EXPLANATORY STATEMENT
Subject – ACIS Administration Act 1999
ACIS Administration (Commonwealth Financial Assistance) Determination 2005.
The ACIS Administration Act 1999 (the Act) establishes the Automotive Competitiveness and Investment Scheme (ACIS) as a transitional assistance scheme to encourage competitive investment and innovation in the Australian automotive industry in order to achieve sustainable growth, both in the Australian market and internationally, in the context of trade liberalisation. ACIS rewards eligible activity by registered participants in the form of duty credits which can be used to acquit a Customs duty liability on eligible automotive imports, or can be sold.
Subsection 11(3) of the Act allows the Minister to determine, in writing, that a specified form of assistance provided by the Commonwealth is, or is not, financial assistance for the purpose of reducing an ACIS participant’s ACIS assistance benefits.
The aim of the determination is to prevent ACIS participants from receiving assistance from both ACIS and another Commonwealth program for the same activity. For the purpose of this determination, other Commonwealth programs which are deemed to be financial assistance are those which provide assistance to industry on the basis of the production of motor vehicles, investment in automotive plant and equipment, or investment in Research and Development (R&D), and which would be open to ACIS participants.
Further details are set out in the following Attachment.
1
ACIS Administration (Commonwealth Financial Assistance) Determination 2005
Section 1 Name of Determination
This section provides that the Determination be called the ACIS Administration (Commonwealth Financial Assistance) Determination 2005.
Section 2 Commencement
This section provides that the Rules will commence on 1 July 2005.
Section 3 ACIS Administration (Commonwealth Financial Assistance) Determination 2000 - revocation
Sets out that the previous determination detailing the forms of assistance provided by the Commonwealth that were, or were not, financial assistance for the purpose of reducing an ACIS participant’s ACIS assistance benefits, is revoked.
Section 4 Definitions
Defines various terms used in the Determination.
Section 5 Grants under the Commercial Ready Program
The Commercial Ready Program provides funding for research and development, commercialisation, and proof-of-concept activities. Similar activities can also be claimed as investment in research and development under ACIS. Assistance under the Commercial Ready Program is therefore deemed to be other Commonwealth assistance for ACIS purposes.
Section 6 Grants under the R & D Start Program
The R&D Start Program officially closed for applications on 30 September 2004, but the program will continue to provide assistance to projects that have been approved over the next five years. The aim of R&D Start is to assist businesses engaging in research and development, and commercialisation activities. ACIS participants are likely to be engaging in similar activities. Assistance under the R&D Start Program is therefore deemed to be other Commonwealth assistance for ACIS purposes.
Section 7 Grants under the Textile, Clothing and Footwear Strategic
Investment Program Scheme
The Textile, Clothing and Footwear Strategic Investment Program Scheme (TCF(SIP)) provides assistance for investment in research and development, as well as for production, and for investment in plant and equipment. ACIS participants are likely to be engaging in similar activities. Assistance under TCF(SIP) is therefore deemed to be other Commonwealth assistance for ACIS purposes.
Section 8 Duty exemptions under the Enhanced Project By-Law Scheme
The Enhanced Project By-Law Scheme allows the duty free import of eligible goods including machinery, equipment and their components. ACIS participants might claim the import duties that would otherwise be levied as part of their eligible investment in plant and equipment under section 13F of the ACIS Administration Regulations 2000. To prevent this, assistance under the Enhanced Project By-Law Scheme, namely the duty exemptions, is therefore deemed to be other Commonwealth assistance for ACIS purposes.
Section 9 Forms of Commonwealth assistance that are not financial assistance for section 11 of the Act
The following Commonwealth programs have aims so divergent to ACIS or have clawback or other administrative mechanisms which take into account assistance received through ACIS, and are therefore not deemed to be other Commonwealth assistance for the purposes of ACIS.
(a) the income tax concession, known as the R&D tax concession, in respect of research and development activities as set out in the following provisions:
(i) sections 73B to 73Z of the Income Tax Assessment Act 1936;
(ii) Subdivision 20-A of the Income Tax Assessment Act 1997;
(iii) Part IIIA of the Industry Research and Development Act 1986;
(b) the income tax concession, known as the Development Allowance, as set out in sections 82AA to 82AQ of the Income Tax Assessment Act 1936;
(c) financial assistance under the program known as Commercialising Emerging Technologies (or "COMET");
(d) financial assistance under the Commonwealth Government program known as the Cooperative Research Centres Program;
(e) financial assistance under the Strategic Investment Coordination Process; and
(f) financial assistance under the Structural Adjustment Fund for South Australia.