EXPLANATORY STATEMENT
STATUTORY RULES 1984 NO. 194
Issued by the authority of the Minister for Science and Technology
INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES ACT 1976
INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES REGULATIONS
Section 42 of the Industrial Research and Development Incentives Act 1976 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all 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 regulations will amend the Industrial Research and Development Incentives Regulations by prescribing, in accordance with section 23 of the Industrial Research and Development Incentives Act 1976, the level of financial assistance payable as commencement grants in relation to the year that commenced on 1 July 1984.
Commencement grants are provided under Division I of Part III of the Act to encourage eligible companies to become involved in industrial research and development. Sub-paragraphs 23(2)(q)(i) and (ii) of the Act provide that in respect of any grant year after 1981/1982 the level of commencement grants shall be an amount equal to whichever is the lesser of the following amounts:
i an amount equal to such percentage of the eligible expenditure of the company in respect of the grant year as is prescribed in relation to that grant year, being a percentage that does not exceed 50 per centum;
ii such amount as is prescribed in relation to that grant year, being an amount that does not exceed $40 000.
The regulations provide for the payment of commencement grants in respect of the grant year that commenced on 1 July 1984 of an amount equal to either 50 per cent of the eligible expenditure of the company in that grant year, or $40 000, whichever is the less.
This level of assistance is considered necessary to give an effective degree of encouragement to Australian manufacturing, mining and construction companies to establish an industrial research and development capability.
Overview
The Industrial Research and Development Incentives Regulations 1984, issued under the authority of the Minister for Science and Technology, were enacted to amend the Industrial Research and Development Incentives Regulations 1976. These regulations are designed to implement the Industrial Research and Development Incentives Act 1976, specifically addressing the need to prescribe the level of financial assistance for commencement grants for the year commencing 1 July 1984. The Act aims to provide financial incentives to encourage eligible companies in the manufacturing, mining, and construction sectors to invest in industrial research and development activities. By setting the level of commencement grants at either 50 per cent of the eligible expenditure or a capped amount of $40,000, the regulations seek to effectively stimulate industrial research and development efforts in Australia.
Scope and Application
The Industrial Research and Development Incentives Act 1976 applies to eligible companies that are engaged in industrial research and development activities within Australia. The Act provides financial assistance in the form of commencement grants to encourage eligible companies to invest in research and development. This assistance is intended to support Australian manufacturing, mining, and construction companies in developing their research and development capabilities. The Act’s geographic reach is national, applying across all states and territories of Australia. The Act allows for the establishment of regulations to determine the specifics of the financial assistance, such as the percentage of eligible expenditure or the maximum dollar amount of the grant, and these regulations are made under section 42 of the Act. The Industrial Research and Development Incentives Regulations 1984, for instance, specify that for the grant year commencing on 1 July 1984, the commencement grant is to be the lesser of 50% of the company's eligible expenditure or $40,000. The Act does not specify exclusions or exemptions other than those outlined in the regulations, which are designed to ensure that the financial assistance is effectively targeted at eligible companies.
Key Provisions
The Industrial Research and Development Incentives Act 1976 (the Act) provides a framework for supporting Australian companies engaged in industrial research and development through financial assistance. Specifically, Section 23 of the Act mandates the payment of commencement grants to eligible companies as an incentive to invest in research and development activities. Section 42 authorises the Governor-General to issue regulations to determine the specifics of these grants, ensuring they comply with the Act. The regulations issued under this authority detail the amount of commencement grants for the financial year starting 1 July 1984.
Under the amended Industrial Research and Development Incentives Regulations, for the 1984 grant year, the commencement grant is set at either 50 per cent of the company's eligible expenditure or $40,000, whichever amount is less. This dual approach ensures that the grants are sufficiently flexible to support companies of varying sizes and expenditure levels. Eligible companies must ensure they meet the criteria set forth in the Act to qualify for these grants, which include being involved in manufacturing, mining, or construction sectors. These companies must also demonstrate that their research and development activities align with the objectives of the Act.
The Act imposes specific obligations on eligible companies to provide accurate and complete information regarding their eligible expenditure. This includes maintaining detailed records and documentation to substantiate their claims for grants. Companies must also adhere to any additional requirements or conditions stipulated in the regulations to ensure they qualify for the financial assistance. Compliance with these obligations is essential to avoid any penalties or disqualification from receiving grants.
Failure to comply with the requirements of the Act and the regulations may result in civil or criminal consequences. For instance, providing false or misleading information to obtain a grant can lead to penalties under Section 127 of the Act, which may include fines or other sanctions. Additionally, the Act provides for the recovery of any incorrectly paid grants, ensuring that financial assistance is distributed fairly and appropriately. The precise penalties are not detailed in the explanatory statement but generally include fines that may be proportionate to the severity and intent of the breach.