EXPLANATORY STATEMENT
Issued by the authority of the Assistant Minister for Regional Development and Territories and Parliamentary Secretary to the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development
Industry Research and Development Act 1986
Industry Research and Development (Hinkler Regional Deal Agricultural Technology Facility Program) Instrument 2020
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 Assistant Minister for Regional Development and Territories and Parliamentary Secretary to the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development, under subsection 33(6) of the IR&D Act to prescribe the Hinkler Regional Deal Agricultural Technology Facility 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 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 (Hinkler Regional Deal Agricultural Technology Facility Program) Instrument 2020 (the Legislative Instrument) is to prescribe the Hinkler Regional Deal Agricultural Technology Facility Program (the Program). The funding for the Program has been secured through the Department of Infrastructure, Transport, Regional Development and Communications 2019-20 Budget. The Program provides for a grant of up to $5 million as part of the Australian Government’s commitment to the Hinkler Regional Deal. The purpose of the Program is to support the long-term economic development and resilience of the agricultural sector in the Bundaberg local government area and the surrounding region through innovative technology and research.
Funding is to be made available to Central Queensland University (eligible applicant), subject to an assessment under the Commonwealth Grants Rules and Guidelines 2017, to establish an agricultural technology facility in the Bundaberg local government area, and for such a facility to undertake activities including conducting academic research, gathering data, supporting commercial innovation, and applying technological and other methods to improve agricultural productivity for farms in the area.
Funding authorised by this Legislative Instrument comes from Department of Infrastructure, Transport, Regional Development and Communications, Program 3.1: Regional Development, Outcome 3: Strengthening the sustainability, capacity and diversity of our cities and regional economies including through facilitating local partnerships between levels of government and local communities; through reforms that stimulate economic growth; and providing grants and financial assistance. Details are set out in the Portfolio Budget Statements 2019-20, Budget Related Paper No. 1.16, Treasury Portfolio (https://treasury.gov.au/sites/default/files/2019-04/pbs_2019-20_combined.pdf) at page 34, as amended by Portfolio Additional Estimates Statements 2019-20, Infrastructure, Transport, Regional Development and Communications Portfolio (https://www.infrastructure.gov.au/department/statements/2019_2020/paes/files/PAES1920.pdf ) at page 23.
The Program is administered by the Department of Infrastructure, Transport, Regional Development and Communications (the Department), and will be delivered by the Department of Industry, Science, Energy and Resources’ Business Grants Hub (AusIndustry), which is a specialised design, management and delivery body with extensive expertise and capability in delivering similar programs.
The Program is an ad hoc grants program. The Program is administered by the Department 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 merit criteria are outlined in the Program guidelines provided to the eligible applicant.
The eligible applicant will be invited to apply by AusIndustry. The application must address the eligibility and merit criteria and provide relevant supporting information. The amount of detail and supporting evidence will be relative to the project size, complexity and funding amount requested.
Spending decisions will be made by the Program Delegate who is the AusIndustry General Manager responsible for administering the Program, taking into account the recommendations of an assessment by an AusIndustry officer against the Program guidelines. The Program Delegate will make the final decision to approve any grant, taking into consideration the assessment by the AusIndustry officer, and the availability of grant funds. The Program Delegate will not approve funding if there are insufficient Program funds available across relevant financial years for the Program.
If successful, the applicant will receive a written offer, including any specific conditions attached to the grant. If unsuccessful, the applicant with have the opportunity to discuss the outcome with the Department, and can submit a new application. Where this occurs, the applicant will be required to include new or more information to address the weaknesses identified in the previous application.
One grant will be provided up to the amount of $5 million, to be paid in two instalments. The final funding amount will be dependent on an assessment of eligible expenses against the Program guidelines.
As this is a targeted ad-hoc grant, the Program will not be subject to merits review.
Persons who are otherwise affected by decisions or who have complaints about the Program will also have recourse to AusIndustry and/or the Department. AusIndustry and the Department investigates any complaints about the Program in accordance with the respective agency’s complaints policy and procedures. If a person is not satisfied with the way AusIndustry and/or 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 subsection 51(xx) of the Constitution (the 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 516 (Williams No 2) the High Court, considering section 32B of the Financial Management and Accountability Act 1997 (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 s 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.
In that regard, the Program prescribed by the Legislative Instrument singles out and confers on Central Queensland University (which is a trading corporation) benefits which are directed to assisting it in the conduct of its ordinary activities, and imposes terms and conditions on it under the grant agreement in accordance with s 35 of the Act, in relation to receipt of the benefits under the Program. In particular, the Program provides funding to assist it to undertake academic research into the application of agricultural technology, gather data from the area to inform research and development, support commercial innovation in the area, and apply technological and other methods to improve agricultural productivity. The eligible applicant has statutory functions including to provide facilities for and undertake research, advance knowledge and its application to government, industry, commerce and the community, disseminate knowledge, and apply knowledge for the applicant’s commercial benefit. As part of its ordinary activities, the eligible applicant operates the Institute for Future Farming Systems. The institute’s purpose is to drive the delivery of new agricultural innovations and provide an environment for practical, skills-based training and research-led teaching. The activities under the Program align with these ordinary activities.
Eligibility to receive funding under the Program is limited to a business that is a trading or financial corporation to which s51(xx) of the Constitution applies.
Background
The Program forms part of the Australian Government’s Hinkler Regional Deal which is one of three pilot Regional Deals across Australia based on the City Deals model. The Hinkler Regional Deal is a five year, over $260 million commitment to the Bundaberg and Hervey Bay region and their surrounds.
Authority
Section 33 of the Industry Research and Development Act 1986 provides authority for the making of the Legislative Instrument, including by a delegate.
Consultation
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department and the Department of Industry, Science, Energy and Resources have been consulted on this Legislative Instrument.
Regulatory Impact
It is estimated that the regulatory burden is likely to be minor. The OBPR has assessed this proposal as not likely to have a regulatory impact on business, community organisations or individuals (OBPR: 26466)
Details of the Industry Research and Development (Hinkler Regional Deal Agricultural Technology Facility Program) Instrument 2020
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Hinkler Regional Deal Agricultural Technology Facility Program) Instrument 2020.
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 (the 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 Hinkler Regional Deal Agricultural Technology Facility Program (the Program) for the purposes of s 33 of the Act.
The Program provides for a grant of up to $5 million in funding to Central Queensland University, subject to an assessment under the Commonwealth Grants Rules and Guidelines 2017, to establish an agricultural technology facility in the Bundaberg local government area, and for such a facility to undertake activities including conducting academic research, gathering data, supporting commercial innovation, and applying technological and other methods to improve agricultural productivity for farms in the area and the surrounding region.
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 (para 51(xx) 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 (Hinkler Regional Deal Agricultural Technology Facility Program) Instrument 2020
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 Program provides for a grant of up to $5 million to Central Queensland University as part of the Australian Government’s commitment to the Hinkler Regional Deal. The Program will:
- support the long-term economic development and resilience of the agricultural sector in the Bundaberg local government area and the surrounding region through innovative technology and research;
- improve agricultural productivity through the application of technological and other methods;
- support commercial innovation in area and the surrounding region; and
- gather and disseminate data and academic research.
Human rights implications
This Legislative Instrument positively engages the right to an adequate standard of living, including food, water and housing, and the right to education. The Program will support the productivity of the agricultural sector through Ag-Tech research, development and implementation to help ensure the sustainability and quality of domestic food supply. Furthermore, the Program supports higher education in the region by facilitating data gathering, analysis and academic research into agriculture.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
The Hon Nola Marino MP
Assistant Minister for Regional Development and Territories
Parliamentary Secretary to the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development