Victor Footwear Pty Ltd and Secretary, Department of Industry, Tourism and Resources
[2005] AATA 64
•21 January 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 64
ADMINISTRATIVE APPEALS TRIBUNAL Nº V2004/350
GENERAL ADMINISTRATIVE DIVISION
Re: VICTOR FOOTWEAR PTY LTD
Applicant
And:SECRETARY, DEPARTMENT OF INDUSTRY, TOURISM AND RESOURCES
Respondent
DECISION
Tribunal: Dr Gordon Hughes, Member
Date:21 January 2005
Place:Melbourne
Decision:The Tribunal affirms the decision under review.
(sgd) Gordon Hughes
Member
INDUSTRY, TOURISM AND RESOURCES – AusIndustry ‑ textile clothing and footwear strategic investment program – Type 3 grants – relevance of Type 1 "grants made"
Textile, Clothing and Footwear Strategic Investment Program Act 1999 ss66(b)(i), 77(2)
Textile, Clothing and Footwear Strategic Investment Program Scheme 1999
Secretary, Department of Social Security v Lowe (1999) 56 ALD 609
Repatriation Commission v Keeley (2000) 60 ALD 401
Kimberley-Clark Australia Pty Ltd v Secretary to the Department of Industry, Tourism and Resources [2004] FCA 1438
REASONS FOR DECISION
21 January 2005 Dr Gordon Hughes, Member
1. This is an application by Victor Footwear Pty Ltd (the applicant) for review of a decision made on 17 February 2004 by AusIndustry, a division of the Secretary, Department of Industry, Tourism and Resources (the respondent) in relation to the applicant’s entitlement to a grant, payable under the Textile, Clothing and Footwear Strategic Investment Program Scheme 1999 (the Scheme). Specifically, the applicant contests the manner in which the respondent has interpreted s 66 of the Scheme as it applies to caps placed on "Type 3 grants".
2. The matter was heard on 6 December 2004. Mr Louis Gross, solicitor, appeared for the applicant and Ms Elizabeth Collins of counsel appeared for the respondent. The Tribunal had before it the documents filed pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 and two exhibits filed on behalf of the applicant (A1 and A2).
Background
3. None of the background is contentious but nevertheless, in order to adequately address the relatively narrow issue in dispute, it is necessary to recite the background in some detail.
4. The applicant is a manufacturer of quality work wear and elastic‑sided boots. The company employs 30 people. The investment which gave rise to the dispute involved the purchase of a rotary table injection moulder for $1,306,169.
5. The Scheme was established by the Minister for Industry, Tourism and Resources in 1999 pursuant to the Textile, Clothing and Footwear Strategic Investment Program Act 1999 (the Act). The Scheme in force at the time of the original decision was the compilation prepared on 11 December 2002.
6. The Scheme is designed to provide incentives in the form of grants to promote investment, innovation and value adding in the Australian textile, clothing and footwear industry. The Scheme applies to "eligible Textile, Clothing and Footwear (TCF) activity". It was not in dispute that the applicant was conducting an "eligible TCF activity”, manufacturing "eligible TCF products".
7. The Scheme is to operate for 5 "program years" from 2001 to 2005. "Program years" are defined in s 6(2) of the Scheme as follows:
…
(a)the period commencing on 1 July 2000 and ending at the end of 30 June 2001 (the 2000/2001 program year);
(b)the period commencing on 1 July 2001 and ending at the end of 30 June 2002 (the 2001/2002 program year);
(c)the period commencing on 1 July 2002 and ending at the end of 30 June 2003 (the 2002/2003 program year);
(d)the period commencing on 1 July 2003 and ending at the end of 30 June 2004 (the 2003/2004 program year);
(e)the period commencing on 1 July 2004 and ending at the end of 30 June 2005 (the 2004/2005 program year).
8. In certain circumstances, companies making claims for the "first program year" were also able to claim expenditure incurred in two "pre‑program years", subject to pro‑rating their total expenditure over a three year period. Section 6(1) of the Scheme defines a "pre-program year" as follows:
…
(a)the period commencing on 1 July 1998 and ending at the end of 30 June 1999 (the 1998/1999 pre-program year);
(b)the period commencing on 1 July 1999 and ending at the end of 30 June 2000 (the 1999/2000 pre-program year).
9. Section 11(2) of the Act specifies that there are to be 5 types of grants made available under the Scheme:
(a)a Type 1 grant, in respect of new TCF plant/building expenditure;
(b)a Type 2 grant, in respect of TCF research and development expenditure;
(c)a Type 3 grant, in respect of TCF value‑adding;
(d)a Type 4 grant, in respect of second‑hand TCF plant expenditure; and
(e)a Type 5 grant, in respect of TCF‑dependent communities.
10. The grants relevant to this application are Type 1 grants and Type 3 grants. As will be seen, the quantification of a Type 3 grant (which is the immediate subject of dispute) may in part be dependent upon the quantification of other Types of grants, in this case a Type 1 grant.
11. These “type” classifications are reiterated in s 13 of the Scheme. The Scheme, which the Act provides is a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act 1901, then defines each type of grant in more detail. Section 14 of the Scheme defines a Type 1 grant, with ss 14(3) stating that a Type 1 grant is payable in relation to eligible expenditure in a pre-program year as well as in a program year. Section 27(1) of the Scheme simply defines a Type 3 grant as a grant relating to eligible TCF value added by the entity in respect of eligible TCF activities carried on by the entity in a program year.
12. An entity which intends to make a claim for a Type 1, Type 2 or Type 3 grant must apply for registration for the scheme (s 31(1) of the Scheme). Under s 31(3) of the Scheme, an application for registration must be in respect of:
(a) 1 or both of the pre-program years and the 2000/2001 program years; or
(b) a program year.
In the present case, the applicant was registered in accordance with s 31(3)(a) of the Scheme for the pre‑program year 1999/2000 and the program year 2000/2001, and pursuant to s 31(3)(b) in respect of the 2001/2002 program year.
13. Entities intending to make a claim for a Type 1 grant in one or both of the pre‑program years, as well as at least one program year, must elect which of the three options set out in Schedule 3 to the Scheme is to apply to the entity for the apportionment of eligible expenditure incurred by the entity (s 36(1) of the Scheme). The applicant elected that Option 1 of Schedule 3 of the Scheme was to apply. If an entity elects that Option 1 is to apply, the entity may also elect that the method of determination and payment of the entity's entitlement to Type 1 grants set out in s 77 of the Scheme is to apply to the entity (s 36(1A) of the Scheme). Victor elected that this method of determination was to apply.
14. The Scheme imposes caps upon the amounts of Type 1, Type 2 and Type 3 grants made to an entity in respect of eligible expenditure incurred by the entity during a particular pre‑program year or program year, or TCF value‑added by the entity during a program year (ss 64, 65 and 66 of the Scheme).
15. Section 66 of the Scheme, which is effectively at the centre of this dispute, contains a cap for Type 3 grants, and provides:
66. The total of Type 3 grants made to an entity in respect of TCF value added by the entity during a program year must not exceed the lesser of:
(a)5% of the total eligible TCF value added by the entity in respect of eligible TCF activities carried on by the entity during the program year; and
(b)the sum of:
(i)the total of Type 1 grants made to the entity under this Division for the program year; and
(ii)the total of Type 2 grants made to the entity under this Division for the program year; and
(iii)the total of Type 4 grants made to the entity under this Division for the program year.
This application turns very much upon the interpretation of s 66(b)(i) of the Scheme.
16. Given that Type 3 grants relate to "TCF value‑adding", and given further that s 66 of the Scheme imposes a cap on Type 3 grants, it is necessary to read s 66 of the Scheme subject to s 14 of the Act which sets out the policy objectives for the Scheme in respect of TCF value‑adding. Section 14 of the Act states:
(1) This section sets out a policy objective for the TCF (SIP) scheme.
(2) The objective is that the total grants in respect of TCF value-adding that are made to an entity in respect of activities that, under the scheme, are taken to be eligible activities carried on by the entity during a particular income year of the entity must not exceed whichever is the lesser of:
(a)5% of the amount that, under the scheme, is taken to be the total eligible TCF value added by the entity during that income year; and
(b)the sum of:
(i)the total grants in respect of new TCF plant/building expenditure made to the entity in respect of amounts that, under the scheme, are taken to be eligible expenditure incurred by the entity during that income year; and
(ii)the total grants in respect of TCF research and development expenditure made to the entity in respect of amounts that, under the scheme, are taken to be eligible expenditure incurred by the entity during that income year; and
(iii)the total special grants in respect of second-hand TCF plant expenditure made to the entity in respect of amounts that, under the scheme, are taken to be eligible expenditure incurred by the entity during the income year.
Section 14(2)(b)(i) describes Type 1 grants and therefore contextualises s 66(b)(i) of the Scheme.
17. There is a distinction between "eligibility" for a grant and "entitlement" to a grant. Section 68 of the Scheme provides that if a claimant entity is eligible for a grant under Subdivision 5.2.1 (ss 61‑68 of the Scheme), that eligibility does not, of itself, give rise to an entitlement to the grant.
18. A claimant entity may, at the time of making a claim for a grant for a given program year, request a determination of the claim. A “determination” is an adjudication that the entity is entitled to be paid the grant that is the subject of the claim (ss 74A and 75 of the Scheme).
19. Section 77 of the Scheme applies to a claim for a Type 1 grant and request for determination in respect of the claim when the entity has elected that the method of establishing its entitlement to a Type 1 grant as set out in s 77 is to apply. If the entity is eligible for a Type 1 grant of an amount ("the eligible grant amount") in respect of a pre‑program year and the 2000/2001 program year or a subsequent program year, that entity is entitled to a determination for a Type 1 grant in accordance with the formula set out in s 77 of the Scheme.
20. The formula for determining Type 1 grants is set out in a table in s 77(2) of the Scheme, the relevant parts of which (for the purposes of this application) are as follows:
Pre-program year or program year to which the claim relates
Amount of grant
1998/1999 pre‑program year
1999/2000 pre‑program year
2000/2001 program year
The sum of:
· the eligible grant amount (if any) for the 1998/1999 pre‑program year; and
· one half of the eligible grant amount (if any) for the 1999/2000 pre‑program year; and
· one third of the eligible grant amount for the 2000/2001 program year.
2001/2002 program year
The sum of:
· one half of the eligible grant amount (if any) for the 1999/2000 pre-program year; and
· one third of the eligible grant amount for the 2000/2001 program year; and
· one third of the eligible grant amount for the 2001/2002 program year…
21. The cap on Type 3 grants takes into account, the total of Type 1 grants made to the entity … for the program year (s 66(b)(i) of the Act), therefore the above table dealing with the determination of Type 1 grants assumes pivotal significance, specifically in relation to the 2001/2002 program year.
Applicant's 2000/2001 Assessment
22. On 29 November 2001, the applicant lodged a claim and a request for determination of grant entitlement in respect of the 1998/1999 and 1999/2000 pre‑program years and the 2000/2001 program year. The claim and request for determination of grant entitlement related to a Type 1, Type 2 and Type 3 grant.
23. On 19 February 2002 the applicant was advised that its claim for a Type 1, Type 2 and Type 3 grant was accepted by the respondent, subject to the disallowance of a small amount which was subsequently reversed.
24. The applicant's claim for a Type 1 grant was assessed in accordance with Option 1 of Schedule 3, and was also adjusted for the purposes of its election to have its Type 1 grant determined under s 77 of the Scheme. The applicant's entitlement to a Type 1 grant was capped at 20 per cent of its eligible expenditure for the year, in accordance with s 64 of the Scheme. The applicant's claim for a Type 2 grant was capped at 45 per cent of its eligible expenditure, in accordance with s 65 of the Scheme.
25. The applicant's claim for a Type 3 grant was also capped, at the lesser of 5 per cent of its total eligible TCF value‑added or the sum of its Type 1, Type 2 and Type 4 grand totals, in accordance with s 66 of the Scheme.
26. The applicant's total grant eligibility for alternative determination in 2001/2002 was $255,165.62. The s 85A cap on the total grants payable to the entity was applied by the respondent, such that the grant payable was $248,575, that is, 5 per cent of the applicant's Total Eligible Revenue of $4,971,509.
27. No issue arises in these proceedings as to the adequacy of this assessment.
Applicant's 2001/2002 Assessment
28. On 28 February 2003 the applicant lodged a claim and a request for determination of grant entitlement in respect of the 2001/2002 program year. The applicant's claim related to a Type 1 grant and a Type 3 grant.
29. On 14 March 2003, the applicant was advised of the outcome of the assessment and determination for the 2001/2002 program year.
30. The applicant's claim for a Type 1 grant in respect of the 2001/2002 year was assessed in accordance with Option 1 of Schedule 3. An adjusted Type 1 grant amount was identified for the purposes of subsequently calculating the grant entitlement, in accordance with the applicant’s election to have its Type 1 grant determined under s 77 of the Scheme. This amount represented one half of its eligible grant amount for the 1999/2000 pre‑program, one third of its eligible grant amount for the 2000/2001 program year, and one third of its eligible grant amount for the 2001/2002 program year, as required by s 77 (and set out in the table above).
31. The assessment was as follows:
(a)50% of its eligible grant amount for the 1999/2000 pre‑program year of $23,384, namely, $11,692;
(b)one third of its eligible grant amount for the 2000/2001 program year of $286,504.80, namely, $95,501.60;
(c)one third of its eligible grant amount for the 2001/2002 program year of $22,050.40, namely, $7,350.13
giving a total adjusted Type 1 grant for determination in the same claim year of $114,543.93.
32. The applicant's Type 3 grant was assessed in accordance with the formula set out in Schedule 2 of the Scheme. The total eligible TCF value‑added by the applicant in respect of eligible TCF activities it carried on in the 2001/2002 program year was assessed at $2,694,076. No issue arises in these proceedings as to the adequacy of this calculation.
33. The cap for Type 3 grants set out in s 66 of the Scheme was then applied. In applying the s 66 cap to the Type 3 grant, the respondent determined that:
(a)for the purposes of s 66(a), 5% of the total eligible TCF value‑added by the entity in respect of eligible TCF activities it carried on during the 2001/2002 program year was $134,703.80; and
(b)for the purposes of s 66(b), the sum of the total of Type 1 grants, Type 2 grants and Type 4 grants made to the entity for the 2001/2002 program year was $22,050.40, which for the 2001/2002 program year, happened to be the total of the grant.
34. The respondent made a Determination that the applicant's grant entitlement was $143,382, calculated as follows:
Total Type 1 Grant Adjusted
$114,543.93
Sum of 1, 2 and 4 modulated Grant totals
(Type 3 Grant)
$22,050.40
Sales cap carry over from previous assessment
$6,783.83
$143,381.16
35. The respondent paid the sum of $143,382.00 to the applicant.
The Dispute
36. In simple terms, the dispute may be summarised as follows:
(a)in respect of the 2001/2002 program year, the applicant claimed a Type 1 grant and a Type 3 grant;
(b)the Type 1 grant was calculated in accordance with s 77(2) of the Scheme;
(c)the amount of a Type 3 grant depends upon the amount of the Type 1 grant because, under s 66, the Type 3 grant is capped at (inter alia) the sum of all Type 1, Type 2 and Type 4 grants for the program year;
(d)in the 2001/2002 program year, the applicant did not receive a Type 2 or Type 4 grant and the applicant therefore asserts that the cap on the Type 3 grant should be the sum of $114,543.93, being the amount of the Type 1 grant for 2001/2002;
(e)the respondent, however, contends that as the Type 1 grant for 2001/2002 year is made up of a rolling sum embracing the 1999/2000 pre‑program year, the 2000/2001 program year and the 2001/2002 program year, only the eligible grant amount for 2001/2002 should be taken into account for the purposes of applying the Type 3 formula;
(f)in relation to the 2001/2002 program year, the eligible grant amount was $22,050.40, one third of which ($7,350.13) was applied towards the Type 1 quantification;
(g)the respondent therefore calculates that, in accordance with s 66(b)(i) of the Scheme, the cap on the applicant's Type 3 entitlement was $22,050.40; and
(h)specifically, the respondent did not take into account that part of the Type 1 grant paid to the applicant which related to the 1999/2000 pre‑program year ($11,692) and the 2000/2001 program year ($95,501.60) on the basis that these had been carried over from the applicant's previous assessment and related to eligible grant amounts from previous years.
37. To further refine the issue in dispute, it is necessary for the Tribunal to decide whether the reference in s 66(b)(i) of the Scheme to the total of Type 1 grants made to the entity for the program year 2001/2002 refers (as the respondent would contend) to the total determination of the Type 1 grant for that year in accordance with s 77(2) of the Scheme, embracing the sum of pro‑rated eligible grant amounts over a three year period, or (as the applicant would contend) only the eligible grant amount for the 2001/2002 program year.
Applicant's SubmissionS
38. On behalf of the applicant, Mr Gross submitted that:
(a)section 27(1) of the Scheme defines a Type 3 grant as being a grant relating to eligible TCF value added by the entity in respect of eligible TCF activities carried on by the entity in a program year, noting that the reference to "eligible" TCF value added begs the question as to how that amount is determined;
(b)section 66(b) of the Scheme sets out the cap for Type 3 grants, and in this instance the relevant cap was an amount equivalent to the total of Type 1 grants made to the entity for the program year;
(c)section 77 of the Scheme utilises a rolling average methodology, thereby determining the amount of the Type 1 grant for 2001/2002 (in this instance) over a three year period and creating an eligibility and entitlement to the applicant for each of those years; and
(d)while the respondent claims that payments relative to earlier years under this approach should be ignored for the purposes of calculating the Type 3 payment in 2001/2002 by virtue of the fact that those payments relate to expenditure in a previous year, this approach fails to take into account the fact that s 77 of the Scheme has spread that type of expenditure over three separate years.
39. The applicant contends that the respondent's approach is inconsistent with the intention of the legislation. Mr Gross emphasised that the amendments for the Scheme were intended to assist companies with large capital expenditure by enabling them to spread that expenditure for the purposes of the Scheme over a three year period.
40. Mr Gross pointed to the fact that s 77 of the Scheme is expressly constrained to the question of determining Type 1 grants and gives no indication of an intention to restrict Type 3 grants in the manner claimed by the respondent.
41. On behalf of the applicant, Mr Gross further asserted that the intention of s 77 of the Scheme was to spread eligible expenditure from one year to a three year period in order to maximise the benefit available under the Scheme from lumpy investments. By applying this formula, a Type 1 grant was made for 2001/2002 commensurate with expenditure over that period, thus resulting in the payment of $114,543.93. It followed that a commensurate Type 3 payment should also be made, subject to not exceed the 5 per cent of value‑added cap. The effect of s 77 was to move eligible expenditure in one program year to another program year, in this case, from 2000/2001 to 2001/2002.
42. Mr Gross further submitted, in support of the applicant's contentions, that the Act and the Scheme amounted to "beneficial legislation" (Secretary, Department of Social Security v Lowe (1999) 56 ALD 609 and Repatriation Commission v Keeley (2000) 60 ALD 401). As a consequence, a generous construction of the language of legislation, giving effect to its objectives ahead of a literal interpretation, was required.
Respondent's SubmissionS
43. In support of the decision under review, Ms Collins advanced the following propositions on behalf of the respondent:
(a)section 11 of the Scheme defines the meaning of any reference to a "grant for a program year" in the following terms:
11. In the Scheme, a reference to a grant to an entity for a pre-program year or a program year is a reference to a grant to the entity relating to eligible expenditure incurred, or eligible TCF value added, by the entity in the pre-program year or program year.
In the respondent's contention, this meant that for the purposes of a Type 1 grant, the relevant capital expenditure was the expenditure incurred by the entity in the actual program year;
(b)in relation to the definition of a Type 3 grant, the respondent pointed to s 27 of the Scheme which states, inter alia:
27.(1) A Type 3 grant, for an entity, is a grant relating to eligible TCF value added by the entity in respect of eligible TCF activities carried on by the entity in a program year.
(2) A Type 3 grant may be made to an entity for a program year only if a Type 1 or Type 2 grant is also made to the entity for the program year…
(c)in relation to subclause (i) of section 27(1) of the Scheme, the respondent pointed out that the definition of "Type 1 grant" in s 14(3) of the Scheme provided that a Type 1 grant was payable in relation to eligible expenditure in a pre‑program year as well as in a program year. It was significant that there was no reference to a pre‑program year in the definition of a Type 3 grant, thus evincing an intent that the Type 3 grant related to eligible expenditure in the same year to which the application related, and not to previous years. In relation to subclause (ii), the respondent noted that the Type 3 grant was only available if a Type 1 grant had been made for the same program year; it was not a standalone provision;
(d)in relation to the election of determination options for Type 1 grants, the respondent emphasised that s 36(1) and s 36(1A) of the Scheme are specifically confined to Type 1 grants and make no reference to an ability to make a similar election in respect of Type 3 grants. The regime is, according to the respondent, specific to the Type 1 regime;
(e)in relation to s 66(b)(i) of the Scheme, the respondent emphasised the reference to the total of Type 1 grants made to the entity… for the program year. By reference to s 11, this meant eligible expenditure incurred…in the…program year. It was necessary to confine the calculation to grants payable in the particular year, not grants payable in respect of other years. It was not a question of what amount had been paid in the program year, but rather a question of eligible expenditure incurred in the program year; and
(f)in relation to the applicant's submission that the Scheme amounts to "beneficial legislation", Ms Collins drew the Tribunal's attention to the recent judgment of Conti J in Kimberley-Clark Australia Pty Ltd v Secretary to the Department of Industry, Tourism and Resources [2004] FCA 1438 in which his Honour concluded, in relation to the Scheme at paragraph 101:
…I do not think that the Scheme relevantly involves beneficial legislation … and accordingly I think that the normal principles governing interpretation of subordinate legislation should be regarded as here applicable.
I do not consider it is necessary to consider this issue further.
Ruling
44. At the centre of this dispute is s 66 of the Scheme.
45. For the purposes of this application, the relevant part of s 66 is ss (b)(i) which caps a Type 3 grant at a sum equivalent to the total of Type 1 grants made to the entity… for the program year [emphasis added].
46. In determining the meaning and scope of s 66(b)(i) of the Scheme, it is relevant to consider the objectives set out in s 14 of the Act. Section 14(2)(b)(i) effectively expands upon the meaning of s 66 (b)(i) of the Scheme in the following terms:
the total grants in respect of new TCF plant/building expenditure made to the entity in respect of amounts that, under the scheme, are taken to be eligible expenditure incurred by the entity during that income year [emphasis added].
47. Section 11 of the Scheme provides guidance as to meaning of "eligible expenditure incurred" during a program (or "income") year. It provides:
In the Scheme, reference to a grant…for a…program year is a reference to a grant … relating to eligible expenditure incurred…in the program year [emphasis added].
Accordingly both s 14 of the Act and s 11 of the Scheme support the conclusion that when s 66(b)(i) of the Scheme refers to "grants made" to an entity for a program year, it is referring to "eligible expenditure incurred" in that program year. It follows that in interpreting s 66(b)(i) of the Scheme, it is necessary to have regard to eligible Type 1 expenditure incurred, in this instance, in the 2001/2002 program year. Section 77(2) of the Scheme, deals with the "Determination" of Type 1 grant amounts. The "amount of grant" for the 2001/2002 is the sum of pro‑rated "eligible grant amounts" over a 3 year period.
48. At first glance, the various provisions of relevance are somewhat circuitous: Section 66(b)(i) of the Scheme refers to "Type 1 grants made"; s 14 of the Act and s 11 of the Scheme state that "reference to a grant" is a reference to "eligible expenditure incurred"; yet s 77(2) of the Scheme states that the "amount of grant" is calculated by determining "eligible grant amounts".
49. The difficulty arises from the use of the expression "grants made" in s 66(b) of the Scheme. Plain English interpretation, supported (superficially at least) by the column headed "Amount of Grant" in s 77(2) of the Act, might lead one to the conclusion that it is a reference to an applicant's entitlement in respect of the program year as determined pursuant to s 77(2). It is understandable that the applicant in this instance interpreted s 66(b) in this manner. The section is not well drafted in the context of the Scheme as a whole.
50. Unfortunately for the applicant, a superficial plain English interpretation does not withstand closer scrutiny. The table in s 77(2) of the Scheme clearly stipulates that the entitlement in respect of the 2001/2202 program year is the pro‑rated sum of "eligible grant amounts" from three separate years. One component relates to the 2001/2002 program year. The Scheme fully distinguishes, for the purposes of Type 1 grants in the 2001/2002 year, between the "eligible grant amount" for that program year and the "eligible grant amount" for the two previous years.
51. I have no doubt that when s 66(b)(i) refers to "to total of Type 1 grants made to the entity for the program year", this is the equivalent of a reference in the table in s 77(2) of the Scheme to "the eligible grant amount" for the same program year.
52. I am conscious of the applicant's assertion that this conclusion is inconsistent with the intention of the legislation which was to spread expenditure over a three year period. I do not consider this to be case, however. The intention of the legislation was clearly to spread Type 1 expenditure over a three year period. There is no evidence that the same philosophy was applied to Type 3 expenditure. Specifically, the applicant is not assisted by the definition of "Type 3 grant" in s 27 of the Scheme for the reasons addressed by Ms Collins.
53. "Eligibility" and "entitlement" are distinct concepts. "Eligibility" is not deemed to give rise to "entitlement" (s 68 of the Scheme). Conversely, it is incorrect to automatically equate "entitlement" with the "eligibility".
54. The Act and the Scheme make it clear that reference to a "grant" is a reference to "eligible expenditure" incurred in a particular program year. The table in s 77(2) makes it clear that eligible expenditure in 2001/2002 is but one distinct component of the applicant's entitlement to a Type 1 grant in respect of the 2001/2002 program year. The concepts are distinct, and s 66(b)(i) and can only be interpreted in this light.
55. For the above reasons, the Tribunal affirms the decision under review.
I certify that the fifty‑five [55] preceding paragraphs are a true copy of the reasons for the decision herein of
Dr G. Hughes, Member
(sgd) Olympia Sarrinikolaou
Clerk
Date of Hearing: 6 December 2004
Date of Decision: 21 January 2005
Counsel for applicant: Mr L. GrossSolicitor for applicant: Louis Gross and Associates
Counsel for respondent: Ms E. Collins
Solicitor for respondent: AusIndustry Legal Services
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