Commonwealth of Australia
Industry Research and Development Act 1986
Policies and practices of the IR&D Board in relation to the Innovation Investment Fund Program Round One
Direction No. 1 of 1999
I, NICHOLAS HUGH MINCHIN, Minister for Industry, Science and Resources of the Commonwealth of Australia, acting under subsection 20(1) of the Industry Research and Development Act 1986, give the following direction to the Industry Research and Development Board.
Dated 26 Nov 1999.
NICK MINCHIN
Minister for Industry, Science and Resources
PART 1—PRELIMINARY
Citation
- This direction may be cited as the IIF program Round One, Policies and Practices (Amendment) Direction No. 1 of 1999.
Commencement
2. This direction commences on the day on which particulars of the direction are published in the Gazette.
[NOTE: For the publication of the particulars, see s. 20 (3) of the Act.]
Amendment of Principal Direction
3. This direction amends the IIF program, Policies and Practices Direction No. 1 of 1997 (Principal Direction).
Interpretation
4. Clause 3 of the Principal Direction is amended by the addition of the following definitions:
“non-profit enterprise” means an enterprise whose governing documents prohibit the distribution of profits to its members.
“qualifying enterprise” means an enterprise that:
(a) was established in Australia; and
(b) is either:
(i) an institution of higher education specified in section 4(1) of the Higher Education Funding Act 1988; or
(ii) a wholly-owned Commonwealth, State or Territory enterprise which the Board considers has objects that include:
(A) carrying out R&D activities;
(B) carrying out services, or making available facilities, in relation to science or technology;
(C) training, or assisting in the training of, persons in the field of scientific or technological research; or
(D) collecting, interpreting or publishing information relating to science or technology; or
(iii) a non-profit enterprise which satisfies the objectives of the IIF program as outlined in clause 5, and which the Board considers has objects that include any of those set out in paragraph (ii) of this definition.
Eligible investee company
5. Clause 26(g) of the Principal Direction is replaced with:
(g) at the time when the fund first invests in or provides finance to the company, it is not related (within the meaning of section 50 of the Corporations Law) to a company (other than a qualifying enterprise) which has an average annual revenue, over the previous 2 years of income, in excess of $4 million per year.
Overview
The Industry Research and Development Act 1986 was enacted to promote and facilitate research and development activities in Australia, aiming to foster innovation and economic growth. To address the need for strategic investment in research and development, the Act established the Innovation Investment Fund Program, which was later amended through legislative instruments such as Direction No. 1 of 1999. This direction, issued by the Minister for Industry, Science and Resources, amends the policies and practices of the Innovation Investment Fund Program, specifically targeting the eligibility criteria for investee companies. The policy objective is to ensure that investments are directed towards entities that can effectively contribute to Australia's research and development objectives, particularly by supporting qualifying enterprises that align with the program’s goals.
Scope and Application
The IIF Program Round One, Policies and Practices (Amendment) Direction No. 1 of 1999, issued under the Industry Research and Development Act 1986, amends the policies and practices of the Industry Research and Development Board concerning the Innovation Investment Fund Program. The direction specifies that it applies to the Board's operations and investments, particularly in relation to the fund's eligibility criteria for investee companies. It is applicable to entities and companies seeking investment from the Innovation Investment Fund, including qualifying enterprises which must be established in Australia and meet specific criteria such as being an institution of higher education, a wholly-owned government enterprise, or a non-profit enterprise with certain objectives. The direction also introduces a financial threshold for related companies, excluding those with an average annual revenue exceeding $4 million over the previous two years from eligibility, unless they are qualifying enterprises. This legislative instrument operates at the Commonwealth level and its amendments are effective from the date of publication in the Gazette.
Key Provisions
The key operative sections of the "IIF program Round One, Policies and Practices (Amendment) Direction No. 1 of 1999" primarily involve amendments to the eligibility criteria for the Innovation Investment Fund (IIF) program under the Industry Research and Development Act 1986. Section 4 adds new definitions, including "non-profit enterprise" and "qualifying enterprise," which specify the types of enterprises eligible for investment. Section 5 amends clause 26(g) of the Principal Direction, establishing new eligibility criteria for investee companies. These provisions require that an investee company, at the time of initial investment, must not be related to another company with an annual revenue exceeding $4 million, unless that company is a qualifying enterprise.
The obligations and requirements imposed by this legislation on the parties involved are primarily focused on ensuring that the entities eligible for investment under the IIF program meet specific criteria. The Industry Research and Development Board must consider the objects and activities of the enterprises to determine their eligibility. The Board also has to assess whether an investee company is related to another company with a specified revenue threshold, ensuring compliance with the new criteria outlined in the direction.
Breaching the provisions of this direction could result in various consequences, although the specific penalties are not detailed within the text. Generally, under the Industry Research and Development Act 1986, failure to comply with directions issued by the Minister could lead to civil or criminal penalties. These penalties might include fines or other sanctions, but the exact nature and severity of these penalties would be determined based on the specific breach and relevant legal frameworks. The maximum penalties, if applicable, would be consistent with those prescribed under the primary Act and any related regulations or legislative instruments.