EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry and Science
Industry Research and Development Act 1986
Industry Research and Development (Costa Berry Distribution Centre Expansion Program) Instrument 2023
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 (Costa Berry Distribution Centre Expansion Program) Instrument 2023 (the Legislative Instrument) is to prescribe the Costa Berry Distribution Centre Expansion Program (the Program). Funding for the Program has been secured through the Department of Industry, Science and Resources’ (the Department’s) 2022-23 Budget. The Program provides $2.1 million across the 2022-23 and 2023-24 financial years to support CostaExchange Pty Ltd (ABN 41 002 687 961) (Costa) to expand the capacity of its berry distribution centre in East Devonport, Tasmania, as part of the “Local Industry Grants” package.
The Program will support Costa to double the capacity of its berry distribution centre to enable it to handle a greater volume of product. The expansion will in turn enable local berry growers to expand production to help secure ongoing supply.
Funding authorised by this Legislative Instrument comes from Program 1.2: Growing Innovative and Competitive Businesses, Industries and Regions, Outcome 1, as set out in the Portfolio Budget Statements 2022-23 Budget Related Paper No. 1.11, Industry, Science and Resources Portfolio (https://www.industry.gov.au/publications/october-budget-2022-23) at pages 16 and 39.
The Program will be delivered by AusIndustry, which is a specialised design, management and delivery body within the Department with extensive expertise and capability in delivering similar programs.
This Program provides $2.1 million through a one-off, non-competitive grant to Costa. The Program is administered by the Department in accordance with the Commonwealth Grant Rules and Guidelines 2017 (https://www.finance.gov.au/sites/default/files/2019-11/commonwealth-grants-rules-and-guidelines.pdf). As this is a one-off, non-competitive grant to an identified eligible recipient (which is a trading corporation), 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 Senior Executive Service 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.
As this is a one-off, non-competitive grant to an identified recipient 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 the decisions will relate to the provision of a one-off, non-competitive grant to a certain service provider over other service providers. 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/administrative-law/administrative-review-council-publications/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 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.
The Legislative Instrument specifies that the legislative power in respect of which the Instrument is made is the following:
Corporations power
Section 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 then 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 a single 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 Costa in the conduct of its ordinary activities (the growing, packing and marketing of fresh produce). The Program will impose terms and conditions 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.
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 with Costa on the activities necessary to complete the expansion of the berry distribution centre and the expected outcomes. 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 likely to be minor (the Office of Best Practice Regulation reference number 22-02761).
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 (Costa Berry Distribution Centre Expansion Program) Instrument 2023
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Costa Berry Distribution Centre Expansion Program) Instrument 2023.
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 section 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 a one-off grant to Costa to expand Costa’s berry distribution centre in East Devonport, Tasmania. The purpose of the Program is to support Costa to double the capacity of its berry distribution centre to enable a greater volume of product. The expansion will in turn enable local berry growers to expand production to help secure ongoing supply.
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 (paragraph 51(xx) 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 (Costa Berry Distribution Centre Expansion Program) Instrument 2023
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 Industry Research and Development (Costa Berry Distribution Centre Expansion Program) Instrument 2023 (the Legislative Instrument) provides legislative authority to commit Commonwealth funds for the Costa Berry Distribution Centre Expansion Program (the Program). The Program provides $2.1 million across the 2022-23 and 2023-24 financial years to CostaExchange Pty Ltd (ABN 41 002 687 961) (Costa) to support Costa to double the capacity of its berry distribution centre to handle a greater volume of product. The expansion will in turn enable local berry growers to expand production to help secure ongoing supply.
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 Ed Husic MP
Minister for Industry and Science