, this amendment means that persons acting as trustee of a trust estate will not be subject to an export earnings ceiling amount.

 

Item 10           Refer to Item 9.

 

Item 11           Subsection 7(5) is no longer required, as a consequence of the removal of the export earnings ceiling amount for all applicants, and hence is repealed.

 

Item 12           Refer to Item 11.

 

Part 3 - Provisional grant amount

 

Item 13           Currently, paragraph 63(4)(b) of the Act limits all applicants other than Approved Trading Houses to a maximum provisional grant of $200,000.  This amendment reduces this maximum grant to $150,000.  The current provision relating to the combined grant ceiling applicable to related company groups will not be changed, but the $150,000 maximum will apply to individual applicants that claim as members of a group of companies.

 

Part 4 - Number of grants payable

 

Item 14           Currently, paragraphs 7(1)(c) and 7(4)(b) of the Act provide for applicants other than approved entities to be limited to a maximum of eight grants, except where paragraph 8(2) of the Act applies and these applicants are undertaking promotional activities in “new markets”.  This amendment reduces the eight grant limit to seven, but does not alter the current provisions relating to the number of grants that approved entities may receive.

 

Item 15           Refer to Item 14.

 

Item 16           Currently, subsection 8(2) of the Act provides for applicants (other than Approved Trading Houses and Approved Bodies) that have received eight grants to be able to receive additional grants for promotional activities in new markets.  As Items 18 to 22 remove the Act’s new markets provision, the subsection is no longer required and hence is repealed.

 

Item 17           This amendment derives from Items 14 to 16, which provide that no applicant can receive more than seven grants (other than Approved Bodies or Approved Trading Houses).

 

Part 5 - New market

 

Item 18           Currently, the Act provides for applicants that have already received eight grants (except Approved Bodies and Approved Trading Houses) to receive further grants based on expenses incurred in new market activities.  As this bill removes the current new markets grant provision, this amendment to the List of terms defined in Part 9 of the Act removes the reference to the term “new market”.

 

Items 19-22     Refer to Item 18.

 

 

 

Part 6 - Reader’s Guide diagram

 

Item 23           This amendment applies the provisions of Items 1, 3, 5, 9, 14, 15, 16, 17 and 18 to Diagram 2 in the Reader’s Guide.

 

Part 7 - Application provision

 

Item 24           All provisions of this amendment bill apply to any grant year that commences on or after 1 July 2003.