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Export funding 'like performing open-heart surgery'

Business

Two out of three South Australian business applicants have failed to secure government funding to grow their exports, with the scheme being labelled “not achievable” and the application process like “performing open-heart surgery”.

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State Opposition spokesman for investment and trade Tim Whetstone told InDaily businesses keen to export their products had abandoned the State Government’s Export Partnership Program because it was too difficult to secure funding.

“A lot of instances they’re going ‘look, we’re trying to run a business, we’re trying to get into the exports market and now we’ve got to jump all these hoops and hurdles and rules to play the government’s game and we’re just not getting the help we need,” Whetstone said.

“There is money out there [for] exporters that hasn’t been achievable, it was an absolute failure.

“What we’re seeing are streams of money that exporters either can’t access or the criteria is too hard.

“To write an application for grant money is like performing open-heart surgery.”

In 2015 the government announced the Export Partnership Program, a rebadging of its five-year-old Gateway Business Program.

Whetstone said the former program was allocated $1 million a year to assist SA businesses with their export ventures with the unallocated portion rolled over.

The relaunched scheme continued the dollar-for-dollar funding model to help businesses pursue international market opportunities.

Minister for Investment and Trade Martin Hamilton-Smith said at the launch last March that funding for the program would be increased from $492,000 to $731,000 in 2015-16.

Exporters can apply for funding of up to $50,000 over two years for eligible export projects and activities.

“Grants may be used to support coaching, training, market intelligence and mentoring in order to plan for international opportunities and build their export capability,” Hamilton-Smith said in March.

“Our redesigned export program will help companies get access to the right tools and support to grow and build international networks that can often be financially challenging to access.”

Government analysis obtained through FOI and seen by InDaily shows that just over 33 per cent of applicants to the first two EPP funding two rounds  were successful.

In round one (April 2015), of the 34 businesses that applied for dollar-for-dollar reimbursement request, 22 were rejected, 12 were successful and 14 had pre-panel refusal.

First round businesses applied for $1,181,258 in funding and $343,825 was approved.

In round two (July 2015), 62 businesses applied for $688,850 in funds with 42 applications rejected, 20 approved and six were declined pre-panel.

The program approved $450,406 in reimbursements.

Three out of 96 applications in the first two rounds received the maximum $50,000 reimbursement.

The third round in October last year attracted 37 applicants applying for $1,145,148 with 22 businesses approved for $415,596 in reimbursements.

“Out of the 24 businesses that were looking for major funding three received funding,” Whetstone said.

“Three out of 24 – that’s bottom of the class for me.

“Why are these businesses failing to achieve that funding?

“Why can’t we actually say ‘right, here’s my business model, here’s where I need the support’ and the government should be saying how can we support you?

“I know that the minister is finding it hard to get money from the treasurer but there is money there that is not being awarded to the businesses.”

A spokesman for Hamilton-Smith told InDaily 147 businesses had applied to the program over the three rounds with $1.2m offered to successful applicants.

“The Minister has rejected the anonymous claims used by Mr Whetstone,” he said.

“The facts say otherwise; businesses are on the record praising it and every cent available has been allocated with more to come.

“The scale of the response demonstrates a growing appetite in the small to medium enterprises sector to grasp the opportunities made available to companies through our engagement strategies for China, India and South East Asia.”

According to the latest figures from Department of Premier and Cabinet, SA exported $11.7 billion of goods in the 12 months to December last year, down 1.8 per cent, or $220 million on the previous 12 months.

Most of the decline was attributed to falls in locally produced copper, iron ore, petroleum and grains.

South Australia’s food and wine sector was one of the strongest export performers.

Wine exports grew 19 per cent, up $212 million, meat was up 15 per cent, or $181 million, and fruit and vegetables increased a huge 39 per cent, or $170 million.

The biggest fall was in petroleum and products which plummeted 55 per cent ($108 million), ores and metal scraps were down 43 per cent ($988 million), copper fell 23 per cent ($318 million) while gold, silver and platinum fell 32 per cent ($38 million).

SA’s export markets fell in China (down 24 per cent – $721 million), Malaysia (16 per cent – $128 million), Japan (19 per cent – $109 million), Hong Kong (18 per cent – $52 million) and New Zealand (7.2 per cent – $33 million).

Export markets grew in Canada (up 67 per cent- $142 million), United States (26 per cent by $357 million), EU (14 per cent – $134 million), India (7.6 per cent – $54 million) and Middle East (4.4 per cent – $34 million).

Nationally, exports for the 12 months fell 5.8 per cent ($15.3 billion).

SA was one of three Australian states – all mineral driven – to experience a decline in exports.

Northern Territory was down 19 per cent and Western Australia fell 17 per cent.

Bucking the falling exports trend were Queensland with a 13 per cent increase, SA’s usual economic stablemate Tasmania was up 4.7 per cent, New South Wales increased 3.7 per cent and Victoria was slightly up with 0.1 per cent.

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