Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2002-2003
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
EXPLANATORY MEMORANDUM
(Circulated
by authority of the Minister for Trade, the Hon Mark Vaile MP)
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.
Expenditure under the EMDG Act is set through annual Appropriation Acts.
This bill will not result in any increase in outlays.
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.
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.