EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry, Science and Technology
Industry Research and Development Act 1986
Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Amendment 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 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 s 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 s 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 s 36).
The Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Instrument 2018 (the 2018 Instrument) prescribed the Industry 4.0 Testlabs for Australia Program (the Program) to establish five Industry 4.0 Testlabs at five Australian universities, namely University of Queensland, University of Technology Sydney, University of South Australia, University of Western Australia and Swinburne University of Technology. The Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Amendment Instrument 2019 (the Amendment Instrument) amends that Program to establish an additional Industry 4.0 Testlab at the University of Tasmania. The funding for the Program was secured through the Department of Industry, Innovation and Science (the Department) 2017-18 Additional Estimates Statements for a period of one year (2018-19).
Authority
Section 33 of the Industry Research and Development Act 1986 provides authority for the Legislative Instrument.
In Williams v Commonwealth (2014) 252 CLR 416 (Williams No 2), the High Court, considering s 32B of the 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 Industry Research and Development Act 1986 (IRD Act) are substantially different to the provisions considered by the High Court in Williams No 2. Section 34 of the IRD 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 s 35 of the IRD Act.
Section 35(2)(b) of the IRD Act expressly requires a constitutional corporation which is a party to an arrangement for the purposes of the Program to comply with the terms and conditions specified in a written agreement between the Commonwealth and the corporation. Further, s 35(3) provides that that agreement must provide for the circumstances in which the corporation must repay amounts to the Commonwealth.
The Amendment Instrument would amend the 2018 Instrument to include the University of Tasmania as a ‘participating university’ for the purposes of the Program. The 2018 Instrument specifies that spending for the Program is supported by the corporations power (s 51(xx) of the Constitution). 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 that regard, the Program, as prescribed by the 2018 Instrument and amended by the Amendment Instrument, singles out and confers on some constitutional corporations (namely, trading or 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 grant agreements in accordance with s 35 of the IRD Act in relation to receipt of the benefits under the Program. Eligibility to receive funding under the Program is limited to businesses which are trading or financial corporations to which section 51(xx) applies).
Consultation
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department has been consulted on this Legislative Instrument.
Regulatory Impact
The regulatory impact is nil.
Details of the Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Amendment Instrument 2019
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Amendment Instrument 2019.
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 – Schedules
This section is a machinery clause that allows the Schedule to the Legislative Instrument to operate according to its terms.
Schedule 1 – Amendments
This Schedule amends the Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Instrument 2018 (the 2018 Instrument) to include the University of Tasmania in the definition for participating universities.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Industry 4.0 Testlabs for Australia Program) Amendment Instrument 2019
This Disallowable 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 Legislative Instrument provides legislative authority to commit Commonwealth funds for the Industry 4.0 Testlabs for Australia Program (the Program).
The Program provides $6 million to establish six Industry 4.0 Testlabs to build the skills required to capitalise on technological opportunities presented by Industry 4.0. The grant opportunity is delivered as a pilot program.
The intended outcomes of the grant opportunity are improved collaboration between the tertiary education sector and small and medium enterprises (SMEs) in areas of innovation; improved skills and capabilities of SMEs to incorporate technology and innovation associated with Industry 4.0 into their businesses; and improved competitiveness of Australian manufacturing industries.
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 Karen Andrews MP
Minister for Industry, Science and Technology