EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry, Science and Technology
Industry Research and Development Act 1986
Industry Research and Development (Mossman Mill Transition 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 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 Industry Research and Development (Mossman Mill Transition Program) Instrument 2019 (Legislative Instrument) prescribed the Mossman Mill Transition Program (the Program). The Program provides for a Commonwealth Government grant of $20 million to Far Northern Milling Pty Ltd (FNM) to support FNM to transition the Mossman Mill from a traditional sugar mill to a mill that supplies feedstock to a bio-refinery plant.
The Industry Research and Development (Mossman Mill Transition Program) Amendment Instrument 2019 (the Amendment Instrument) amends the description of the Program in s 5(2) of the Legislative Instrument. The amended description will allow for $5 million of the Commonwealth’s $20 million commitment to FNM to be redirected towards operational expenses associated with the conclusion of current operations, and transition of the Mossman Mill to a mill that supplies feedstock to a bio‑refinery plant. Details of the activities to be funded will be further specified in the Mossman Mill Transition Grant Opportunity Guidelines (the Guidelines), as amended from time to time.
The changes to the Program specified in the Amendment Instrument do not change the source of funding for the Program, which remains Economic Transition, Outcome 1, Program 2, Sub‑program 2.3, as set out in the Portfolio Budget Statements 2019‑20, Budget Related Paper No. 1.11, Industry, Innovation and Science Portfolio.
The Legislative Instrument specifies that the legislative power in respect of which it is made is the trade and commerce power (within the meaning of paragraph 51(i) of the Constitution) and the corporations power (within the meaning of paragraph 51(xx) of the Constitution). The changes to the Program specified in the Amendment Instrument will continue to rely on the trade and commerce power and the corporations power.
Trade and commerce power
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’. In that regard, the Program prescribed by the Legislative Instrument, and as amended by the Amendment Instrument, is aimed at supporting the capital upgrade, maintenance and operation of the Mossman Mill to:
- enable the production of raw sugar for sale in interstate and overseas markets, and
- foster a supply chain that results in the interstate and overseas trade of products produced at a bio-refinery plant that are derived from milled sugar cane.
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 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 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 s 35 of the IR&D Act.
Section 35(2) of the IR&D Act limits the arrangements made under s 34 so that, where a party to an arrangement made under s 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 s 35(2).
Further, s 35(3) provides that the agreement must provide for circumstances in which the corporation must repay amounts to the Commonwealth.
The Program prescribed by the Legislative Instrument and as amended by the Amendment Instrument singles out and confers on a trading corporation (FNM) benefits which are directed to assisting FNM in the conduct of its ordinary activities (namely, the capital upgrade, maintenance and operation of Mossman Mill). The Program imposes terms and conditions on FNM under a grant agreement in accordance with s 35 of the IR&D Act, in relation to receipt of benefits under the Program.
Authority
Section 33 of the IR&D Act provides authority for the Amendment Instrument.
Consultation
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department has been consulted on the Amendment Instrument.
Regulatory Impact
It is estimated that the regulatory burden is likely to be minor.
Details of the Industry Research and Development (Mossman Mill Transition Program) Amendment Instrument 2019
Section 1 – Name of Instrument
This section specifies the name of the Amendment Instrument as the Industry Research and Development (Mossman Mill Transition Program) Amendment Instrument 2019.
Section 2 – Commencement
This section provides that the Amendment 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 Amendment Instrument is made.
Section 4 – Schedules
This section is a machinery clause that allows the Schedule to the Amendment Instrument to operate according to its terms.
Schedule 1 – Amendments
This Schedule amends s 5(2) of the Legislative Instrument to include funding to FNM to support the capital upgrade, maintenance and operation of the Mossman Mill.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Mossman Mill Transition Program) Amendment Instrument 2019
The Amendment 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 Amendment Instrument
The Program provides Commonwealth funding of $20 million to Far Northern Milling Pty Ltd (FNM) to support the capital upgrade, maintenance and operation of the Mossman Mill.
The purpose of the Amendment Instrument is to amend the description of the Program in s 5(2) of the Legislative Instrument to allow for $5 million under the Program to be redirected towards operational expenses associated with the conclusion of current operations and transition of the Mossman Mill to a mill that supplies feedstock to a bio‑refinery plant.
Human rights implications
This Amendment Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Amendment 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