EXPLANATORY STATEMENT
ACIS STAGE 2 MOTOR VEHICLE PRODUCER RESEARCH AND DEVELOPMENT SCHEME VARIATION 2009 (No. 1)
General Outline
The ACIS Stage 2 Motor Vehicle Producer (MVP) Research and Development (R&D) Scheme is made under the authority of the ACIS Administration Act 1999, for Stage 2 of ACIS, concluding on 31 December 2010. The aim of the Scheme is to encourage the Australian automotive industry to invest in high-end R&D technologies. It is a merit-based Scheme providing up to $142.8 million in capped duty credits drawn from the Automotive Competitiveness and Investment Scheme (ACIS) to MVPs for successful projects. The Scheme requires that any unallocated duty credits remaining when the Scheme ceases be returned to the pool of capped ACIS duty credits available for MVPs for the final quarter of Stage 2 of ACIS.
Since the commencement of the Scheme there have been two merit selection rounds, with projects to the value of $91.8 million being supported. Given the conclusion date for the Scheme and the implementation of the Green Car Innovation Fund, which also supports research and development projects for the automotive industry, no further merit selection rounds will be conducted. This means that the $142.8 million in duty credits available under the Scheme has not been fully utilised by the projects selected for support.
The variation to section 8 of the Scheme returns $50 million in capped duty credits to ACIS for distribution to MVPs over the remaining five quarters of Stage 2 of ACIS.
Legislative Authority
Sections 60A and 60B of the ACIS Administration Act 1999 (the Act) provide the authority for this variation.
Financial Implications
The total value of assistance to be provided to MVPs by way of capped duty credits for Stage 2 of ACIS, whether distributed under ACIS or the ACIS Stage 2 MVP R&D Scheme, remains unchanged.
Consultation
This amendment resulted from ongoing consultations with:
- the Department of Innovation, Industry, Science and Research’s program delivery arm, AusIndustry, which has day-to-day administrative responsibility for the Scheme;
- the Australian Government Solicitor;
- the Federal Chamber of Automotive Industries (FCAI), the peak industry body representing the MVPs; and
- members of FCAI.
Notes on Sections to be Varied
Section 1 Name of Variation
This prescribes the name of the instrument as the ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme Variation 2009 (No. 1).
Section 2 Commencement
Section 2 provides for the instrument to commence on the day after it is registered in accordance with the Legislative Instruments Act 2003.
Section 3 Variation of ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme 2004
This is the formal provision that provides for the variation of the ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme 2004 as outlined in Schedule 1.
Schedule 1 Variation
- Section 8 — Amount of credits available under this Scheme
The amendment to section 8 changes the amount of credits available under the Scheme from $142.8 million to $92.8 million.
Overview
The ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme Variation 2009 (No. 1) was enacted to address the underutilisation of duty credits available under the Automotive Competitiveness and Investment Scheme (ACIS) for Stage 2, which concluded on 31 December 2010. This variation was introduced by the Parliament of Australia under the authority of the ACIS Administration Act 1999, aiming to encourage investment in high-end research and development technologies within the Australian automotive industry. The Scheme provides capped duty credits to motor vehicle producers for successful projects, and the variation aims to return $50 million in unallocated credits to the pool of capped ACIS duty credits for distribution to motor vehicle producers over the remaining five quarters of Stage 2 of ACIS. The total value of assistance to motor vehicle producers remains unchanged, ensuring continued support for the industry's research and development efforts.
Scope and Application
The ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme Variation 2009 (No. 1) applies to the automotive industry in Australia, specifically targeting motor vehicle producers. This variation is made under the authority of the ACIS Administration Act 1999, and it modifies the original Scheme to ensure that any unallocated duty credits are returned to the pool of capped ACIS duty credits. This variation is designed to redistribute $50 million in capped duty credits back to the automotive industry for the remaining five quarters of Stage 2 of ACIS. The Scheme is intended to encourage investment in high-end research and development technologies within the industry. As the Scheme is governed by federal legislation, its jurisdiction spans across the Commonwealth of Australia, with no specific exclusions or thresholds stated in the explanatory statement, other than the reallocation of duty credits. The variation to the Scheme does not introduce new exclusions or exemptions but rather adjusts the distribution of available credits.
Key Provisions
The ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme Variation 2009 (No. 1) primarily amends section 8 of the ACIS Stage 2 Motor Vehicle Producer Research and Development Scheme 2004, altering the amount of duty credits available under the Scheme. Section 8 now specifies that the amount of credits available is reduced from $142.8 million to $92.8 million. This adjustment reflects the decision to return $50 million in unallocated duty credits to the ACIS pool for distribution to motor vehicle producers (MVPs) over the remaining five quarters of Stage 2 of ACIS.
The variation imposes obligations on both the Department of Innovation, Industry, Science and Research, specifically AusIndustry, and the Federal Chamber of Automotive Industries (FCAI). AusIndustry must administer the amended Scheme and ensure the reallocation of the duty credits as outlined, while FCAI and its members must comply with the new credit distribution schedule. This also involves ensuring that any remaining credits are accounted for and allocated appropriately before the Scheme's conclusion on 31 December 2010.
Any breach of the provisions of this variation could lead to legal consequences. While the explanatory statement does not detail specific offences or penalties, the ACIS Administration Act 1999 and other relevant legislative instruments may outline penalties for non-compliance. These could include fines, administrative actions, or other legal repercussions as stipulated by the overarching legislation.
The financial implications of this variation are carefully managed to maintain the total value of assistance provided to MVPs at the previously set level. The redistribution of $50 million in duty credits ensures that the overall financial support for the automotive industry remains unchanged, even though the distribution mechanism has been altered.
Consultation with relevant stakeholders, including AusIndustry, the Australian Government Solicitor, FCAI, and its members, has been integral to the development of this variation. This collaborative approach ensures that the changes are practical and well-supported within the industry, aligning with the objectives of the ACIS and the broader automotive sector's needs.