EXPLANATORY STATEMENT
STATUTORY RULES 1985 NO. 230
INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES REGULATIONS (AMENDMENT)
Issued by the Authority of the Minister of State for Industry, Technology and Commerce
The regulations 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 1985.
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)(g)(i) and (ii) of the Act provide that in respect of any grant year after 1981/82, 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; or
(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 1985 of an amount equal to 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 has been maintained since 1981/82 and 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.
As the regulations are not prejudicial to any other party other than the Commonwealth, this retrospective effect is permitted by section 48 of the Acts Interpretation Act 1901.
Overview
The Industrial Research and Development Incentives Regulations (Amendment) Statutory Rules 1985 No. 230, issued by the authority of the Minister of State for Industry, Technology and Commerce, address the need to maintain consistent financial support for Australian companies engaged in industrial research and development. Enacted to amend the Industrial Research and Development Incentives Regulations in accordance with section 23 of the Industrial Research and Development Incentives Act 1976, these regulations prescribe the level of financial assistance payable as commencement grants for the year beginning 1 July 1985. The policy objective is to encourage eligible companies, particularly in the manufacturing, mining, and construction sectors, to invest in industrial research and development by providing a level of assistance that has been maintained since 1981/82. This assistance is intended to foster the establishment of an industrial research and development capability within these sectors. The regulations permit retrospective effect, as they do not prejudice any party other than the Commonwealth, in line with section 48 of the Acts Interpretation Act 1901.
Scope and Application
The Industrial Research and Development Incentives Regulations (Amendment) primarily applies to eligible companies involved in industrial research and development within Australia. These companies can be from the manufacturing, mining, and construction sectors and are encouraged to establish research and development capabilities through financial assistance in the form of commencement grants. The regulations, which fall under the Industrial Research and Development Incentives Act 1976, specify that these grants are intended to be either 50% of the eligible expenditure of the company for the grant year or $40,000, whichever is the lesser amount. The regulations apply nationally across Australia and have been designed to maintain a consistent level of support since the 1981/82 grant year. The regulations do not explicitly state any exclusions or exemptions, and the scope of application is extended through subordinate instruments as per the statutory framework.
Key Provisions
The Industrial Research and Development Incentives Regulations (Amendment) (F1997B01802) modify the existing regulations to adjust the financial assistance provided as commencement grants. According to the Act (section 23), these grants are intended to encourage eligible companies to engage in industrial research and development (IRD) activities. For the grant year commencing 1 July 1985, the regulations specify that the financial assistance, in the form of a commencement grant, shall be the lesser of either 50% of the eligible expenditure of the company for that year or $40,000. This level of assistance has been maintained since the 1981/82 grant year, aiming to foster the establishment of IRD capabilities in Australian manufacturing, mining, and construction sectors.
The regulations impose certain obligations on the eligible companies seeking these grants. Primarily, these companies must ensure that their expenditure qualifies as "eligible expenditure" as defined under the Industrial Research and Development Incentives Act 1976. This involves activities that are genuinely aimed at research and development and are intended to enhance the company's industrial capabilities. Additionally, companies must comply with the documentation and reporting requirements specified by the regulations, including the submission of detailed financial and activity reports to substantiate their claims for the grants.
Failure to comply with the provisions of these regulations can result in various consequences. While the explanatory statement does not detail specific offences or penalties, it is implied that breaches of the grant conditions or misrepresentation of eligible expenditure could lead to the disqualification from receiving the grants. Moreover, depending on the severity and intent behind the non-compliance, there could be potential civil or criminal liabilities. However, the exact nature of these liabilities would be governed by the broader legal framework under which the Industrial Research and Development Incentives Act operates, including general provisions for penalties and enforcement under the Acts Interpretation Act 1901.