Thursday, Mar. 23, 2017

Budgets are usually about give and take, and first term budgets are likely to be more about take. From an international trade perspective, this Budget is probably more neutral than anything.

By Export Council of Australia · May 29, 2014

 <span>&copy;  </span>


Budgets are usually about give and take, and first term budgets are likely to be more about take. From an international trade perspective, this Budget is probably more neutral than anything.

It's encouraging to see the government leave the promised fifty million for EMDG in place. To be honest, even with the recent changes to the legislation, an increase in the number of grants able to be received by an applicant from seven to eight, the total grant funds available will probably be sufficient that most recipients will get what they expected. Sadly, that in itself is a concern because it forecasts a decline in demand for EMDG and is therefore less than encouraging in terms of export start-ups.

If the research is correct export companies are more than likely to be ahead of the game when it comes to innovation. It makes sense that when you are competing globally you are going to be more inventive and much more likely to invest in R&D. Certainly, the GFC and persistently high dollar means that exporters who want to hold market share and still maintain a healthy margin need to innovate.

Any reduction to the R&D Tax Incentive has to be a concern, so too the halving of grants for innovation and commercialisation. Commercialisation Australia is one of eight bodies to be replaced by the new Entrepreneurs’ Infrastructure Programme from next year,  with funding being reduced to only $484.2 million over five years. This is particularly concerning for our technology start-ups, who will increasingly be looking to leave Australia for more attractive investment opportunities overseas.

Anybody you speak to will tell you that if Australia has one fault in business it's our inability to effectively commercialise our research and development. Reductions in this area when Australia is trying to kick- start the manufacturing sector cannot be supported.

On the other side of the coin, it's encouraging to see the government invest in infrastructure. What affect this will have on export is questionable, if however, Australia can capitalize on the increasing demand in Asia for high priced, high quality food products, first class infrastructure will be needed to get product to market that is fresh and of top quality.

Finally, my last point is confidence. I'm not really sure the budget and therefore the government is saying to exporters we are ready, willing and able to support you. But in saying that, the government has turned its back on some of the Productivity Commission recommendation and increased the EFIC capital base, and at least for now failed to embrace the National Commission of Audit recommendations, which would see EFIC and EMDG gone and Austrade severely downsized.

Ian C Murray AM, Executive Chairman- Export Council of Australia

Login to Report Article

Recent Comments

0 Comments

Login to Comment