Directions in Respect of Competitive Grants for Research and Development

Overview

The Industry Research and Development Act 1986 was enacted to address the need for competitive grants to support research and development activities in Australia. This legislation was introduced by the Parliament of Australia to encourage companies, particularly small to medium enterprises, to develop competitive goods, services, and systems, and to foster innovation and technology development. The Act aims to achieve this by providing grants on a competitive basis for various research and development activities. The Industry Research and Development Board, established under this Act, is tasked with assessing applications for these grants, ensuring they align with the Commonwealth Government’s industry development policy objectives. These objectives include encouraging companies to adopt new technologies, strengthening linkages between developers and users of technology, and fostering collaboration between industry and research institutions. The legislation also sets specific eligibility criteria for applicants, such as the nature of the project, its potential benefits to Australia, and the necessity of grant support for the project's completion. The Directions in Respect of Competitive Grants for Research and Development, made under section 20 of the Act, further detail the assessment process, relative merit criteria, and the sunsetting of the competitive grants program, which ceased accepting new applications after 31 March 1997.

Scope and Application

The Directions in Respect of Competitive Grants for Research and Development, made under section 20 of the Industry Research and Development Act 1986, apply to applications for competitive grants aimed at fostering research and development in Australian industry. These grants are intended to support projects that align with the Commonwealth Government's industry development policy objectives, such as encouraging competitive goods and services, enhancing manufacturing capabilities, and promoting collaboration between companies and research institutions. The legislation applies to eligible entities, including small to medium-sized enterprises, that propose projects involving research and development or product development, provided the projects meet certain criteria like the exploitation of results for Australia's benefit and the inability to gain full financial benefits from other tax concessions. The grants are limited to a maximum of 50% of eligible project expenditure and must be completed within three years. Notably, applications for these grants are no longer accepted after 31 March 1997, and no new agreements for the grants can be made after 31 December 1997, except for variations of existing agreements. This legislative instrument extends its application through amendments and variations, ensuring that it evolves in alignment with changing industrial needs and policy objectives.

Key Provisions

The primary provisions of the Directions in Respect of Competitive Grants for Research and Development (sections 1 and 2) outline the criteria for assessing applications for competitive grants aimed at fostering research and development. Section 1 mandates that the Industry Research and Development Board (IRD Board) consider applications with a focus on specific objectives, including encouraging companies to develop internationally competitive goods and services, adopt new products and methods to enhance productivity, and strengthen linkages between technology developers and users. Section 2 specifies the types of projects eligible for grants, such as market-driven research and development, high-risk collaborative activities, trial and demonstration projects, and collaborative research between industry and research institutions. The Act imposes several obligations on the IRD Board and applicants. Section 3 sets out the eligibility criteria for grant applications, ensuring that projects involve research and development or product development, aim to develop internationally competitive goods or services, and will benefit Australia. The project must also be unable to proceed without grant support and must not exceed 50% of eligible project expenditure. Additionally, the project must be completed within three years, and the applicant must be unable to obtain full financial benefit under the Income Tax Assessment Act 1936. Section 4 establishes relative merit criteria for assessing applications that meet the eligibility criteria, with a focus on factors such as management capability, market need, and national benefits. Under Section 5, the Act includes provisions for the sunsetting of the Competitive Grants Program, stipulating that the IRD Board must not consider applications made after 31 March 1997 or enter into agreements for new grants after 31 December 1997, except for variations of existing agreements. Non-compliance with these provisions may lead to civil or criminal consequences, although specific penalties are not outlined in the text provided. The Act's regulatory framework aims to ensure that grant recipients adhere to the outlined criteria and objectives, thereby promoting the intended benefits of the research and development initiatives.