Why were events being postponed in 2021 instead of cancelled?

You may have noticed a considerable number of annual conferences and expos have been “postponed” to around the same period 12 months later. Doesn’t that just mean that particular year has been cancelled?

Well yes and no. It is all to do with the Federal Government’s Business Events Grant Program.

If an event is cancelled then the recipients of those grants have to give the money back, but if the event is postponed then they can roll that grant over to the following year (currently up to 30 June 2023).

So how did the Business Events Grant Program come about?

What events were allocated funding and how much money has flowed from the program to support the events industry?

If events are cancelled – what is the process to repay the grant?

What really happened with that program – and who did it end up helping?

We have done some digging. It turns out the top five recipient events shared over $19m of the $56m that was allocated to the scheme. Yes 34% of the funding went to just five expos, and only one of them actually went ahead in 2021.  

You may want to grab a cuppa – because this article is longer than usual.

This investigation was compiled by Trevor Connell and Gary Fitz-Roy

Let’s start with a recap 

In July 2020 PM Scott Morrison met with Business Events industry representatives at the DisplayWise warehouse in Morrison’s electorate. This ad-hoc meeting was arranged by Dylan Retif (CEO of DisplayWise) who has an existing relationship with the PM (and he had visited the business previously). The meeting was confirmed on a Friday for the following Monday and was attended by industry and association representatives including regular contributor Gary Fitz-Roy.

This meeting was covered in the trade media at the time based on a presser put out by DisplayWise

Following the meeting Morrison went live on Facebook to commend the industry for reaching out.

“We can get business events running again, we can get exhibitions running again, they can be done safely, they can be done economically and viably, and so today was a good opportunity to consult with the industry and get a good handle on some of the obstacles they have, some of the challenges that they will have to get across,” he said.

Gary recalls that the key goal raised at the meeting was to address confidence in committing to Business Events to assist exhibitors and attendees during what was uncertain times in 2020.

The Announcement came quickly

On the 11 September 2020 Scott Morrison announced a package for the Business Events sector. A Government media release at the time stated: 

“Connecting businesses through trade shows and conferences will help unlock widespread collaboration and boost domestic capability by creating and expanding local supply chains. 

Under the Business Events Grants program, Australian businesses exhibiting at an approved business meeting, convention, conference and incentives event in 2021 will be able to apply for upfront grants to cover up to 50 per cent of their costs ($10,000 – $250,000).” 

So the industry was consulted – right?

Well maybe – but if they were we don’t know who.

You would have thought the PM’s Office (PMO) would reach out to BECA as the peak industry body.

However, BECA learnt from the Tourism Minister’s office (Birmingham) that an announcement was coming within a day or two, but they weren’t aware of any detail beyond the $50m.

In fact the detail and framework caught BECA by surprise.

The program was handed over to Austrade after the PM’s September announcement.

Although Austrade is primarily responsible for “promoting international trade, and attracting productive foreign investment to Australia” Their purpose “is to deliver quality services and programs to businesses to grow Australia’s prosperity across trade, investment, tourism and international education.”

So while international conferences and expos would fit those criteria we were now looking at mainly domestic events.

Austrade soon reached out to BECA, who then worked with them on designing the best possible guidelines. But the program framework was already set by (we assume) the PM’s office. 

The PMO’s framework was essentially a grant scheme for businesses operating in Business Events, rather than a scheme for the Business Events industry.

Let us explain.

The scheme put out by the Government was for Business Events attendees (delegates and exhibitors) to receive grants. A many-to-one (bottom-up) model which indirectly drives business events. BECA pointed out that this would require significant, complex administration to disburse the funds and confirm attendance. This model also assumes the event would take place, as the grants would be distributed to recipients in advance.

The BECA preferred model was for the funding to go via the Business Event owners, or at least for them have input on who should receive funding.

Importantly BECA pointed out that rolling out the funding via Business Event owners was essentially a one-to-many process where a single grant payment can be distributed to many tourism and events businesses. This model assumes the event owner knows who is most deserving of the grants and takes responsibility for their distribution. This also assumes that if the event does not take place then the grants would not be distributed.

The BECA submission made the following points:

• The scheme should drive demand by building confidence and to counter uncertainty
• Disperse the funds to Business Events businesses through activity generated and supported by the grant program
• Provide targeted support for Business Events that align with economic priorities of Government
• Government owned Business Events should be excluded and the funding would only be available to Australian Business Event owners including Association/NFPs and Corporations, including commercial conference and exhibition organisers.
• The eligible Business Event must have a recurring history and would not include start up events.

The government model was rolled out

In stage one of the program, event owners had to apply to have their events included on the Schedule of Approved Events. Note this had to be done by the event owner who received no direct funding themselves. What they were getting out of it was exhibitors and delegates who were more confident in exhibiting and attending, which in turn helped the event owner by having more exhibitors and attendees – which is what make conferences and exhibitions successful.

One event owner told ASE that they were knocked back because their multi-state roadshow (five days in different cities) was not considered to be a “multi-day event” as required by the guidelines.

Others have told ASE the application process was so complicated they gave up, while others were quite pleased with the result.

ASE is also aware that at least 25% of approved events (from the 353) did not attract any successful grantees, after organisers/owners put in the effort to get their event listed on the approved schedule of events.

Once the Schedule of Events was approved the scheme moved to…

Stage two – In the program’s second stage, delegates and exhibitors applied for grants to receive up to 50% of costs to participate in those approved events.

The business.gov.au website still has details for delegates, so let’s have a look at that…

There is more, but you get the gist and you can read it all on the website.

This particular objective was interesting “promote Australian businesses, including to a domestic audience” considering any potential international audience was mostly locked out they only had a domestic audience.

So now the grants program is handed over to Austrade to administer and we find the Schedule of Approved Events on their website.

What events were approved?

The government guidelines talked about funding B2B Events rather than Business Events. If an event was primarily B2C, to use that parlance, then it had to have a significant component of B2B to qualify.

A total of 356 events were approved under the scheme including conferences and expos related to Tourism, Food & Beverage, Health and Medical, Technology, Disability, Farming and Field Days, and more.  A very wide cross-section of events, predominantly trade or association.

Of those 356 events, 16 were cancelled, 29 changed to virtual and deemed cancelled, and 107 were rescheduled to 2022/2023. Which leaves 203 that were approved and were scheduled to happen in 2021, but did they?  The schedule has not been updated and ASE has a put in a request to Austrade for information regarding rescheduled events.

Grants went to trade events, many of which are dependent on international business. In hindsight consumer shows would rebound far quicker than trade shows and create instant transactions – driving both the economy and the events industry.

Back to that meeting with Morrison in June 2020

It was raised that the industry needed something to bring business forward and create some urgency and to reduce exhibitor’s risk. For example travel costs were suggested to be included, as hotels and airlines had been very inflexible with cancellation fees.

The sector (exhibitions and conferences organisers, venues, suppliers) needed some insurance or protection as all were out outlaying large funds and had no recovery.

And finally it was suggested we needed a national advertising campaign around the value of meeting face-to-face and what events deliver.

However:

Communication of how it worked and what organisers had to do in order to get their events onto the list so their clients could apply wasn’t great. Event organisers had to do all the work to get their event approved, and Austrade would then deal directly with exhibitors and attendees. Austrade distributed the grants to exhibitors it deemed suitable, organisers had no contribution in the process, and certainly no collaboration to validate claims made by exhibitors or that the exhibitor actually had remained committed to the event.  

It is fair to say the program became as much a negative as a positive as many exhibitors didn’t make the grade whilst others did, with no sound reason to explain why. For a period of time the program divided industry events, some companies realised if they re-applied (which some did up to three times) eventually they would get something, for many they didn’t have the time or energy to fight it and reapply. 

Successful companies started receiving the funds in many cases way before the event they were participating in had run, tens (or hundreds for some) of thousands of dollars deposited into accounts of small businesses who may not be trading by the time the event came around, this signalled another alarming step in the administration of the funds.

On 11^th March 2021 Minister Tehan (in a joint release with the PM, Deputy PM and The Treasurer) announced:

The $50 million Business Events Grants Program will also be extended by three months to support Australian businesses to hold multi-day business events, covering up to 50 per cent of costs incurred in participating business events during the 2021 calendar year. This will help restart Australia’s business events sector.

At this stage it was assumed that the program would not utilise the full $50m, but by 30 March, there were applications for a total of $56m

At the end of March 2021 Austrade posted the following;

The program closed on 30 March 2021 and received 1,729 eligible applications requesting over $56 million in funding. The program’s $50 million in funding is fully exhausted with more than 1,500 applicants awarded funding.  

In August 2021, the Australian Government committed to providing further support for the program. An additional $6 million has been allocated to the program for distribution to applicants who have upcoming events that were assessed as eligible but missed out on a grant as part of the original program. No new applications will be sought at this time.

Changes to the Program announced so far include:

• The minimum grant amount reduced to $5,000 (from $10,000) to allow smaller businesses the opportunity to apply
• Extending the support for events scheduled through to 31 March 2022 to allow events that were postponed early 2021 the opportunity to benefit from the program
• Increasing the number of delegates covered by the grant
• Increasing the sponsorship cap
• Expanding the priority sectors

Another key point is that at the time the program was being rolled out it wasn’t fully appreciated how much power the states had and how border closures would potentially derail events. 

Here’s something else to think about. According to BECA, in 2019 Australia staged 484,000 business events, according to Austrade’s annual report 107 events were approved or .02 % of all events. 

Fast Forward…

2021 delivered another blow for the event industry with the calendar affected by the ongoing COVID situation. After reviewing the list of approved events we estimate that a considerable number of those events did not run, yet the whole goal was to kickstart the sector in the tail end of 2020 and through 2021.  

This is also now where it starts to unravel and look very biased.

In Senate Estimates on 27^th – 28^th October 2021 Senator Don Farrell put a Question on Notice to Austrade – this is from Hansard. The answer to Q4 is interesting.

Let’s have a look at these top 5

Of 1500 approved grants these five events represent 470 or just under one third of all approved grants on just FIVE EVENTS! Of note, only one of these events actually ran in 2021 – Land Forces. 

So what is Land Forces and who benefited?

This is from their website promoting this year’s event.

LAND FORCES 2022 will be a powerful forum for key decision-makers from throughout the region, enabling government representatives, defence officials, military procurement managers and senior army officers to network with defence materiel manufacturers, equipment suppliers and service providers.

Did $4.9m in grants go to “government representatives, defence officials, military procurement managers and senior army officers” who are mostly on the government payroll already? Let’s assume the grants did not go to them.

So did the grants go to the exhibitors? The biggest of whom are huge multi-national corporations selling military hardware and technology. We have to assume they have an Australian office and an ABN in order to qualify. But did they really need an incentive to participate?

Or did it all go to SMEs which, according to the website “Australian Small Business are allocated a dedicated zone – subject to availability.” Let’s hope so. But $4.9m?

Does this remind you of the big corporations that pocketed JobKeeper while recording record profits?  Once again, all within the rules!

The next few on the list were Food Trade shows, again made up of international large businesses who enjoyed millions in support and three of them cross over in one way or another, so there is nothing to maximise the reach and overall industry support.  

This means between the top five shows – just those recipients, totalled $19,037,906 out of the $56,000,000 or 34% of the total funds distributed!

The program clearly didn’t target the entire national market. And again, the bulk of those funds remain firmly in the pockets of exhibiting companies and attendees – not with the organisers. Some will say it was up to exhibitors to apply and if they didn’t they missed out. Here’s another interesting point, Land Forces and Fine Food / Foodservice exhibitors are more likely to have professional bid/tender writers than shows that represent more of the average SME, so its stands to reason why not all exhibitors in all approved shows were successful. 

So where are we now?  

Those clients who received funding to provide confidence for events in 2021 have been able to roll that funding over to 2022/23 if the event has been postponed. They’ve also been able (although we don’t have data on how many have done this) to use the funds they received to cover expenses incurred (design, manufacture, contractors, cost of space hire, event registration etc.) not to mention a free cash flow injection – again in most of those cases the organisers received ZERO benefit.

A large amount of the money fronted to support the events industry, sits in the accounts of exhibitors, and the longer COVID carries on many of those businesses may not survive and the funds may never be used for the intended purpose nor repaid to the Government. It’s unclear whether funding allocated for events that cancel or postpone in 2022 will be rolled on even further, some exhibitors have said if a show is postponed they can keep and use the grant whilst if a show is cancelled it needs to be repaid, again the clincher is that many may have used the money to survive and now can’t afford to pay it back! 

The event organisers remain distanced from any validation to Government of what customers have paid or whether they’ve committed as intended.  In fact the event organisers may not even know which attendees or exhibitors received funding.

There are a number of questions that need to be addressed

• How much of the allocated $56 million has since been returned? After all, in the Delta outbreak in the second half of 2021 alone – 45 of 152 impacted events were cancelled or moved to virtual, rendering them ineligible for the funding.
• Will the government ask for the funding to be returned if not used?
• Could the returned funds be redistributed or used for one of the original ideas of a national advertising fund which benefits the events sector overall? 
• Has the objective of the scheme been met? Did it increase confidence in the sector? Did it address the national needs?
• Who took it upon themselves to act as spokespersons for the industry to advise the PMO?
• Why did the PMO not consult with the peak body representing the industry?
• When will Austrade update the list of cancelled and postponed events?

Event businesses of all sizes continue to struggle, staff continue to suffer with uncertainty and no support when out of work, and ultimately we are stuck facing the same concerns as addressed at that meeting with the PM in 2020.

We are still waiting on a response from Austrade.