EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry and Innovation
Industry Research and Development Act 1986
Industry Research and Development (Boyer Paper Mill Program) Instrument 2025
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 section 33 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 section 33, 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 Commonwealth entity, or by their delegate (under section 36).
The purpose of the Industry Research and Development (Boyer Paper Mill Program) Instrument 2025 (the Legislative Instrument) is to prescribe the Boyer Paper Mill Program (the Program). Funding for the Program has been secured through the Department of Industry, Science and Resources (Department) 2025-2026 MYEFO. The Program provides $24.0 million as part of the Australian Government’s commitment to Boyer Paper Mill in Tasmania, announced in Labor's costed plan to Build Australia's Future on 28 April 2025. The program will support the Boyer Paper Mill (Boyer) to transition away from coal-fired thermal power generation to renewable energy, following a 2023-2024 feasibility study for the replacement of a coal-fired boiler at the Plant.
The Program will be delivered by the Business Grants Hub, which is a specialised design, management and delivery body within the Department with extensive expertise and capability in delivering similar programs.
The Program is a closed non-competitive grant program to Boyer. The Program is administered by the Department in accordance with the Commonwealth Grant Rules and Principles 2024 (https://www.legislation.gov.au/F2024L00854/latest/versions). As this is a closed, non-competitive grant to the identified eligible recipient, there are no selection criteria; however, the grant is contingent on the submission of an acceptable project proposal with sufficient relevant supporting information commensurate with the funding amount. This is subject to assessment of merit in accordance with the Grant Opportunity Guidelines, including but not limited to consideration of value for money, ability of project to deliver intended outcomes, and associated risk. To be successful the application must demonstrate merit in each of these areas.
Spending decisions will be made by the Program Delegate who is the General Manager responsible for administering the Program, taking into account the recommendations of the Department. The Program Delegate is a SES officer who holds delegation under the Department’s general financial framework, including delegation under the Public Governance, Performance and Accountability Act 2013, and sections 34 and 35 of the IR&D Act.
The Grants will provide up to $24 million funding from 2025-26.
As this is a closed, non-competitive grant that supports the implementation of policy decisions made by the Government, the Program will not be subject to merits review. Merits review of the Program would not be appropriate because decisions will relate to the provision of ad-hoc grants to a certain service provider. The Administrative Review Council has recognised that decisions of this nature should be excluded from merits review (see paragraphs 4.16 to 4.19 of What decisions should be subject to merits review? available at https://www.ag.gov.au/legal-system/publications/arc-what-decisions-should-be-subject-merit-review-1999).
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.
Statement of the Relevance and Operation of Constitutional Heads of Power
For the purposes of subsection 33(3) of the IR&D Act, the Legislative Instrument specifies that the legislative powers in respect of which the Instrument is made are as follows:
- the corporations power in paragraph 51(xx) of the Constitution, and
- the external affairs power in paragraph 51(xxix) of the Constitution.
Corporations power
Paragraph 51(xx) of the Constitution empowers the Parliament to make laws with respect to ‘foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’ (together, constitutional corporations).
In Williams v Commonwealth (2014) 252 CLR 416 (Williams No 2), the High Court, considering section 32B of the Financial Management and Accountability Act 1997 (the FMA Act), held (at [50]) that:
A law which gives the Commonwealth the authority to make an agreement or payment of that kind is not a law with respect to trading or financial corporations. The law makes no provision regulating or permitting any act by or on behalf of any corporation.
However, the relevant provisions of the IR&D Act are substantially different to the provisions considered by the High Court in Williams No 2. Section 34 of the IR&D Act corresponds to section 32B of the FMA Act considered by the High Court in Williams No 2. However, the FMA Act contained no provision in terms equivalent to those of section 35 of the IR&D Act.
Subsection 35(2) of the IR&D Act limits the arrangements made under section 34 so that, where a party to an arrangement made under section 34 is a constitutional corporation, the arrangement must be subject to a written agreement containing terms and conditions under which money is payable by the Commonwealth. The corporation must comply with the terms and conditions. The activities of the corporation are therefore regulated through the terms and conditions made under each agreement pursuant to subsection 35(2).
Further, subsection 35(3) provides that the agreement must provide for circumstances in which the corporation must repay amounts to the Commonwealth.
Only Boyer, a constitutional corporation, will be eligible to receive benefits under the Program prescribed by the Legislative Instrument. The benefits conferred by the Program will be directed to assisting that corporation in the conduct of its ordinary activities (production of publication grade paper). The Program will impose terms and conditions on Boyer under a grant agreement in accordance with section 35 of the IR&D Act, in relation to receipt of benefits under the Program. The terms and conditions will set out what the funding may be used for, and the circumstances in which it must be repaid.
External affairs power
Paragraph 51(xxix) of the Constitution empowers the Commonwealth Parliament to make laws with respect to ‘external affairs’. The external affairs power supports legislation implementing Australia’s international obligations under treaties to which it is a party. Australia has obligations relevant to this Legislative Instrument under the following treaties:
- the Kyoto Protocol to the United Nations Framework Convention on Climate Change done at Kyoto on 11 December 1997 ([2008] ATS 2) (Kyoto Protocol), particularly Article 10;
- the Paris Agreement done at Paris on 12 December 2015 ([2016] ATS 24) (Paris Agreement), particularly Article 4; and
- the United Nations Framework Convention on Climate Change done at New York on 9 May 1992 ([1994] ATS 2) (UNFCCC), particularly Article 4.
Article 10(b) of the Kyoto Protocol requires Parties to implement national and regional programmes containing measures to mitigate climate change, including measures relating to the abatement of increases in greenhouse gas emissions, which may concern the energy, transport and industry sectors. Article 4(2) of the Paris Agreement obliges Parties to take domestic measures ‘with the aim of achieving the objectives’ of a nationally determined contribution. Australia’s Nationally Determined Contribution is to reduce greenhouse gas emissions to 43% below 2005 levels by 2030, and to produce net zero emissions by 2050. Under Article 4(19) of the Paris Agreement, Australia is also obliged to ‘strive to formulate and communicate long-term low greenhouse gas emission development strategies’.
Article 4(1)(b) of the UNFCCC requires Parties to formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to mitigate climate change by addressing anthropogenic emissions. Article 4(2)(a) requires developed country Parties to commit themselves to adopt national policies and take measures on the mitigation of climate change.
Funding provided under the Legislative Instrument will provide support for the ongoing sustainability of Boyer as it transitions from coal-fired power generation to renewable energy.
Further details of the Legislative Instrument are set out at Attachment A.
Authority
Section 33 of the IR&D Act provides authority for the Legislative Instrument.
Consultation
The Department consulted Boyer Paper Mill Limited on the outcomes expected from the Program and the activities necessary to be undertaken. Boyer gave a breakdown of the intended use of the Grant money. This consultation informed the design of the Program.
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 nil (Office of Impact Analysis number ref OIA25-09548).
Statement of Compatibility with Human Rights
A Statement of Compatibility with Human Rights for the purposes of Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 is set out at Attachment B.
Attachment A
Details of the Industry Research and Development (Boyer Paper Mill Program) Instrument 2025
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Boyer Paper Mill Program) Instrument 2025.
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 IR&D 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 Program for the purposes of section 33 of the IR&D Act.
The Program provides funding to enable Boyer Paper Mill Limited to transition away from coal-fired thermal power generation to renewable energy, diversify its product range and assure local supply chains and jobs.
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 the corporations power (paragraph 51(xx) of the Constitution) and the external affairs power (paragraph 51(xxix) of the Constitution).
Attachment B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Boyer Paper Mill Program) Instrument 2025
This 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 Legislative Instrument provides legislative authority to commit Commonwealth funding for the Boyer Paper Mill Program (the Program). The Program will provide up to $24 million from 2025-26 for Boyer Paper Mill to transition away from coal-fired thermal power generation to renewable energy, diversify its product range and assure local supply chains and jobs.
Human rights implications
The Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
The Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Senator the Hon Tim Ayres
Minister for Industry and Innovation