Exporters must get help

The Australian dollar has taken something of a pause in overnight and morning trade, bumping along at US98.5 cents.

We haven’t hit parity yet, but even Treasurer Wayne Swan thinks it’s inevitable; overnight he told CNBC that the dollar was likely to remain strong for a long while yet.

Swan has even taking to wearing the strong dollar as a bit of badge of honour, quite rightly pointing out that this is one of the consequences of a booming mining sector.

While we’ve talked a lot about the possible ways entrepreneurs can take advantage of the high dollar (here and here) it is also clear that exporters outside of the resources are hurting – and they need help.

The Government’s decision – taken at the height of the GFC – to reduce the pool of money available under the Export Market Development Grant from $200 million to $150 million was dumb.

While the Government could not have seen what was going to happen to the Australian dollar, it was pretty obvious that regardless of the currency movements, exporters were going to need strong support to sell into markets that had been badly shaken by the financial crisis.

Saving $50 million on this program, which has been widely praised by both sides of politics and every SME that has been involved, was just extremely short-sighted.

The Government needs to immediately increase the funding back to $200 million – and possibly beyond, while the dollar remains so high – and ensure the payments filter through to SMEs as quickly as possible.

The Government must then agree to keep the funding set at least $200 million into the future.

There is a deeper issue here. While we are currently riding a mining export boom, it seems that outside resources, the performance of our exporters is slipping. Anecdotally at least, our analysis of the Smart50 suggests exporting just isn’t on the agenda of many of our fast-growth SMEs.

That’s a huge problem that the Government must work to address.