EXPLANATORY STATEMENT
Issued by the authority of the Minister for Energy
Industry Research and Development Act 1986
Industry Research and Development (CopperString (Power Transmission) 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 for Industry, Science and Technology 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 her power under subsection 33(1) to prescribe the CopperString (Power Transmission) Program to the Minister for Energy (under subsection 33(6)).
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 entity, or by their delegate (under section 36).
Subsection 35(2) of the IR&D Act limits the arrangements made under section 34 so that, where a party to an arrangement under section 34 is a corporation to which section 51(xx) of the Constitution applies, the arrangement must be subject to a written agreement containing terms and conditions under which money is payable by the Commonwealth, and the corporation must comply with the terms and conditions.
The purpose of the Industry Research and Development (CopperString (Power Transmission) Program) Instrument 2019 (the Legislative Instrument) is to prescribe the CopperString (Power Transmission) Program (the Program). The Program will provide funding of $4.7 million as part of the Australian Government’s commitment to reducing electricity costs, stimulating new investment and improving electricity transmission infrastructure in Queensland’s North West Minerals Province. In particular, the Program is designed to support the development of the CopperString 2.0 project, which involves the construction of an electricity transmission line between Mt Isa and Hughenden.
Funding for the Program has been secured through the Department of the Environment and Energy 2018-19 Portfolio Additional Estimates process and comes from Program 4.1, Outcome 4: Support the reliable, sustainable and secure operations of energy markets through improving Australia’s energy efficiency, performance and productivity for the community, as set out in the Portfolio Additional Estimates Statements 2018-19, Environment and Energy Portfolio [http://www.environment.gov.au/about-us/publications/budget/portfolio-additional-estimates-statements-2018-19] at page 14.
The Program will be delivered by the Department of Industry, Innovation and Science’s Business Grants Hub, on behalf of the Department of the Environment and Energy. The Business Grants Hub is a specialised design, management and delivery body with extensive expertise and capability in delivering similar programs.
The Program will be administered 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 assessment criteria will be outlined in the grant opportunity guidelines.
Spending decisions will be made by the Minister for Energy, taking into account the recommendations of the Department of the Environment and Energy.
The Program will not be subject to external merits review as it involves the allocation of finite resources and supports the implementation of policy decisions made by government about the delivery of the Program.
Both successful and unsuccessful applicants under the Program will be informed in writing. Unsuccessful applicants have an opportunity to discuss the outcome with the Department of the Environment and Energy.
Persons who are otherwise affected by decisions or who have complaints about the Program will also have recourse to the Department of the Environment and Energy. 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.
Trade and commerce power
The Legislative Instrument specifies that the legislative power in respect of which the instrument is made is the Commonwealth trade and commerce power (section 51(i) of the Constitution). Section 51(i) of the Constitution empowers the Parliament to make laws with respect to ‘trade and commerce with other countries, and among the States’.
The Program prescribed by the Legislative Instrument is aimed at supporting the construction of an electricity transmission line between Mt Isa and Hughenden, in northern Queensland. The construction of this line will connect Mt Isa to the national electricity grid. The national electricity grid is an interconnected system of transmission and distribution lines connecting electricity generators and consumers in New South Wales, Victoria, Queensland, South Australia, Tasmania and the Australian Capital Territory. Connecting Mt Isa to the grid will facilitate interstate trade in electricity, by enabling consumers in Mt Isa to purchase electricity from the national electricity market (the wholesale exchange operated and administered by the Australian Energy Market Operator under the National Electricity Law), rather than just from local generators. Local generators will also be able to sell electricity to the national market, rather than just local consumers.
Connecting Mt Isa to the grid is also intended to improve the international competitiveness of mining and mineral processing export industries located in the Mt Isa region, by enabling those industries to purchase lower cost electricity from the national electricity market.
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 and the Department of Industry, Innovation and Science have been consulted on this Legislative Instrument.
Regulatory Impact
It is estimated that the regulatory burden is likely to be minor (OBPR reference number 25024).
Details of the Industry Research and Development (CopperString (Power Transmission) Program) Instrument 2019
Section 1 – Name
This section specifies that the name of the Legislative Instrument is the Industry Research and Development (CopperString (Power Transmission) Program) Instrument 2019.
Section 2 – Commencement
This section provides that the Legislative Instrument commences on the day on which it is made.
Subsection 12(2) of the Legislation Act 2003 provides that a provision of a legislative instrument does not apply in relation to a person (other than the Commonwealth or an authority of the Commonwealth) if the provision commences before the day the instrument is registered, to the extent that as a result: (a) the person’s rights as at the day would be affected so as to disadvantage the person; or (b) liabilities would be imposed on the person in respect of anything done or omitted to be done before that day. Subsection 12(3) provides that, subject to subsection (2), a legislative instrument may provide that a provision of the instrument commences before the day the instrument is registered. Subsection 12(4) provides that the effect of these subsections is subject to any contrary provision in an Act.
Commencing the Legislative Instrument on the day on which it is made does not adversely affect any person’s rights or result in the imposition of any liabilities on any person. Nor is it inconsistent with any Act. Rights will only be affected, and liabilities will only be imposed, if an arrangement is made under section 34 of the Industry Research and Development Act 1986 (the IR&D Act), and that arrangement creates those rights and liabilities. No arrangement will commence for this purpose before the enactment of Appropriation Bill (No. 3) 2018-2019 (which contains the appropriation for the CopperString (Power Transmission) Program).
Section 3 – Authority
This section specifies that the Legislative Instrument is made under section 33 of the IR&D Act.
Section 4 – Definitions
This section provides for definitions of terms used in the Legislative Instrument.
Section 5 – Prescribed program
This section prescribes the CopperString (Power Transmission) Program for the purposes of subsection 33(1) of the IR&D Act.
The purpose of the Program is to provide funding to support the development costs of the construction of an electricity transmission line between Mt Isa and Hughenden in Queensland (the CopperString 2.0 project).
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 trade and commerce with other countries, and among the States (section 51(i) of the Constitution).
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (CopperString (Power Transmission) 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
The Legislative Instrument prescribes the CopperString (Power Transmission) Program for the purposes of subsection 33(1) of the Industry Research and Development Act 1986. Section 34 of that Act authorises the Commonwealth to enter into arrangements for funding to be provided under prescribed programs.
The purpose of the Program is to support the construction of an electricity transmission line between Mt Isa and Hughenden, in northern Queensland. The construction of this line will connect Mt Isa to the national electricity grid. Connecting Mt Isa to the grid will enable consumers in Mt Isa to purchase electricity from the national electricity market, rather than just from local generators, and local generators to sell electricity to the national market, rather than just local consumers. Connecting Mt Isa to the grid is also intended to improve the international competitiveness of export industries located in the Mt Isa region, by enabling those industries to purchase lower cost electricity from the national electricity market.
Human rights implications
This Legislative Instrument may engage the right of women in rural areas to enjoy adequate living conditions, particularly in relation to electricity (Article 14.2(h) of the Convention on the Elimination of all forms of Discrimination Against Women).
Connecting Mt Isa to the national electricity grid is expected to place downward pressure on electricity prices in the Mt Isa region, particularly for industries located in that region (which may be able to purchase lower cost electricity from the national electricity market) but also, potentially, for residential customers, including women (by facilitating increased competition in energy supply in the region). Accordingly, to the extent this right is engaged, it is promoted by this Legislative Instrument.
Conclusion
This Legislative Instrument is compatible with human rights because, to the extent it engages human rights, it promotes the protection of those rights.
The Hon Angus Taylor MP
Minister for Energy