EXPLANATORY STATEMENT
Issued by the Authority of the Minister for Finance
Financial Framework (Supplementary Powers) Act 1997
Financial Framework (Supplementary Powers) Amendment
(Agriculture, Fisheries and Forestry Measures No. 2) Regulations 2024
The Financial Framework (Supplementary Powers) Act 1997 (the FFSP Act) confers on the Commonwealth, in certain circumstances, powers to make arrangements under which money can be spent; or to make grants of financial assistance; and to form, or otherwise be involved in, companies. The arrangements, grants, programs and companies (or classes of arrangements or grants in relation to which the powers are conferred) are specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations). The powers in the FFSP Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non‑corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.
The Principal Regulations are exempt from sunsetting under section 12 of the Legislation (Exemptions and Other Matters) Regulation 2015 (item 28A). If the Principal Regulations were subject to the sunsetting regime under the Legislation Act 2003, this would generate uncertainty about the continuing operation of existing contracts and funding agreements between the Commonwealth and third parties (particularly those extending beyond 10 years), as well as the Commonwealth’s legislative authority to continue making, varying or administering arrangements, grants and programs.
Additionally, the Principal Regulations authorise a number of activities that form part of intergovernmental schemes. It would not be appropriate for the Commonwealth to unilaterally sunset an instrument that provides authority for Commonwealth funding for activities that are underpinned by an intergovernmental arrangement. To ensure that the Principal Regulations continue to reflect government priorities and remain up to date, the Principal Regulations are subject to periodic review to identify and repeal items that are redundant or no longer required.
Section 32B of the FFSP Act authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Principal Regulations. Section 32B also authorises the Commonwealth to make, vary and administer arrangements for the purposes of programs specified in the Principal Regulations. Section 32D of the FFSP Act confers powers of delegation on Ministers and the accountable authorities of non-corporate Commonwealth entities, including subsection 32B(1) of the FFSP Act. Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programs.
Section 65 of the FFSP Act provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Financial Framework (Supplementary Powers) Amendment (Agriculture, Fisheries and Forestry Measures No. 2) Regulations 2024 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for government spending to incorporate standards for estimating and reporting agriculture emissions into a digital accounting platform (the program). The program is administered by the Department of Agriculture, Fisheries and Forestry.
The program will help to ensure farmers and the supply chain have confidence that the numbers generated by the greenhouse gas accounting tools can be trusted and are consistent. For farmers and land managers, calculating and understanding a reliable greenhouse gas emissions profile of their business is a fundamental first step towards abatement action.
Funding of $6.8 million over four years from 2024-25 will be available for the program.
Details of the Regulations are set out at Attachment A. A Statement of Compatibility with Human Rights is at Attachment B.
The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.
The Regulations commence on the day after registration on the Federal Register of Legislation.
Consultation
In accordance with section 17 of the Legislation Act 2003, consultation has taken place with the Department of Agriculture, Fisheries and Forestry.
A regulatory impact analysis is not required as the Regulations only apply to non‑corporate Commonwealth entities and do not adversely affect the private sector.
Attachment A
Details of the Financial Framework (Supplementary Powers) Amendment
(Agriculture, Fisheries and Forestry Measures No. 2) Regulations 2024
Section 1 – Name
This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Agriculture, Fisheries and Forestry Measures No. 2) Regulations 2024.
Section 2 – Commencement
This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation.
Section 3 – Authority
This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.
Section 4 – Schedules
This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.
Schedule 1 – Amendments
Financial Framework (Supplementary Powers) Regulations 1997
Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)
This item adds new table item 671 to Part 4 of Schedule 1AB to establish legislative authority for government spending to incorporate emission standards into a digital accounting platform program (the program) to be administered by the Department of Agriculture, Fisheries and Forestry (the department).
Table item 671 – Incorporating Emission Standards into a Digital Accounting Platform Program
The program will help to ensure farmers and the supply chain have confidence that the numbers generated by the greenhouse gas (GHG) accounting tools can be trusted and are consistent. For farmers and land managers, calculating and understanding a reliable greenhouse gas emissions profile of their business is a fundamental first step towards abatement action.
As part of the consultation process for the Agriculture and Land Sector Plan in late 2023, the department received feedback from stakeholders which outlined that key barriers to using GHG accounting tools are:
- confusion and uncertainty about which tools they should use; and
- trust in the results generated by those tools.
A wide range of calculators have been available through industry bodies, private providers and universities. These calculators, which cater to different commodities and circumstances, can generate different results and may not be designed for Australian agricultural systems. Noting that supply chains, international markets and the finance sector place increasing pressure on farmers and land managers to report on their emissions, access to a verified, trusted and easy to use calculator is essential.
In this context, stakeholders have expressed a strong desire for the Government to provide more assurances around the use of calculators in the sector. The program was announced by Senator the Honourable Murray Watt, Minister for Agriculture, Fisheries and Forestry at the Sustainable Agriculture Summit on 23 May 2024: minister.agriculture.gov.au/Watt/media-releases/major-funding-to-help-reduce-ag-emissions.
The program provides a one-off grant of $6.8 million over four years from 2024‑25 to support a digital, farm-level greenhouse gas emission accounting platform to incorporate and maintain consistency with voluntary emissions estimation and reporting standards for the agriculture, fisheries and forestry industries.
This funding forms part of broader Government initiatives of $23.1 million over four years from 2024-25 and $0.9 million per year ongoing to improve greenhouse gas accounting in the agriculture and land sector at the national through to farm level, which includes funding to:
- enhance the National Greenhouse Accounts methods and data collection processes; and
- develop, publish and maintain voluntary emissions estimation and reporting standards for the agriculture, fisheries and forestry industries, being led by the Department of Climate Change, Energy, the Environment and Water (to be incorporated into the digital accounting platform).
This grant will provide funding for a selected provider to incorporate voluntary emissions estimation and reporting standards into a digital GHG accounting platform.
The key objectives are to:
- provide farmers and land managers with confidence that they are using the ‘right tool’ and the results are reliable; and
- help accelerate action to reduce emissions.
Funding amount and arrangements, merits review and consultation
Funding of $6.8 million for the program was included in the 2024-25 Budget under the measure of ‘Agriculture and Land Sectors – low emissions future’ for a period of 4 years commencing in 2024-25. Details are set out in Budget 2024-25, Budget Measures, Budget Paper No. 2 at page 42.
Funding for this item will come from Program 1.1: Agriculture and Land Sectors – low emissions future, which is part of Outcome 1. Details are set out in the Portfolio Budget Statements 2024-25, Budget Related Paper No. 1.1, Agriculture, Fisheries and Forestry Portfolio at pages 21 and 29.
Funding will be allocated through a one-off, competitive grant process, delivered through a grant managed by the Community Grants Hub. The program guidelines setting out the requirements for incorporating the standards into a platform will be informed by consultation with industry, supply chain participants and technical experts to ensure it meets the needs of all users. The grant will comply with the CGRGs.
Spending decisions will be made by the Agriculture Minister, taking into consideration the recommendations of an assessment by departmental officers against the program guidelines. The grant opportunity would be subject to selection processes and due diligence in line with the PGPA Act, FFSP Act and the CGRGs. Information about the grant will be published on the GrantConnect website (grants.gov.au).
Merits review of decisions made in connection with the grant would not be considered appropriate because these decisions relate to the provision of a one-off grant to a certain service provider, over other service providers.
Merits review would not be appropriate because these decisions will relate to the allocation of finite resources between competing applicants and an allocation already made to a party would be affected by overturning the original decision. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see items 4.11 to 4.19 of What decisions should be subject to merit review?).
In addition, the review and audit process undertaken by the Australian National Audit Office also provides a mechanism to review Australian Government spending decisions and report any concerns to the Parliament. These requirements and mechanisms help to ensure the proper use of Commonwealth resources and appropriate transparency around decisions relating to making, varying or administering arrangements to spend relevant money.
Further, the right to review under section 75(v) of the Constitution and review under section 39B of the Judiciary Act 1903 may also be available. Persons affected by spending decisions would also have recourse to the Commonwealth Ombudsman where appropriate.
As part of the consultation process for the Agriculture and Land Sector Plan in late 2023, the department released a consultation paper and held workshops online and in person, participated in industry meetings, and joined many public forums. The department received information, ideas and feedback from a wide range of stakeholders, including:
- farmers and producers
- landowners
- industry representatives and organisations
- research and academia
- Rural Research and Development Corporations
- not for profit organisations
- state and territory governments
- members of the public.
Through this consultation, stakeholders requested a government-endorsed farm level calculator or resources to accelerate baselining of on-farm GHG emissions to:
- increase trust; and
- enable farmers to ‘know their number’ and take actions that ‘reduce their number’.
To ensure user needs are met, a reference group with membership from industry, agtech (agricultural technology) providers, supply chain participants, the finance sector and First Nations groups will be formed.
The proposal also responds to the Climate Change Authority’s 2023 review of the National Greenhouse and Energy Reporting scheme which highlighted the need for the development of robust facility-level reporting in the agriculture and land sectors.
Constitutional considerations
Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the external affairs power (section 51(xxix) of the Constitution).
External affairs power
Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to ‘external affairs’. The external affairs power supports legislation implementing Australia’s international obligations under treaties to which it is a party.
Australia has obligations under a number of international agreements to reduce its greenhouse gas emissions, and ultimately to move towards net zero emissions:
United Nations Framework Convention on Climate Change (UNFCCC)
The primary agreement is the UNFCCC, the ultimate objective of which is the ‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system’ (Article 2).
Under Article 4 of the UNFCCC, Australia’s obligations include to:
- formulate, implement, publish and regularly update national programs containing measures to mitigate climate change by addressing anthropogenic emissions by sources and removal by sinks of all greenhouse gases not controlled by the Montreal Protocol (Article 4.1(b))
- promote and cooperate in the development, application and diffusion, including transfer, of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of greenhouse gases in all relevant sectors (Article 4.1(c))
- adopt national policies and take corresponding measures on the mitigation of climate change by limiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs (Art 4.2(a)).
Kyoto Protocol
Article 10(b) of the Kyoto Protocol obliges contracting parties to ‘formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to mitigate climate change and measures to facilitate adequate adaptation to climate change’.
Paris Agreement
Article 4.2 of the Paris Agreement obliges contracting parties to ‘prepare, communicate and maintain successive nationally determined contributions that it intends to achieve’ and to ‘pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions’.
The program gives effect to the above obligations by providing funding to support a digital, farm-level greenhouse gas emission accounting platform which will assist in taking action to reduce emissions.
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Financial Framework (Supplementary Powers) Amendment (Agriculture, Fisheries and Forestry Measures No. 2) Regulations 2024
This disallowable legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the legislative instrument
Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FFSP Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the Principal Regulations) and to make, vary and administer arrangements and grants for the purposes of programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the Principal Regulations specify the arrangements, grants and programs. The powers in the FFSP Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by Ministers and the accountable authorities of non‑corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013.
The Financial Framework (Supplementary Powers) Amendment (Agriculture, Fisheries and Forestry Measures No. 2) Regulations 2024 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for government spending to incorporate standards for estimating and reporting agriculture emissions into a digital accounting platform (the program). The program is administered by the Department of Agriculture, Fisheries and Forestry Measures.
The Government will provide a one-off grant of $6.8 million over 4 years from 2024-25 to support a digital, farm-level greenhouse gas (GHG) emission accounting platform that will incorporate and maintain consistency with the standards. Development, publication and maintenance of the standards is being led by the Department of Climate Change, Energy, the Environment and Water. This forms part of broader Australian Government initiatives to improve greenhouse gas accounting in the agriculture and land sector at the national through to farm level.
The program will assist farmers and land managers:
- in taking action to reduce GHG emissions; and
- to ensure farmers and the supply chain have confidence that the numbers generated by the greenhouse gas accounting tools can be trusted and are consistent.
For farmers and land managers, calculating and understanding a reliable greenhouse gas emissions profile of their business is a fundamental first step towards abatement action.
Human rights implications
Table item 671 does not engage any of the applicable rights or freedoms.
Conclusion
Table item 671 is compatible with human rights, as it does not raise any human rights issues.
This disallowable legislative instrument is compatible with human rights because it does not raise any human rights issues.
Senator the Hon Katy Gallagher
Minister for Finance