EXPLANATORY STATEMENT
Issued by the authority of the Minister for Employment for the Minister for Industry, Innovation and Science
Industry Research and Development Act 1986
Industry Research and Development (Cooperative Research Centres Projects Program) Instrument 2017
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 (Cooperative Research Centres Projects Program) Instrument 2017 (the Instrument) is to prescribe the Cooperative Research Centre Projects Program (the Program). The Program is incorporated in the Department of Industry, Innovation and Science Portfolio Budget Statements 2017-18 under the contributing component Cooperative Research Centres (CRCs) Programme, of Sub-programme 1.2: Business research, development and commercialisation. This Sub-programme is designed to provide incentives for business research, development and commercialisation to drive innovation and thus contribute to improved productivity.
The Government released the independent CRC Programme Review report, Growth through Innovation and Collaboration, on 19 May 2015 and announced it would implement all 18 recommendations. The review recommended the programme be refocussed and targeted to solve industry problems and deliver outcomes for industry through industry-led research. The review also recommended that smaller-scale and shorter-term research projects (referred to as CRC Ps in that review) be introduced as a mechanism to increase Small and Medium Enterprise (SME) participation in industry‑research collaboration.
The Legislative Instrument ensures industry leadership and facilitates SME participation in the CRC Programme for smaller-scale and shorter-term industry‑research collaborations. The Legislative Instrument is reflective of the ongoing Program (and broader CRC Programme) objectives and policy intent.
Funding decisions made under the Program will not be subject to external merits review. Merits review would not be appropriate within the context of the Program, as funding decisions involve the allocation of finite resources, and overturning an original funding decision could affect an allocation to another party. The Program is subject to a robust and extensive assessment process, an enquiry and feedback process, and an existing complaints mechanism for affected applicants.
Funding for the Program is provided under the broader Cooperative Research Centres (CRC) Program. The CRC Program provides funding of $710 million over the forward estimates to support:
- CRC grants (which are supported by item 418.004 of Schedule 1AA of the Financial Framework (Supplementary Powers) Regulations 1997, and for which there is no maximum value, but which are typically $30-50 million); and
- grants for CRC Projects (which are supported by the Instrument, and which may be up to a maximum of $3 million).
There is no specified annual amount allocated to each of these two funding streams. The number of CRC grants and grants for CRC Projects that will be funded in each selection round will depend on the number of applications received, the relative merits of applications, the amount of available funding and the need to ensure sufficient funding is available for future selection rounds.
Program funding will be provided through a competitive, merit based process in accordance with the Commonwealth Grants Rules and Guidelines (https://www.finance.gov.au/sites/default/files/commonwealth-grants-rules-and-guidelines.pdf) and the Cooperative Research Centres Projects Guidelines (the Program Guidelines, https://www.business.gov.au/CRC-P).
To be eligible to receive funding, applicants must meet the eligibility criteria and rank competitively on the selection criteria against all other compliant applications. The selection criteria are set out in section 12 of the instrument and further guidance is outlined in the Program Guidelines.
At first instance, applications are assessed by the Department of Industry, Innovation and Science (the department) against the eligibility criteria, with the program delegate determining each application’s compliance with the eligibility criteria.
Following this, the merit selection process outlined in section 13 of the instrument applies. Innovation and Science Australia (the Board) considers eligible applications against each of the six selection criteria. To be competitive, applications must score highly against each selection criterion.
After considering the applications, the Board makes recommendations to the Minister on: which projects are suitable for funding; the national benefits to be delivered through funding the projects; the level of program funding proposed for each project; and any conditions that should apply to any offers of funding.
The Minister makes the final decision about which grants to approve and the level of funding for each project, taking into consideration the Board’s recommendations, and the availability of grant funds. Funding will not be approved if there are insufficient Program funds available across relevant financial years for the Program.
Both successful and unsuccessful applicants are informed in writing. Unsuccessful applicants are provided feedback and may request an opportunity to discuss the outcome with the department. Unsuccessful applicants can submit a new application for the same or similar project in future funding rounds if weaknesses identified in their previous application are addressed.
Persons who are otherwise affected by decisions or who have complaints about the Program also have recourse to the department. The department will investigate 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.
Authority
Section 33 of the Industry Research and Development Act 1986 provides authority for the Instrument.
Consultation
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department and the Department of Finance have been consulted on this Legislative Instrument.
Regulatory Impact
It is estimated that the Program will not change regulatory burden. (OBPR reference ID 19942).
Details of the Industry Research and Development (Cooperative Research Centres Projects Program) Instrument 2017
Section 1 – Name
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Cooperative Research Centres Projects Program) Instrument 2017.
Section 2 – Commencement
This section provides that the Legislative Instrument commenced 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 section provides for definitions of terms used in the Legislative Instrument.
Section 5 – Prescribed program
This section prescribes the Cooperative Research Centres Projects Program (the Program) for the purposes of section 33 of the Act.
Section 6 – Specified legislative power
This section specifies the legislative powers in respect of which the Instrument is made are the powers of the Parliament to make laws with respect to the following provisions of the Constitution:
(a) trade and commerce with other countries, and among the States (s 51(i));
(b) trading or financial corporations formed within the limits of the Commonwealth (s 51(xx));
(c) the provision of benefits to students (within the meaning of paragraph 51(xxiiiA));
(d) the implied nationhood power.
With respect to trade and commerce, the Program seeks to foster and encourage targeted Australian industries to engage in interstate and overseas trade and commerce and to encourage growth of such Australian industry. It does this by assisting industry participants to work with research organisations to develop new products and services that will increase the industry participants’ capacity to engage in interstate and international trade.
With respect to corporations, the Program singles out and confers on some constitutional corporations (namely, trading and 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 funding agreements in accordance with section 35 of Act, in relation to receipt of the benefits under the Program.
With respect to benefits to students, the Program will provide fellowships, scholarships, stipends and other direct material support to students who are enrolled in formal training programmes.
With respect to the implied nationhood power, the Program will provide for the funding of research into matters of national importance. Specifically, the Program will have a national focus that involves research and collaboration across Australia. Depending upon the Commonwealth’s priorities, the Program could provide information on issues of broad national significance such as improving the competitiveness, productivity and sustainability of Australian industries, especially where Australia has a competitive strength, and one of the selection criteria is that an application for funding must show some national benefit.
Section 7 – Description of program
This section describes the types of activities that may be funded by the Program, including activities relating to research, such as:
(a) significant research into matters of significance to the nation, including research into science and research priorities and about matters of importance for the development of growth sectors;
(b) research that will directly contribute to the development of products and services that will be produced for interstate or overseas trade only, or will be predominantly traded interstate or overseas;
(c) publication of the research and deployment and take‑up of research outputs;
(d) for applicants that are trading or financial corporations to which paragraph 51(xx) of the Constitution applies—assistance in the conduct of the applicants’ ordinary activities;
(e) scholarships, fellowships and stipends for students enrolled in formal education or training programs, and other associated education or training costs for those students;
(f) developing and implementing strategies that will directly contribute to the capacity of enterprises to engage in overseas and interstate trade and commerce.
Section 8 – Purpose of program
This section describes the purposes of the Program, including:
(a) to improve the competitiveness, productivity and sustainability of Australian industries, especially where Australia has a competitive strength, and in line with government priorities;
(b) to foster high‑quality research to solve industry‑identified problems through industry‑led and outcome‑focused collaborative research partnerships between industry entities and research organisations;
(c) to encourage and facilitate the participation of SMEs in collaborative research.
Section 9 - Eligibility criteria relating to program
This section specifies the eligibility criteria relating to the Program.
Section 10 – Process for making applications in relation to program
This section sets out the process for making applications in relation to the Program, provides that other information for applicants will be available on the http://business.gov.au website during each selection round and for applications to be assessed fairly against the eligibility and selection criteria.
Section 11 – Application requirements
This section provides for the Program delegate to determine whether or not an application is compliant and to refuse applications that are essentially the same as a previously unsuccessful application.
This section also provides the program delegate a discretion to seek additional information from applicants, allow applicants to rectify minor errors in an application and for the program delegate to accept late applications for funding.
This section also notes that the Criminal Code Act 1995 applies to false or misleading information included in applications under the Program.
Section 12 – Selection Criteria
This section sets out the selection criteria applied to applications in relation to the Program and notes that additional information about these criteria may be set out on the http://business.gov.au website.
Section 13 – Selection process
This section sets out the selection process the Board of Innovation and Science Australia (continued in existence by section 6 of the IR&D Act) (the Board) will follow in considering applications under the Program.
Subsection 13(1) provides that compliant applications must be considered on merit and on a competitive level with other compliant applications.
Subsection 13(2) provides that the Board may seek expert advice from industry (including growth centres), government and the research sector on any aspect of applications under the Program.
Subsection 13(3) provides that the Board must consider submitted material, expert advice and any other relevant matters, before making recommendations to the Minister based on the selection criteria, government priorities, all other compliant applications and any other relevant matters. This subsection also specifies that weightings may be given to certain aspects of the selection criteria in the assessment and selection process.
Subsection 13(4) provides that the Board must advise the Minister of the outcome of the Board’s assessment and make recommendations about which projects are suitable for funding, the national benefits to be delivered through funding the projects, the suggested level of funding for each project and any suggested conditions applicable to funding.
Subsection 13(5) provides the matters the Minister must decide. These decisions are which projects are suitable for Program funding, the level of Program funding for each project and the terms and conditions (if any) of any offer of Program funding.
Subsection 13(6) provides the matters the Minister must take into account in making decisions under subsection 13(5). These matters are the description and purpose of the Program, the advice of the Board and any other relevant matters, including the application and related documentation.
Section 14 - Notification and announcement of Minister’s decision
This section provides the manner of notification to applicants (successful and unsuccessful) and to the public more generally of Program funding decisions.
This section also notes that the Department must also report the details regarding grants of Program funding on its website in accordance with the requirements of the Commonwealth Grants Rules and Guidelines.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Cooperative Research Centre Projects Program) Instrument 2017
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 Cooperative Research Centre Projects Program.
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 Minister for Employment for the Minister for Industry, Innovation and Science, Senator the Hon Michaelia Cash