EXPLANATORY STATEMENT
Issued by the authority of the Minister for Industry, Science and Technology|
Industry Research and Development Act 1986
Industry Research and Development (Small and Medium Enterprises Export Hubs Program) 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 purpose of the Industry Research and Development (Small and Medium Enterprises Export Hubs) Instrument 2019 (the Legislative Instrument) is to prescribe the Small and Medium Enterprises (SME) Export Hubs Program (the Program). The Program provides $18.8 million in grants over four years to support the development of local, regional and Indigenous brands through business collaborations in the identified areas of competitive strength.
The Program supports the establishment and operation of SME Export Hubs in the six Growth Centre sectors:
- Advanced Manufacturing
- Cyber Security
- Food and Agribusiness
- Medical Technologies and Pharmaceuticals
- Mining Equipment, Technology and Services
- Oil, Gas and Energy Resources.
The SME Export Hubs will assist participating SMEs to strengthen their capabilities to participate in the export market and thereby increase exports and create jobs. SME Export Hubs will undertake activities such as developing and implementing export strategies, providing training to SMEs, and facilitating cooperation between local and regional SMEs to build on identified SME strengths and innovation potential. This will enable SMEs to grow through activities such as developing collective brands and leveraging local infrastructure to support the participation of their region in global supply chains.
Funding authorised by this Legislative Instrument comes from Business research, development and commercialisation Outcome 1, Program 1, Sub-program 1.2, as set out in the Portfolio Budget Statements 2018-19, Budget Related Paper No. 1.13A, Industry, Innovation and Science Portfolio (https://www.industry.gov.au/sites/g/files/net3906/f/2018-19-department-of-industry-innovation-and-science-pbs.pdf) at page 32.
The Program is delivered by the Department of Industry, Innovation and Science’s (the Department) Business Grants Hub, which is a specialised program design, management and delivery body with extensive expertise and capability in delivering similar programs.
The Program is a competitive, merits based grants program and will be delivered through a two-stage process. 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 grant opportunity guidelines, available at business.gov.au.
Spending decisions are made by the Minister for Industry, Science and Technology, taking into account the recommendations of the SME Export Hubs Advisory Committee.
Grants are a minimum of $150,000 up to a maximum of $1.5 million. Within this range, the grant amount may be up to half of the approved project value.
The Program involves the allocation of finite resources between competing applicants,
and an allocation that has been made to another party would be affected if the original decision was overturned. In addition, there is a robust and extensive assessment process, an enquiry and feedback process, and an existing complaints mechanism for affected applicants. Therefore, external merits review is not available to decisions about the provision of grants under the Program.
The Program will have a two-stage selection process:
Under stage one, AusIndustry will receive expressions of interest. AusIndustry will first assess the expressions of interest against the eligibility criteria and then against the stage one merit criterion. Eligible expressions of interest will then be provided to the relevant Growth Centres for consideration. The Growth Centres will provide advice to the Program Delegate, who is a Senior Executive Service officer within the Department, on the capability, capacity, and the likelihood of success and alignment of the expression of interest with the strategic priorities of the relevant Growth Centres.
The Department considers the advice of the relevant Growth Centres and recommends to the Program Delegate which expressions of interest should be invited to submit a stage two grant application. The Program Delegate will decide which expressions of interest will proceed to stage two.
Proponents of successful expressions of interest will be invited to submit applications under stage two. These applications will be assessed against the eligibility criteria and merit criteria set out in the grant opportunity guidelines in two steps. AusIndustry will assess applications against the eligibility criteria and determine eligible applications. An independent assessment committee will then consider eligible applications against the merit criteria. This will include comparing the applications and scoring each application out of 100.
Applications must address the eligibility and merit criteria, and provide 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. To be competitive, applications must score highly against all merit criteria.
After considering the applications, the independent assessment committee will make recommendations to the Minister regarding those applications suitable for funding. The Minister will make the final decision about which grants to approve, taking into consideration the independent assessment committee’s recommendations, and the availability of grant funds. The Minister will not approve funding if there are insufficient Program funds available across relevant financial years for the Program.
Both successful and unsuccessful applicants will be informed in writing via email. The Department will email unsuccessful applicants outlining the reasons why they were not successful. Unsuccessful applicants can submit a new application for the same or a similar project in any future funding rounds. Where this occurs, 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 can contact 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 trade and commerce power, which encompasses the Commonwealth’s ability to make laws with respect to trade and commerce with other countries, and among the states (paragraph 51(i) of the Constitution). In that regard, funding provided under the Legislative Instrument will encourage growth in export activities by SMEs through increased local and regional collaboration and leveraging local infrastructure to support the participation of their region in global supply chains.
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 has been consulted on this Legislative Instrument.
Regulatory Impact
It is estimated that the regulatory burden is likely to be minor.
Details of the Industry Research and Development (Small and Medium Enterprises Export Hubs Program) Instrument 2019
Section 1 – Name of Instrument
This section specifies the name of the Legislative Instrument as the Industry Research and Development (Small and Medium Enterprises Export Hubs Program) 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 – Definitions
This item provides for definitions of terms used in the Legislative Instrument.
Section 5 – Prescribed Program
This section prescribes the Small and Medium Enterprises Export Hubs Program (the Program) for the purposes of s 33 of the Act.
The Program supports the establishment of small and medium enterprises export hubs in the six Growth Centre sectors:
- Advanced Manufacturing
- Cyber Security
- Food and Agribusiness
- Medical Technologies and Pharmaceuticals
- Mining Equipment, Technology and Services
- Oil, Gas and Energy Resources
Section 6 – Specified Legislative Power
This section specifies that the legislative power in respect of which the Legislative Instrument is made is the trade and commerce power, which encompasses the Commonwealth’s ability to make laws with respect to trade and commerce with other countries, and among the states (paragraph 51(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 (Small and Medium Enterprises Export Hubs Program) 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
The Small and Medium Enterprises (SME) Export Hubs Program (the Program) will support the development of local, regional and Indigenous brands through business collaborations in the identified areas of competitive strength. The Program supports the establishment of SME Export Hubs in the six Growth Centre sectors:
- Advanced Manufacturing
- Cyber Security
- Food and Agribusiness
- Medical Technologies and Pharmaceuticals
- Mining Equipment, Technology and Services
- Oil, Gas and Energy Resources.
Human rights implications
This Disallowable Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Disallowable 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