AustradeFunding

A disaster for Australian Exporters has just occurred............Austrade has run out of money to pay the full second
payment entitlements to exporters for their 2006/07 grants.

As just announced the payout will be 24.42% of the expected grant. Claimants expecting to receive $80,000
(maximum claimant) will receive just $19,533.

Earlier advised indications of 12% final payout were incorrect.....fortunatley. However, it is of major concern that the
continuing success of the EMDG program, in particular, resulting from signigicant positive changes made, effective
from the commencement of the 2006-07 year, have not been matched with increased funding from the Federal
Government.

It was expected that the changes made; removal of the turnover test and increasing the Overseas Visit Allowance
(OVA) would have a major impact on 1) the claimed value of claims, and 2) the number of claims lodged. However,
these significant changes did not trigger an automatic allocation of additional funding to finance the expected
increase.

In recent years there has been a small surplus of EMDG funds, which have been returned to Treasury. It was hoped
that the Federal Government would return these funds to supplement the expected shortfall and or to allocate new
funds. Neither took place.

Given that the same changes to the EMDG program apply to the 2007-08 grant year and that the total funds available
to the program is just $150 million (including administrative costs), down from $158 million ifor the 2006-07 year, a
serious shortfall is again expected, unless additional funding is allocated by the Federal Government.

Advice has been received that it is highly likely that the $70,000 inital grant payment will be reduced - perhaps down
to $40,000 to $50,000, thereby spreading the 'bad news' expected when the second payment is made in June '09,
over a greater proportion of claimants. An update will be posted once a decision has been made.