EXPLANATORY STATEMENT
Issued by the authority of the Assistant Minister for Industry, Innovation and Science
Parliamentary Secretary to the Minister for Industry, Innovation and Science
Industry Research and Development Act 1986
Industry Research and Development (Incubator Support 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 (Incubator Support Program) Instrument 2017 (the Legislative Instrument) is to prescribe the Incubator Support Program (the Program). The Program was announced as part of the National Innovation and Science Agenda and is one of four elements of the Entrepreneurs’ Programme. As part of the 2017 Budget, the Australian Government announced that the Program would be refined to reflect the importance the Australian Government places on regional development. The Program provides $23 million in grant funding as part of supporting the Australian Government’s commitment to:
- assist Australian start-ups to develop the capabilities required to achieve commercial success in international markets and realise their economic potential faster than they otherwise would; and
- develop Australia’s innovation ecosystem including in regional areas.
The Program is included in the Portfolio Budget Statements 2017-18 https://industry.gov.au/AboutUs/Budget/Documents/PBS-2017-18.pdf under Section 1.3 – Measures announced since the 2016-17 Mid-Year Economic and Fiscal Outlook (page 18), ongoing funding is under Outcome One as part of the Entrepreneurs’ Programme.
The Program provides grant funding through two components – New and Existing Incubators, and Expert in Residence – to deliver Incubator Support projects. The maximum grant is 50 per cent of eligible project value for projects in major cities. The maximum grant is 65 per cent of eligible project value for projects in regional areas. The Program is currently funded to a maximum of $23 million until 2019/20.
The Program will be administered by the Department of Industry, Innovation and Science. Spending decisions will be made either by:
- the Minister for Industry, Innovation and Science, or
- the Program Delegate who is the AusIndustry General Manager responsible for administering the Program.
Spending decisions will be made in accordance with the assessment process set out in the Program guidelines available on the Department of Industry, Innovation and Science’s website at www.business.gov.au/assistance/incubator-support, and in accordance with the Commonwealth Grants Rules and Guidelines available at https://www.finance.gov.au/resource-management/grants/. The Minister and Program Delegate’s decisions will be final in all matters, including in relation to the approval of applications for funding, the size of funding to be awarded, and any conditions of funding.
Grants will be a minimum of $26,000 and a maximum of $500,000 per project for the New and Existing Incubators component. Grants will be a minimum of $5,000 and a maximum of $100,000 per project for the Expert in Residence component. The Program involves the allocation of finite resources (grants of up to $500,000 funded from a $23 million fund). External merits review will therefore not apply to decisions about the provision of grants under the Program.
For the New and Existing Incubators component, AusIndustry will assess applications against the eligibility criteria set out in the Program guidelines. Eligible applications will proceed to the merit assessment stage. Applications are assessed against the merit criteria and relative to other eligible applications and scored by an independent committee of the Innovation and Science Australia Board (ISA). The ISA committee may seek input from external advisors to inform their assessments.
To be competitive, applications must address all three merit criteria set out in the Program guidelines and include relevant supporting information. The amount of detail and supporting evidence should be relative to the project size, complexity and funding amount requested. Larger and more complex projects should include more detailed evidence.
After considering the applications, the ISA committee will make recommendations to the Minister on which applications are suitable for funding. For the New and Existing Incubators component, the Minister will make the final decision about which grants to approve, taking into consideration the ISA committee’s recommendations, and the availability of grant funds.
For the Expert in Residence component for grants of $50,000 or less, AusIndustry will assess applications against eligibility criteria only, and refer eligible applications to the Program Delegate to make the final decision. The Program Delegate will approve eligible applications up to the limit of the available grant funds.
For Expert in Residence grants greater than $50,000, applications must address a merit criterion in addition to the eligibility criteria. AusIndustry will assess these applications against eligibility criteria and the merit criterion and make recommendations to the Program Delegate. The Program Delegate will make the final decision about which grants to approve up to the limit of the available grant funds.
Grants under the Expert in Residence component will be a minimum of $5,000 and a maximum of $100,000.
For both components, unsuccessful applicants will be informed in writing and will have an opportunity to discuss the outcome with the Department, and can submit a new application for the same or similar project in future funding rounds. Applicants should include new or more information to address the weaknesses identified in their previous application.
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.
The Legislative Instrument specifies that the legislative power in respect of which it is made is the Commonwealth trade and commerce power (s51(i) of the Constitution). The trade and commerce power supports Commonwealth activities which relate to trade and commerce with other countries, and among the States. In that regard, the Program prescribed by the Legislative Instrument is aimed at fostering and facilitating the development of innovative start-ups to assist them to trade internationally, and increase their chances of success in international markets.
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 have been consulted on this Legislative Instrument.
Regulatory Impact
It is estimated that the Program will have minimal regulatory impact (OBPR reference number: 20028).
Details of the Industry Research and Development (Incubator Support Program) Instrument 2017
PART 1 – PRELIMINARY
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Incubator Support Program) Instrument 2017.
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 sets out the provision of the Industry, Research and Development Act 1986 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 Incubator Support (the Program) for the purposes of section 33 of the Act. The Program provides grant funding through two components to deliver Incubator Support projects, both of which require a funding contribution from applicants. These are:
- New and Existing Incubators
- Expert in Residence
Regional incubator facilitators are available to assist potential applicants, particularly in regional areas, to engage with the Program.
The Program’s intended outcomes are to:
- support new Australian incubators targeting innovative start-ups to assist them to trade internationally;
- expand the scale and operations of existing Australian incubators to increase innovative start-ups’ chances of success in international markets;
- develop new innovative Australian start-ups with a focus on international markets; and
- create opportunities for Australian start-ups to develop sustainable international businesses through access to open public data.
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 (s51(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 (Incubator Support 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 Incubator Support Program.
The Program provides $23 million in grant funding as part of supporting the Australian Government’s commitment to:
- assist Australian start-ups to develop the capabilities required to achieve commercial success in international markets and realise their economic potential faster than they otherwise would; and
- develop Australia’s innovation ecosystem including in regional areas.
The Program provides grant funding through two components – New and Existing Incubators, and Expert in Residence – to deliver Incubator Support projects.
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 Craig Laundy MP
Acting Minister for Industry, Innovation and Science
Parliamentary Secretary to the Minister for Industry, Innovation and Science