Earlier this year, Public Accountant explored research on government grants, subsidies, rebates and tax concessions. That research showed that the bulk of the assistance ends up with the big end of town.
Many potential applicants have not taken advantage of the assistance that may be available to them because of the lack of knowledge about the various assistance programs. In some cases, the advice to the applicant has been that they are not eligible (they have been eligible) or that the program is too difficult to apply for (rules and guidelines do change regularly).
Accountants should be aware of two different types of assistance programs. The first is a reimbursive or entitlement program; the second is a competitive program.
Reimbursive programs
With a reimbursive program, the applicant spends the money first and, if they meet the requirements of the program, they are entitled to be reimbursed for a portion of the eligible expenses. The two federal programs that fall into this category are the Export Market Development Grant (known as EMDG or Export Grant) and the R&D Tax Incentive program.
Both of these programs have complex guidelines and, to maximise their benefits, you need an up-to-date understanding of the respective Acts and regulations. But simple rules of thumb can guide you and your clients towards understanding eligibility for these programs.
For the Export Grant, if your clients have export sales products in their BAS returns, they may be eligible. And note that while the product needs to be Australian, it does not automatically exclude products that are made offshore (for example, in China).
lf clients have spent money on patents, there is a good chance they are developing something that is generating new knowledge and, as such, may be eligible for the R&D Tax Incentive. Here, the applicant has to be a company; individuals and trusts are excluded from this scheme.
Competitive programs
Far more common are competitive government assistance programs, where governments choose which of many applications will be funded from the amount of money made available for that program.
The volume of information required for these programs varies and there is no guarantee that your application will be successful.
The largest competitive grant program available to the average accounting practice client was the Commercialisation Australia program. It provided matching funding up to $2 million on a 50:50 basis – until it was unfortunately cancelled in the 2014 Budget.
A new program, the Entrepreneur Infrastructure Program, started rolling out on 1 July 2014, with a maximum grant of $250,000 on a 50:50 matching funding basis.
How can accountancy practices assist potential applicants?
Just being aware of programs that may be of interest and benefit to clients is a good start.
If the practice does not have trained staff, there are consultants around who can assist the accounting practice and/or the applicant.
A helping hand
In the June/July 2014 issue of Public Accountant, Scott Holmes, Mark Sargent and Michael Schaper set out their research on government assistance to industry. About 14 percent of firms report receiving some form of financial help. Read more at: pubacct.org.au/who-gets-the-money/
