EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry, Innovation and Science
Industry Research and Development Act 1986
Industry Research and Development (Automotive Engineering Graduate Program) Instrument 2018
Purpose and Operation
Section 33 of the Industry Research and Development Act 1986 (the IR&D Act) provides a mechanism for the Minister to prescribe programs, by disallowable legislative instrument, in relation to industry, innovation, science or research, including in relation to the expenditure of Commonwealth money under such programs.
The statutory framework provided by s33 of the IR&D Act enables a level of flexibility to provide authority for Commonwealth spending activities in relation to industry, innovation, science and research programs. This allows the Government to respond quickly and appropriately to the need to implement innovative ideas and pilot programs on an ongoing basis and as opportunities arise. Prescribing programs in legislative instruments provides transparency and parliamentary oversight of Government programs and spending activities, whilst reducing administrative burden on the Commonwealth.
Once a program is prescribed by the Minister under s33, subsection 34(1) allows the Commonwealth to make, vary or administer arrangements in relation to activities under the prescribed program. Arrangements may include contracts, funding agreements or other arrangements, and may provide for money to be payable by the Commonwealth to one or more third parties. The power conferred on the Commonwealth by subsection 34(1) may be exercised on behalf of the Commonwealth by a Minister or an accountable authority of a non-corporate entity, or by their delegate (under s36).
The purpose of the Industry Research and Development (Automotive Engineering Graduate Program) Instrument 2018 (the Legislative Instrument) is to prescribe the Automotive Engineering Graduate Program (the Program). The funding for the Program has been secured through the Department of Industry, Innovation and Science 2018-19 Budget.
The Program provides $5 million to increase the pipeline of post graduate students into Australia’s automotive engineering sector and help automotive businesses to grow, improve productivity and be globally competitive. It will develop high quality graduate engineers with on the job experience and related skills that match future automotive skill requirements.
The intended outcomes of the program are:
- A steady flow of qualified, job-ready automotive engineers into the sector
- Increased level of advanced skills in the automotive sector
- A stronger, more productive and more competitive automotive sector in Australia
Funding is available to successful universities to deliver post graduate student stipends for projects in areas of knowledge priority for automotive engineering.
Funding authorised by this Legislative Instrument comes from Program 2, Outcome 1, as set out in the Portfolio Budget Statements 2018-19, Budget Related Paper No. 1.13A, Industry, Innovation and Science Portfolio (https://www.industry.gov.au/sites/g/files/net3906/f/2018-19-department-of-industry-innovation-and-science-pbs.pdf) at page 33.
The Program will be delivered by the Department of Industry, Innovation and Science’s (the Department) Business Grants Hub, which is a specialised design, management and delivery body with extensive expertise and capability in delivering similar programs.
The Program is a competitive, merits based grants program. The Program is administered by the Department in accordance with the Commonwealth Grant Rules and Guidelines 2017 (http://www.finance.gov.au/sites/default/files/commonwealth-grants-rules-and-guidelines.pdf). Eligibility and merit criteria will be outlined in grant opportunity guidelines, available at business.gov.au.
Spending decisions will be made by the Program Delegate who is an AusIndustry Senior Executive Service officer responsible for administering the Program, taking into account the recommendations of a departmental assessment committee.
Grants to universities will be a minimum of $200,000 up to a maximum of $1 million. The grant amount may be up to 100% of eligible project costs, however it is expected that funding provided will be used by universities to leverage existing post-graduate and honours programs towards automotive knowledge priorities.
The Program involves the allocation of finite resources between competing applicants and an allocation that has been made to another party would be affected if the original decision was overturned. In addition, there is a robust and extensive assessment process, an enquiry and feedback process, and an existing complaints mechanism for affected applicants. Therefore, external merits review is not available in relation to decisions about the provision of grants under the Program.
Applications will be assessed against the eligibility criteria and merit criteria set out in the grant opportunity guidelines in two stages. At first instance, applications will be assessed by AusIndustry (a division of the Department) against the eligibility criteria. A departmental committee will then consider eligible applications against the merit criteria. This will include comparing the applications and scoring each application out of 100. The committee may comprise representatives from the Australian Government and other independent technical experts. The departmental committee may seek input from independent experts to inform their assessments.
Applications must address the eligibility and merit criteria, and provide relevant supporting information. The amount of detail and supporting evidence should be relative to the project size, complexity and funding amount requested. Larger and more complex projects should include more detailed evidence. To be competitive, applications must score highly against each merit criterion.
After considering the applications, the departmental committee will make recommendations to the Program Delegate regarding those applications suitable for funding. The Program Delegate will make the final decision about which grants to approve, taking into consideration the departmental committee’s recommendations, and the availability of grant funds. The Program Delegate will not approve funding if there are insufficient Program funds available across relevant financial years for the Program.
Both successful and unsuccessful applicants will be informed in writing. Unsuccessful applicants have an opportunity to discuss the outcome with the Department, and can submit a new application for the same or similar project in any future funding rounds. Where this occurs, applicants should include new or more information to address the weaknesses identified in their previous application.
Persons who are otherwise affected by decisions or who have complaints about the Program will also have recourse to the Department. The Department investigates any complaints about the Program in accordance with its complaints policy and procedures. If a person is not satisfied with the way the Department handles the complaint, they may lodge a complaint with the Commonwealth Ombudsman.
The Legislative Instrument specifies that the Program spending is supported by the corporations power (paragraph 51(xx) of the Constitution), the express incidental power (paragraph 51(xxxix) of the Constitution), the executive power (section 61 of the Constitution) and the territories power (section 122 of the Constitution).
The corporations power empowers the Parliament to make laws with respect to foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth (paragraph 51(xx) of the Constitution). The corporations power supports Commonwealth activities which assist the activities of foreign corporations, and trading or financial corporations (together, constitutional corporations). In that regard, the Program prescribed by the Legislative Instrument singles out and confers on some constitutional corporations (namely, trading or financial corporations) benefits which are directed to assisting those corporations in the conduct of their ordinary activities, and imposes terms and conditions on those corporations under the grant agreements in accordance with section 35 of the Act, in relation to receipt of the benefits under the Program. In particular, the Program provides funding to trading or financial corporations to assist them to increase the pipeline of post graduate students into Australia’s automotive engineering sector. Eligibility to receive funding under the Program is limited to businesses which are trading or financial corporations to which paragraph 51(xx) applies.
The express incidental power in paragraph 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in it by the Constitution. Together with the executive power in section 61 of the Constitution, the express incidental power extends to a range of matters, including the execution and maintenance of the Constitution, and the laws of the Commonwealth. Under the Legislative Instrument funding will assist universities that are Table A or Table B providers and are established under a law of the Commonwealth to increase the pipeline of post-graduate students into Australia’s automotive engineering sector and to leverage existing post-graduate programs towards automotive knowledge priorities.
Section 122 of the Constitution empowers the Parliament to ‘make laws for the government of any territory’. Under the Legislative Instrument funding may be provided to assist Territory universities which are Table A or Table B providers to increase the pipeline of post graduate students into Australia’s automotive engineering sector and to leverage existing post-graduate programs towards automotive knowledge priorities.
Authority
Section 33 of the Industry Research and Development Act 1986 provides authority for the Legislative Instrument.
Consultation
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department has been consulted on this Legislative Instrument.
Regulatory Impact
It is estimated that the regulatory burden is likely to be minor (OBPR reference number 22208).
Details of the Industry Research and Development (Automotive Engineering Graduate Program) Instrument 2018
PART 1 – PRELIMINARY
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Automotive Engineering Graduate Program) Instrument 2018.
Section 2 – Commencement
This section provides that the Legislative Instrument commences on the day after registration on the Federal Register of Legislation.
Section 3 – Authority
This section specifies the provision of the Industry, Research and Development Act 1986 (the Act) under which the Legislative Instrument is made.
Section 4 – Definitions
This item provides for definitions of terms used in the Legislative Instrument.
Section 5 – Prescribed Program
This section prescribes the Automotive Engineering Graduate Program (the Program) for the purposes of s 33 of the Act.
The Program provides funding to universities to deliver post graduate student stipends for projects in areas of knowledge priority for automotive engineering.
Section 6 – Specified Legislative Power
This section specifies that the legislative power in respect of which the Legislative Instrument is made is the power of the Parliament to make laws with respect to:
- Foreign corporations and trading or financial corporations formed within the limits of the Commonwealth (para 51(xx) of the Constitution)
- The activities undertaken in a territory (s 122 of the Constitution)
- Matters incidental to the executive power of the Commonwealth (para 51(xxxix) of the Constitution)
Section 7 – Eligibility Criteria
This section sets out the eligibility criteria relating to the Program for the purposes of subsection 33(4) of the Act. The eligibility criteria include that applicants must be higher education providers listed at Table A and Table B of the Higher Education Support Act 2003.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Automotive Engineering Graduate Program) Instrument 2018.
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
The purpose of the Automotive Engineering Graduate Program is to increase the pipeline of post graduate students into Australia’s automotive engineering sector and help automotive businesses to grow, improve productivity and be globally competitive. It will develop high quality graduate engineers with on the job experience and related skills that match future automotive skill requirements.
The program will achieve this by providing funding to universities to deliver post graduate student stipends for projects in areas of knowledge priority for automotive engineering.
The intended outcomes of the program are:
- A steady flow of qualified, job-ready automotive engineers into the sector
- Increased level of advanced skills in the automotive sector
- A stronger, more productive and more competitive automotive sector in Australia
Human rights implications
This Disallowable Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Disallowable Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Hon Karen Andrews MP
Minister for Industry, Science and Technology