What does Australian content mean?
The level of Australian content associated with an export contract or project is an important factor in determining the amount of financial support that we can provide.
Here are some of the guidelines we apply to assess the level of Australian content in an export contract.
- What is an export contract?
An export contract involves:
• Exporting goods produced or manufactured wholly or partly in Australia or
• Providing a service (from within or outside Australia) to a person outside Australia.
- Which Efic facilities do the Australian content guidelines apply to?
The guidelines apply to an export contract that we support with buyer finance, through a loan or an export finance guarantee.
- Origin of content in an export contract
An export contract may include content from up to three sources:
• Australian content
• Foreign content, which originates outside both Australia and the buyer’s country, and
• Local content, sourced in the buyer’s country.
We refer to the total content imported into the buyer’s country (the Australian content plus the foreign content), as the eligible contract value, or ECV.
- What is Australian content?
Australian content of an export contract includes:
• Labour, goods and materials which originate in Australia
• Services (such as design, advice and technical services) provided by Australian residents
• The exporter’s profits, overheads and financing costs
• Insurance, shipping and air freight costs from Australia.
- How do we determine our level of support?
The maximum support we can provide for an export contract is:
• 85% of the ECV (that is, Australian content plus foreign content) plus
• Finance for local content: the lower of the amount of local content and 30% of the ECV.
We may provide maximum support for an export contract if we consider the contract to have substantial Australian content, which is determined as follows:
• If the Australian content of an export contract is 50% or more of ECV, the export contract is automatically considered to have substantial Australian content and the exporter is eligible for our maximum support for the contract
• If the Australian content is more than 25% but less than 50% of ECV:
o Where we consider that the Australian content is substantial compared to the content from each foreign country, the exporter is still eligible for our maximum support for the contract.
o Where we consider that the Australian content is not substantial compared to the content from each foreign country, our support is limited to the value of the Australian content (no support is provided for local content).
• If the Australian content is less than 25% of the ECV, the export contract is considered not to have substantial Australian content. Our support is limited to the value of the Australian content (no support is provided for local content).