Industry Research and Development (Business Energy Advice Program) Instrument 2019

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Energy

Industry Research and Development Act 1986

Industry Research and Development (Business Energy Advice Program) Instrument 2019

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 Minister for Industry, Science and Technology has delegated the Minister’s power under subsection 33(1) to the Minister for Energy, under subsection 33(6) of the IR&D Act to prescribe the Business Energy Advice Program (the Program).

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 (Business Energy Advice Program) Instrument 2019 (the Legislative Instrument) is to prescribe the Business Energy Advice Program (the Program). The Program is a response to the Australian Competition and Consumer Commission Retail Electricity Pricing Inquiry – Final Report (“Restoring electricity affordability and Australia’s competitive advantage”), which recommended funding for small business organisations to provide tailored retail electricity market advice to other small businesses and to provide information, tools and advice on retail electricity choices. The Program will commit $11.7 million to assist small businesses to identify and implement energy efficiency measures, reduce their energy use and costs, and reduce emissions of greenhouse gases.

There are two components to the Program:

• An energy advisory service aimed at helping small businesses identify, manage and reduce their energy costs and greenhouse gas emissions. The Program provides funding to roll out partners to advise small business in relation to energy efficiency opportunities available to those businesses and to provide advice on how to switch energy providers by using internet tools and government websites. 
• An online energy benchmarking tool to help small businesses to compare their energy use and costs against similar businesses.

Funding authorised by this Legislative Instrument comes from the Action Plan to Reduce Power Prices that was announced in the 2018-19 Mid‑Year Economic and Fiscal Outlook as set out in the Portfolio Additional Estimates Statements 2018-19, Environment and Energy Portfolio, at page 36: http://www.environment.gov.au/about-us/publications/budget/portfolio-additional-estimates-statements-2018-19.

The Program will be administered by the Department of the Environment and Energy (the Department). The Department will engage roll out partner(s) for the Program’s energy advisory service to deliver targeted sector specific advice and information for small businesses.

The roll out partner(s) will be required to deliver, either themselves or their service providers, tailored energy efficiency advice and retail market advice, to a wide range of small business types and sectors. Small businesses of between six to twenty employees will be eligible to receive support.

The Department will also engage a provider to develop the energy benchmarking tool.

Procurement decisions relating to the selection of the roll out partner(s) and the development of the energy benchmarking tool will be made in accordance with the Commonwealth’s resource management framework, including the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Procurement Rules.

Procurement decisions, once made, will be final and not subject to merits review. Re-making a procurement decision after entry into contractual arrangements with a successful proponent is legally complex, impractical, and would delay the provision of support to small businesses.

Persons who are affected by procurement decisions have recourse to the Department. The Department will investigate such complaints. If a person is not satisfied with the way the Department handles the complaint, they may lodge a complaint with the Commonwealth Ombudsman.

Spending decisions in relation to the engagement of the roll out partner(s) and energy benchmark tool provider will be made by the relevant delegate under subsection 23(3) of the Public Governance, Performance and Accountability Act 2013.

The Program includes administered funding of $10 million over 3 years to procure roll out partner(s) to help small businesses understand their energy saving opportunities and provide advice on how to switch energy retailers. The Program also includes administered funding of $1.4 million to develop the energy benchmarking tool to help small businesses to compare their energy use and costs against similar businesses and $0.3 million of departmental funding.

The Program has finite resources which will be committed to support the roll out partner(s) in helping small businesses to identify, manage and reduce their energy costs and greenhouse gas emissions, and to develop the energy benchmarking tool. Therefore, external merits review does not apply to the Program.

The roll out partner(s) will be required to provide the energy advisory services over three years from 2018-19 to 2021-22 either itself or through sub-contractors.

Tenderers will be asked to demonstrate their ability to deliver to a range of small business types, and demonstrate the coverage of small business types and sectors that will be targeted by their roll out methodology.

Persons who have complaints about the Program will be able to submit their complaints to the Department. The Department will investigate any complaints about the Program in accordance with its complaints policy and procedures. As above, if a person is not satisfied with the way the Department handles the complaint, they may lodge a complaint with the Commonwealth Ombudsman about the Department’s handling of the complaints.

The Legislative Instrument specifies that the legislative power in respect of which it is made is the communications power (para 51(v) of the Constitution) and the external affairs power (para 51(xxix) of the Constitution).

Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to ‘external affairs’. The external affairs power supports Commonwealth legislation implementing Australia’s international obligations under treaties to which it is a party. The program will include measures that would assist Australia to meet its obligations under one or more of the following:

1. the United Nations Framework Convention on Climate Change [1994] ATS 2 (the UNFCCC), particularly Articles 4 and 6;
2. the Kyoto Protocol to the United Nations Framework Convention on Climate Change [2008] ATS 2, particularly Articles 3 and 10;
3. the Paris Agreement [2016] ATS 24, particularly Articles 4 and 12.

The UNFCCC includes a range of obligations on Australia to take domestic actions that reduce Australia’s emissions of greenhouse gases. 

The UNFCCC relevantly provides that Australia shall:

1.  formulate, implement, publish and regularly update national and, where appropriate, regional programs containing measures to mitigate climate change by addressing anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol, and measures to facilitate adequate adaptation to climate change (Article 4.1(b));
2. promote and cooperate in the development, application and diffusion of technologies, practices and processes that control, reduce or prevent anthropogenic emissions of greenhouse gases in all relevant sectors including energy, transport, industry, agriculture, forestry and waste management sectors (Article 4.1(c)); and
3.  adopt national policies and take corresponding measures on the mitigation of climate change, by limiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs (Article 4.2(a)).
4. promote and facilitate public access to information on climate change and its effects (Article 6).

The Kyoto Protocol to the UNFCCC also includes obligations on Australia to take action to reduce emissions, such as Articles 3 and 10(b). Article 3 imposes obligations to ensure that Australia’s greenhouse gas emissions during a commitment period do not exceed its assigned amount. Article 10(b) imposes obligations to formulate, implement and report upon climate change mitigation and adaptation programs.

The Paris Agreement was entered into by the parties to the UNFCCC to enhance its implementation.  Under the Paris Agreement, Australia has a ‘nationally determined contribution’ of a 2030 emissions reduction target of 26 to 28 per cent below 2005 levels. Relevantly, Article 4.2 of the Paris Agreement provides that ‘[e]ach Party shall prepare, communicate and maintain successive nationally determined contributions that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions’.  Article 12 includes an obligation to enhance climate change education, training, public awareness, public participation and public access to information.

The energy advisory service will provide advice related to reducing the energy use of small businesses. As small businesses take up opportunities to reduce their energy use, the reduced greenhouse gas emissions will assist in meeting Australia’s international obligations to reduce greenhouse gas emissions under the UNFCCC and ongoing obligations under the Kyoto Protocol and the Paris Agreement. Access to information on climate change mitigation will also assist meeting Australia’s obligations to provide information under Art 6 UNFCCC and Art 12 of the Paris Agreement.

Section 51(v) of the Constitution empowers the Parliament to make laws with respect to 'postal, telegraphic, telephonic and other like services'. Funding provided under the Legislative Instrument will assist small business to use communication services, including the internet, government websites, and the energy benchmarking tool, to identify and implement energy efficiency measures and reduce their energy use and costs. For example, websites such as the Australian Government’s Energy Made Easy website (https://www.energymadeeasy.gov.au/) are designed to be the primary way that energy offers can be compared for a particular location and usage profile. Service providers will help small businesses input the most accurate site specific information into these websites so that the best offers for that user can be determined. The new benchmarking tool will also be an important internet based resource for comparing energy use and costs against similar businesses.

Authority

Section 33 of the Industry Research and Development Act 1986 provides authority for the Legislative Instrument.

Consultation

In accordance with s 17 of the Legislation Act 2003, the Attorney-General’s Department and the Department of Industry, Innovation and Science have been consulted on this Legislative Instrument.

Regulatory Impact

The Program has been assessed by the Office of Best Practice Regulation (OBPR ID 24953) to have only a minor economic impact and minor regulatory costs. 

Details of the Industry Research and Development (Business Energy Advice Program) Instrument 2019

Section 1 – Name of Instrument

This section specifies the name of the Legislative Instrument as the Industry Research and Development (Business Energy Advice Program) Instrument 2019.

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 (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 Business Energy Advice Program for the purposes of section 33 of the IR&D Act.

The purpose of the Program set out in subsection 5(3) is to assist small businesses to identify and implement energy efficiency measures, reduce their energy use and costs and reduce emissions of greenhouse gases.

The Program provides funding to service providers to advise small businesses to identify, manage and reduce their energy costs. The Program will also fund the development of an online energy benchmarking tool that will assist small businesses to measure their energy efficiency performance against similar businesses. This is set out in subsection 5(2).

Section 6 – Specified Legislative Power

This section specifies that the legislative powers in respect of which the Legislative Instrument is made are the powers of the Parliament to make laws with respect to ‘postal, telegraphic, telephonic and other like services’ (within the meaning of paragraph 51(v) of the Constitution) and ‘external affairs’ (within the meaning of paragraph 51(xxix) of the Constitution), respectively.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Industry Research and Development (Business Energy Advice Program) Instrument 2019

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

This instrument provides legislative authority to commit Commonwealth funds for the Business Energy Advice Program.

The policy objective of the Program is to help reduce small businesses’ energy use and costs, improve energy efficiency and reduce greenhouse gas emissions.

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

The Hon Angus Taylor MP

Minister for Energy