Australian businesses will get a $60 million boost in Tuesday’s budget to spend on Facebook, Instagram and Google and other forms of international marketing, in a bid to drive digital exports and compete with businesses in the US and UK.
The advertising subsidy increase will be announced by Trade Minister Simon Birmingham on Friday, through the export market development grant program, which has been accessed by more than 3500 companies.
Sydney-based clothes firm, Showpo, which will generate up to $85 million in sales over the next year, has used $223,114 in taxpayer funding from the scheme over the past four years to run ads on Google, Facebook and Instagram.
“Essentially what it allows us to do is go into an export market with some financial risk mitigated,” said Paul Waddy, Showpo’s head of operations.
The firm, which brands its website with festival wear, has seen its sales grow 50 per cent year on year.
“Although it seems like online shopping is everywhere, it is still only 9 per cent of the traditional retail spend,” said Mr Waddy, 36, who runs the business with owner Jane Lu, 33 and general manager Alex Durkin, 30.
“There is a long way to go but average online purchases grew 20 per cent last year.”
Asked if taxpayers should be subsidising marketing for multimillion-dollar businesses, Mr Waddy said the money allowed them to grow and employ more people, who then paid more tax.
“Our headcount numbers have grown from 35 to over 100 in the past two years,” he said.
The $60 million injection to the program, which has helped other listed companies such as Freelancer and fitness wear dynamo 2XU, comes as the government promises a tougher line on social media companies in the wake of the Christchurch terror attack. Once the grants are delivered it has little control over how taxpayer money is spent.
Senator Birmingham said the scheme would support businesses to increase their marketing and promotional activities in international markets so they can connect with new customers and grow their exports.
“It will make a real difference to Australian businesses that are thinking globally about their business, whether they are exporting for the first time or considering developing new overseas markets,” he said.
It is the second time that the government has boosted funding to the program. Labor cut $100 million from the scheme in 2012-13.
Treasurer Josh Frydenberg has pledged Tuesday’s budget will deliver wage increases to workers, in a sign the government is preparing to deliver further income tax cuts beyond the $144 billion already legislated.
Markets have already begun “discounting” the prospects of many of the measures being passed, with Labor tipped by betting agencies and political polls to win the election in May.
Originally published via The Brisbane Times