EXPLANATORY STATEMENT
Issued by the authority of the Minister for Small and Family Business, Skills and Vocational Education
Industry Research and Development Act 1986
Industry Research and Development (Small Business Digital Champions Project) Instrument 2019
Purpose and Operation
The legislative framework
Subsection 33(1) 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, under subsection 33(6) of the IR&D Act, delegated the Minister’s power under subsection 33(1) to prescribe the Small Business Digital Champions Project (the Project) as a program for the purpose of s 33(1) to the Minister for Small and Family Business, Skills and Vocational Education.
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 a Minister under s 33(1), s 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 s 34(1) may be exercised on behalf of the Commonwealth by a Minister or an accountable authority of a non-corporate Commonwealth entity, or by their delegate (under s 36).
The Small Business Digital Champions Project
The purpose of the Industry Research and Development (Small Business Digital Champions Project) Instrument 2019 (the Instrument) is to prescribe the Project as a program for the purpose of s 33(1). A small business for the purpose of the Project is defined as a business with less than 20 full time (or equivalent) employees, including sole traders.
The aim of the Project is to:
- support 100 Australian small businesses to undertake an online digital transformation for the period of 12 months facilitated through a third party provider;
- support 15 of those 100 small businesses to be ‘Digital Champions’ and assign them further assistance from high profile ‘Digital Mentors’;
- enable the Australian Government to create case studies about the Digital Champions and other online content that will show benefits that online digital technology can offer small businesses as well as provide an informative resource for all Australian small businesses on how to digitally transform their businesses; and
- fund Digital Advisors to give sector-specific advice on digitising to Project participants and members of small business industry associations. This will extend the support the Project provides from the select group to the broader small business community.
The Department of Jobs and Small Business (the Department) will select providers to assess applicants, administer support and advice to the Project’s participants, produce and promote case studies, and to evaluate the impact of the Project.
Procurement
Procurement decisions will be made in accordance with the Commonwealth’s resource management framework, including the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Procurement Rules.
One provider will be contracted to help administer and assess the small business applications to participate in the Project (the assessment provider). A second provider (the project provider) will deliver the remaining components of the Project.
Procurement decisions, once made, will be final and not subject to merits review. Re-making a procurement decision after entry into contractual arrangements with a successful proponent is legally complex, impractical, and would delay the Project.
Project participants and Digital Champions
Small businesses will apply to take part in the Project. The Department, in collaboration with the assessment provider, will select the 100 participating small businesses including the 15 Digital Champions.
Eligibility is open to Australian owned and operated businesses that have:
- less than 20 full time (or equivalent) employees, including sole traders;
- not received any Government funding (State or Commonwealth) for the same or similar digital supports;
- demonstrated compliance with all taxation laws and industrial relations laws; and
- an identifiable digital need.
If a small business is successful in its application, it must be willing to have details of its business available publically and be willing to be promoted online through a range of digital channels. In selecting Digital Champions the Department and assessment provider will aim to achieve representation from a cross-section of industries and from businesses at different stages of digital maturity. The Digital Champions will also need to agree to accept mentor services.
Throughout the Project, the project provider will work with each small business participant to help identify the technology or software that will best meet its needs. A number of high profile Digital Mentors will work with the 15 Digital Champions to provide tailored advice to support their digital transformation.
The Digital Mentors will be well-known business people with relevant expertise. The project provider will be responsible for capturing the journeys and telling selected stories of the participating businesses by way of case studies. In addition, they will work with the Digital Champions in order to create an interactive experience that the broader small business community can follow, engage with online and be inspired to undertake their own transformation.
In addition to Digital Mentors, the Project includes industry specific Digital Advisors in industry associations that will provide expert advice to small businesses to undertake their digital transformation. Digital Advisors will extend the support the Project provides from the select group to the broader viewership and general business community.
The project provider will assess the needs of the 100 small business participants to undertake a digital transformation and allocate practical support of up to $20,000 in value to each of them. Support can be sourced from the funding made available to the project provider from the Project or through in-kind sponsorship from private corporations. All support will be facilitated through the project provider and is based on an assessment of the small business’ online digital needs.
The project provider will be required to keep records of the assessments of business needs and the provision of support. If a participant is not satisfied with the provider’s services, the participant may request review of that decision by the provider or the Department.
In the event the request is made to the Department, the Department will handle the matter by acknowledging receipt of the request and contacting the participant with a view to resolving any issues as soon as practicable. The Department will review the issue and work with the participant and provider to address it where needed. Where appropriate, the Department will check whether the participant gives it permission to contact the provider prior to doing so. The Department will investigate and undertake a review of the case, and respond to the participant regarding the outcome.
A person dissatisfied with a provider or the Department can raise the matter with the Commonwealth Ombudsman.
External merits review is not available in relation to decisions about the selection of small businesses, including Digital Champions, under the Project. The 100 small businesses will participate in the project for 12 months. The Project involves the allocation of finite resources between competing applicants and an allocation made to another party would be affected if the original decision were overturned as there is only funding for 100 participants.
The same applies in relation to the selection of 15 Digital Champions from among the 100 participants.
In addition, small businesses not selected to participate will still benefit from the Project through being able to learn from the case studies, as noted above. The most useful case studies for small business are those that demonstrate how small businesses can achieve their desired outcomes, so that others can replicate similar forms of success. Promoting these case studies will provide an informative resource for all Australian small businesses, inspiring and educating them on how to digitally transform their business.
Funding of $8.9 million over two years from 2018-19 has been secured for the Project in the 2018-19 Mid-Year Economic and Fiscal Outlook as part of the ‘Small Business Package —improving small business digital capability’ measure under the Small Businesses Package.
Constitutional head of power
The Instrument specifies that the Project spending is supported by the communications power (section 51(v) of the Constitution), which empowers the Parliament to make laws with respect to ‘postal, telegraphic, telephonic and other like services’. In that regard, funding provided under the Instrument will assist 100 small businesses by assessing their online digital needs in the form of hardware, software and associated digital training and support to undertake a digital transformation. Of this group, 15 ‘Digital Champions’, will be selected and assigned Digital Mentors.
The digital transformation of the Digital Champions will take place in the public spotlight and case studies from the Digital Champions and the other 85 small businesses will be communicated to the small business community. In addition, funding to create 15 Digital Adviser positions in small business industry associations will provide advice and support for the wider small business community wanting to adapt to digital business capabilities such as online selling, cloud based accounting and web-based invoicing.
Authority
Subsection 33(1) of the Industry Research and Development Act 1986 provides authority for the Legislative Instrument.
Consultation
In accordance with s 17 of the Legislation Act 2003, the Department of Industry, Innovation and Science and the Attorney General’s Department were consulted on this Instrument.
Regulatory Impact
The Office of Best Practice Regulation assessed the proposal has only a minor regulatory impact (OBPR reference number 24614).
Details of the Industry Research and Development (Small Business Digital Champions Project) Instrument 2019
PART 1 – PRELIMINARY
Section 1 – Name of Instrument
This section specifies the name of the Instrument as the Industry Research and Development (Small Business Digital Champions Project) Instrument 2019.
Section 2 – Commencement
This section provides that the 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 Instrument is made.
Section 4 – Definitions
This section provides for definitions of terms used in the Instrument.
Section 5 – Prescribed Program
This section prescribes the Small Business Digital Champions Project (the Project) for the purposes of s 33(1) of the Act, and outlines its purpose.
The purpose of the Project is to fund and promote the adoption by small businesses of online digital technology, including by:
(a) funding goods, services and training related to online digital technology;
(b) providing mentors to assist selected small businesses to access and use online digital technology; and
(c) funding industry associations to advise on online digital technology.
Section 6 – Specified Legislative Power
This section specifies that the legislative power in respect of which the Instrument is made is the power of the Parliament to make laws with respect to postal, telegraphic, telephonic, and other like services within the meaning of paragraph 51(v) 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 Business Digital Champions Project) Instrument 2019
This Disallowable 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 purpose of the Industry Research and Development (Small Business Digital Champions Project) Instrument 2019 (the Instrument) is to prescribe the Small Business Digital Champions Project (the Project) as a program for the purpose of s 33(1) of the Industry Research and Development Act 1986.
The purpose of the Project is to fund and promote the adoption by small businesses of online digital technology, including by:
(a) funding goods, services and training related to online digital technology;
(b) providing mentors to assist selected small businesses to access and use online digital technology; and
(c) funding industry associations to advise on online digital technology.
Human rights implications
The Instrument engages the following rights:
Right to an adequate standard of living
Article 11 of the of the International Covenant on Economic, Social and Cultural Rights (ICESCR) recognises the right of everyone to an adequate standard of living and to the continuous improvement of living conditions.
Right to work
Article 6 of the ICESCR recognises the right to work.
Right to an adequate standard of living
The Project promotes the right to an adequate standard of living by increasing efficiencies and digitally transforming small businesses, with the results of the Project being shared with the broader small business community and benefiting the employees of small business.
Right to work
The Project has been designed to support 100 small businesses to undertake an online digital transformation, together with an interactive experience that will be shared with the broader small business community. There is a strong incentive for small businesses to engage in the Project, by gaining expert advice provided by a Digital Advisor at no cost, and supporting some of those businesses to become Digital Champions.
Through participation in the Project, and through engagement by the broader small business community, small businesses and their employees will gain a competitive advantage through the benefits provided by online digital technology. The project therefore encourages workers within small businesses to engage with their right to work.
Conclusion
The Instrument is compatible with human rights as it advances human rights.
Senator the Hon Michaelia Cash
Minister for Small and Family Business, Skills and Vocational Education