Financial Framework (Supplementary Powers) Amendment (Foreign Affairs and Trade Measures No. 4) Regulations 2025

EXPLANATORY STATEMENT

Issued by the Authority of the Minister for Finance

Financial Framework (Supplementary Powers) Act 1997

Financial Framework (Supplementary Powers) Amendment

(Foreign Affairs and Trade Measures No. 4) Regulations 2025

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 FFSP Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the FFSP Act.

The Financial Framework (Supplementary Powers) Amendment (Foreign Affairs and Trade Measures No. 4) Regulations 2025 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for the Government to provide grants to the International Atomic Energy Agency (the grants). The grants will be administered by the Department of Foreign Affairs and Trade.

The International Atomic Energy Agency (IAEA) is an international organisation within the United Nations system which seeks to promote the safe, secure and peaceful use of nuclear technologies. The Government will provide grants funding of up to $16.0 million in 2025-26 to the IAEA to support grant activities under the Australian Nuclear Science Support Program (ANSSP) and the Australian Safeguards Support Program (ASSP).

Activities under the ANSSP will support outcomes in medicine, food security, environmental management, and applied nuclear science research. The ANSSP will build regional capacity in nuclear science and technology, reinforcing Australia’s reputation as a responsible and reliable partner on nuclear issues.

Activities under the ASSP will support the development and implementation of nuclear safeguards verification technologies and methods. The development of next generation safeguards will ensure the IAEA verification capabilities are meeting the challenges of rapidly advancing technology, including naval and maritime nuclear propulsion. ASSP activities will support the IAEA capacity to integrate new technologies required to safeguard naval nuclear propulsion and enhance Australian safeguards expertise and capability.

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 Foreign Affairs and Trade.

Attachment A

Details of the Financial Framework (Supplementary Powers) Amendment

(Foreign Affairs and Trade Measures No. 4) Regulations 2025

Section 1 – Name

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Foreign Affairs and Trade Measures No. 4) Regulations 2025.

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 (the Principal Regulations) are amended as set out in the Schedule to the Regulations.

Schedule 1 – Amendments

Financial Framework (Supplementary Powers) Regulations 1997

The item in Schedule 1 amends Schedule 1AB to the Principal Regulations to establish legislative authority for government spending on an activity to be administered by the Department of Foreign Affairs and Trade (the department).

Item 1 – In the appropriate position in Part 3 of Schedule 1AB (table)

This item adds one new table item to Part 3 of Schedule 1AB.

Table item 106 – Grants to the International Atomic Energy Agency

New table item 106 establishes legislative authority for the Government to provide grants to the International Atomic Energy Agency (IAEA) to fund activities for the peaceful application of nuclear science and for research, development and implementation of nuclear safeguards.

The IAEA is an international organisation within the United Nations system which seeks to promote the safe, secure and peaceful use of nuclear technologies. It was established under the Statute of the International Atomic Energy Agency [1957] ATS 11 (the Statute).

Article II of the Statute provides that the IAEA’s objectives are to accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the world. Article III sets out the functions of the IAEA, relevantly:

1.       To encourage and assist research on, and development and practical application of, atomic energy for peaceful uses throughout the world; and, if requested to do so, to act as an intermediary for the purposes of securing the performance of services or the supplying of materials, equipment, or facilities by one member of the Agency for another; and to perform any operation or service useful in research on, or development or practical application of, atomic energy for peaceful purposes.

and

1.       To establish and administer safeguards designed to ensure that special fissionable and other materials, services, equipment, facilities, and information made available by the Agency or at its request or under its supervision or control are not used in such a way as to further any military purpose; and to apply safeguards, at the request of the parties, to any bilateral or multilateral arrangement, or at the request of a State, to any of that State's activities in the field of atomic energy;

Grants to the IAEA will support the provision of extrabudgetary funding for new rounds of two existing grant programs: the Australian Nuclear Science Support Program and the Australian Safeguards Support Program.

The grant programs would support the department’s Outcome 1: the advancement of Australia’s international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign, trade and international development policy priorities. This would be achieved through the department’s Program 1.8.1: Nuclear-Powered Submarine Program, which provides the legal, policy and diplomatic capability, and regulatory oversight for nuclear safeguards and security, necessary to support Australia’s acquisition of conventionally-armed nuclear-powered submarines, while setting the highest non-proliferation standards.

Australian Nuclear Science Support Program (ANSSP)

The ANSSP was announced in the 2023-24 Budget as a two-year program terminating in 2024-2025. The Government provided grant funding totalling $9.5 million to the IAEA to support the IAEA’s activities in the peaceful application of nuclear science and technology in the fields of medicine, environmental management and research.

Examples of grant activities include:

• Pacific and Southeast Asia food security research through Atoms4Food;
• Pacific participation in nuclear science training and research projects through the Regional Cooperative Agreement for Research, Development and Training Related to Nuclear Science and Technology for Asia and the Pacific;
• three Australian positions in the IAEA Secretariat;
• strengthening radiation safety frameworks in four Pacific countries;
• Pacific nuclear science support through Australia’s IAEA Collaborating Centre;
• Pacific cancer care through Rays of Hope, for example in Tonga;
• Pacific and Southeast Asia training fellowships for women nuclear scientist through the Marie Sklodwoska Curie Fellowship program;
• environmental monitoring support for Small Island Developing States; and
• tackling ocean plastic contamination in seafood through research undertaken under the Nuclear Technology for Controlling Plastic Pollution initiative. 

In the 2025-26 Budget, the Government agreed to extend the ANSSP by one year to 2025-26 with additional funding of $8.0 million to continue supporting the IAEA’s activities.

The extended ANSSP will be a closed, non-competitive grant program to support IAEA’s activities in the peaceful application of nuclear science in medicine, environmental management and research as well as capacity building. Examples of grant activities include support for research in controlling marine microplastic pollution through the application of nuclear technologies, funding Masters-level scholarships for women in nuclear science and enhancing country level nuclear security strategies to help detect illicit trafficking of nuclear and radioactive material.  

This support to the IAEA will complement Australia’s development and foreign policy priorities by supporting the needs and aspirations of developing countries, strengthening responsible nuclear stewardship in Australia’s region and building support and confidence in the IAEA’s role.

The objectives of the extended ANSSP are to: 

• support increased access to nuclear science, in particular in the fields of medicine, environmental management and research; and
• support capacity building in nuclear science.

The intended outcomes of the extended ANSSP are:

• improved healthcare through better access to nuclear medicine and diagnostics;
• enhanced environmental management for monitoring and sustainability;
• strengthened research and innovation via regional collaboration;
• increased regional capacity with skilled professionals; and 
• safer and more secure use of nuclear technologies.

Australian Safeguards Support Program (ASSP)

The ASSP was announced in the 2023-24 Budget as a two-year program terminating in
2024-25. The Government provided grant funding totalling $7.3 million to the IAEA to support safeguards research and development activities and enhancing IAEA safeguards management. Examples of grant activities included:

• development by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) of autonomous robotic verification systems for spent nuclear fuel;
• purchase of new digital inspection technologies for field deployment;
• purchase of next generation sealing devices for containment and surveillance;
• support to the IAEA diversity uplift program for safeguards management;
• purchase of specialised shipping containers for nuclear material;
• supplementing particle analysis service contracts for Australian providers to match commercial rates; and
• secondments in the IAEA to advance the development and adoption of new capabilities in robotics, artificial intelligence (AI), satellite imagery, and novel safeguards approaches.

In the 2025-26 Budget, the Government agreed to extend the ASSP by one year to 2025-26 with additional funding of up to $8.0 million provided to the IAEA to continue supporting its activities under the ASSP.

The extended ASSP will be a closed, non-competitive grant program to the IAEA to support its development and implementation of nuclear safeguards verification technologies and techniques. The ASSP will provide the financial vehicle to deliver the policy imperative of supporting the IAEA with the development and implementation of novel safeguards approaches for the Australia’s Naval Nuclear Propulsion (NNP) Program.

The support to the IAEA will target both the development of advanced safeguards measures, including non-optical sensors and detectors, AI and robotics, and the implementation of existing safeguards measures, such as digital surveillance and containment technologies, that raise IAEA efficiency and effectiveness of safeguards implementation. This will better position the IAEA to integrate the first of a kind safeguards measures required for the NNP Program in the international safeguards system.

The objectives of the extended ASSP are to:

• strengthen safeguards and verification operations internationally and support IAEA development and implementation of new and existing techniques and technologies for verification and safeguards measures that meet domestic and IAEA regulatory requirements; and
• support the development of Australian safeguards expertise and capability to ensure the effective operation of the Australian safeguards system.

The intended outcomes of the extended ASSP are:

• adoption by the IAEA of new effective and efficient safeguards measures;
• development of advanced safeguards measures for adoption by the IAEA;
• enhanced safeguards research and development capabilities in Australia; and
• strengthened safeguards management systems for the IAEA.

Funding amount and arrangements, merits review and consultation

Total funding of up to $16.0 million for the grants was included in the 2025-26 Budget under the measure ‘Nuclear Powered Submarine Program – continuation of whole of government support’ for a period of one year commencing in 2025-26. Details are set out in Budget
2025-26, Budget Measures, Budget Paper No. 2 2025-26 at pages 35-36.

Funding for the item will come from Program 1.8.1 - Component 8: Nuclear Powered Submarine Program, which is part of Outcome 1. Details are set out in the Portfolio Budget Statements 2025-2026, Budget Related Paper No. 1.8, Foreign Affairs and Trade Portfolio at page 44.

The department will deliver the closed, non-competitive grants in accordance with the Commonwealth resource management framework, including the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the Public Governance, Performance and Accountability Rule 2014 and the Commonwealth Grants Rules and Principles 2024 (CGRPs).

Consistent with the CGRPs, the department will develop grant opportunity guidelines and will have regard to the nine key principles in administering the grants. The guidelines will be made publicly available on GrantConnect (www.grants.gov.au) and the outcomes will also be published on GrantConnect. The grants will be administered by the department.

The grants will only be open to the IAEA. The IAEA will submit an application to the department which will be assessed against the eligibility criteria, including an overall consideration of value with money. An expert panel will assess the application on its merit. The expert panel would be made up of the department and/or the Australian Safeguards and Non-Proliferation Office (ASNO) representatives.

The decision makers who would decide if the application was successful would be the First Assistant Secretary (Senior Executive Service Band 2), International Security Division of the department for grant funding under the ANSSP and the Director General of ASNO for grant funding under the ASSP. The decision makers would approve grants in accordance with the PGPA Act and the Financial Framework (Supplementary Powers) Act 1997. The department would enter into a grant arrangement with the IAEA if successful.

Funding decisions made in connection with the grants are not considered suitable for independent merits review, as they would be decisions relating to the allocation of a finite resource, from which all potential claims for a share of the resource cannot be met. Grants funding under the ANSSP and ASSP, by their nature, would be unlikely to affect the interests of a sole individual. The IAEA is the only global specialist agency within the United Nations system dedicated to scientific and technical cooperation in the nuclear field, the promotion of peaceful uses of nuclear technology, and nuclear safeguards and security. The IAEA works with its 180 Member States and worldwide partners. Decisions relating to the allocation of a finite resource, from which all potential claims for a share of the resource cannot be met, have generally been considered by the Administrative Review Council (ARC) to be inappropriate for merits review. The ARC has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.11 to 4.19 of the guide, What decisions should be subject to merit review?).

The review and audit process undertaken by the Australian National Audit Office 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 the making, varying or administering of arrangements to spend relevant money.

Consultation with the IAEA has occurred in the relation to the ANSSP and the ASSP, including with technical cooperation experts and nuclear safeguards and scientific experts, through Canberra-based officials and on an ongoing basis with Australia’s mission in Vienna.

On the ANSSP, the focus of stakeholder engagement has been to ensure funding is aligned with the needs of the IAEA’s programming in the Pacific and Southeast Asia, consistent with national plans. Government officials across Asia and the Pacific are supportive of the ANSSP grants. They have been consulted through the IAEA’s regional cooperation mechanism, the 24-country Regional Cooperative Agreement for Research, Development and Training Related to Nuclear Science and Technology for Asia and the Pacific (RCA) and the IAEA’s seven-country arrangement, the Sub-Regional approach to the Pacific Islands (SAPI).  

On the ASSP, the focus of stakeholder engagement has been to ensure funding is well aligned with the needs of the IAEA and to ensure funding efforts are complementary not duplicative.  Further consultation has occurred with key Nuclear Weapons States, the United Kingdom (UK) and the United States (US), to ensure a coordinated approach to extrabudgetary funding for safeguards and nuclear security. The IAEA, US and UK counterparts are all supportive of the ASSP grants. The Australian Submarine Agency has been consulted on the proposed ASSP grant program through the Safeguards Research and Development Coordination Committee and support the focus of effort on integration of new safeguards technologies into the IAEA system to enable the Naval Nuclear Propulsion program.

Constitutional considerations

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose 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 with respect to matters or things outside the geographical limits of Australia. It also supports legislation with respect to matters concerning Australia’s relations with other nations and with international organisations.

Spending will support increased access to and capacity building in peaceful nuclear science, particularly in the fields of medicine, environmental management and research and will focus on supporting development and access to civilian nuclear science in regional partners.

Spending will also support the global non-proliferation of nuclear weapons through the development and implementation of next generation safeguards and security capabilities for the IAEA consistent with Australia’s Non-Proliferation Treaty obligations.

Funding will be provided to the IAEA which is an international organisation within the United Nations system.

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 (Foreign Affairs and Trade Measures No. 4) Regulations 2025

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 (Foreign Affairs and Trade Measures No. 4) Regulations 2025 (the Regulations) amend Schedule 1AB to the Principal Regulations to establish legislative authority for the Government to provide grants to the International Atomic Energy Agency (IAEA). Grants to the IAEA will be administered by the Department of Foreign Affairs and Trade.

The IAEA is an international organisation within the United Nations system which seeks to promote the safe, secure and peaceful use of nuclear technologies. The Government will provide grants funding of up to $16.0 million in 2025-26 to the IAEA to support grant activities under the Australian Nuclear Science Support Program (ANSSP) and the Australian Safeguards Support Program (ASSP).

Activities under the ANSSP will support outcomes in medicine, food security, environmental management, and applied nuclear science research. The ANSSP will build regional capacity in nuclear science and technology, reinforcing Australia’s reputation as a responsible and reliable partner on nuclear issues.

Activities under the ASSP will support the development and implementation of nuclear safeguards verification technologies and methods. The development of next generation safeguards will ensure the IAEA verification capabilities are meeting the challenges of rapidly advancing technology, including naval and maritime nuclear propulsion and next generation advanced reactors. ASSP activities will support the IAEA capacity to integrate new technologies required to safeguard naval nuclear propulsion and enhance Australian safeguards expertise and capability.

Human rights implications

This disallowable legislative instrument does not engage any of the applicable rights or freedoms as funding activities under the ANSSP and ASSP will not affect Australian citizens or people subject to Australia’s jurisdiction and Australia will not be exercising effective control over the people the grants will affect. This is because they are grants to the IAEA for activities to be undertaken outside of Australia.

Conclusion

This disallowable legislative instrument is compatible with human rights as it does not raise any human rights issues.

Senator the Hon Katy Gallagher

Minister for Finance