Industry Research and Development (Soil Program) Instrument 2021

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Agriculture and Northern Australia

Industry Research and Development Act 1986

Industry Research and Development (Soil Program) Instrument 2021

Purpose and Operation

Section 33 of the Industry Research and Development Act 1986 (the 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 delegated the Minister’s power under subsection 33(1) to the Minister responsible for administering the Primary Industries Research and Development Act 1989 under subsection 33(6) of the Act to prescribe the Soil Program (the Program). This is currently the Minister for Agriculture and Northern Australia.

The statutory framework provided by section 33 of the 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, while reducing administrative burden on the Commonwealth.

Once a program is prescribed by the Minister under section 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 section 36).

The purpose of the Industry Research and Development (Soil Program) Instrument 2021 (the Legislative Instrument) is to prescribe the Program. Funding for the Program has been secured through the Department of Agriculture, Water and the Environment’s 2021-22 Budget. The Program is part of the Australian Government’s commitment to the implementation of the National Soil Strategy to enhance Australia’s soil health.

The purpose of the Program is to improve the understanding of Australia’s soil condition and how to better manage it, assess the impact of land management practices on soil and assist farmers to improve their productivity and profitability.

The Program seeks to support this purpose by:

• Supporting researchers to conduct research relating to soil science by providing funding through Soil Science Challenge Grants ($20 million);
• Supporting the development and implementation of an accreditation program for soil practitioners and education resources relevant to the accreditation program, by providing funding to the Australian Society of Soil Science Incorporated (also known as Soil Science Australia) (up to $1 million);
• Encouraging soil data owners to share soil data by providing payments ($21.3 million); and
• Enabling the collection of soil samples, including by land managers, and accredited laboratories to test the soil samples, analyse the test results and provide the data obtained from the testing and analysis to the Commonwealth ($54.4 million).

The total funding subject to the Legislative Instrument is up to $96.7 million.

Funding authorised by this Legislative Instrument comes from Program 3.2 Sustainable Management - Natural Resources, Outcome 3, as set out in the Portfolio Budget Statements 2021-22, Budget Related Paper No. 1.1, Agriculture, Water and Environment Portfolio (https://www.awe.gov.au/sites/default/files/2021-05/pbs2021-22_awe.pdf) at page 66.

The Program will be delivered by the Department of Agriculture, Water and the Environment (the Department).

The Department will deliver the different components of the Program through a suite of grants and procurement processes in accordance with the requirements of the Commonwealth resource management framework, including the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the Commonwealth Grants Rules and Guidelines 2017 (CGRGs) (https://www.finance.gov.au/government/commonwealth-grants/commonwealth-grants-rules-and-guidelines) and the Commonwealth Procurement Rules (CPRs) (https://www.finance.gov.au/government/procurement/commonwealth-procurement-rules).

It is intended that a grants program, Soil Science Challenge Grants, will be delivered through an open and competitive grant round. It will be administered by the Department and the Department of Social Services’ Community Grants Hub in accordance with the CGRGs. The eligibility and assessment criteria will be outlined in the Program guidelines and published on GrantConnect (grants.gov.au). The eligibility and assessment criteria will require applicants to be a constitutional corporation.

It is intended that an assessment panel will assess the applications against the assessment criteria and make recommendations to the Minister for Agriculture and Northern Australia, who is the decision maker relating to the funding. Funding decisions will be made publicly available on the Department’s website and GrantConnect.

It is intended that the funding to the Australian Society of Soil Science Incorporated (also known as Soil Science Australia) will be completed as an ad hoc grant. In such circumstances, the grant will be administered by the Department in accordance with the CGRGs. The eligibility and assessment criteria will be outlined in the Program guidelines.

Soil Science Australia is a not-for-profit professional association for soil scientists and people interested in the responsible management of Australia’s soil resources. As the peak industry body, Soil Science Australia has been identified as the only organisation that could meet the Program’s outcome and objective of developing and implementing an accreditation program for soil practitioners.

Spending decisions relating to an ad hoc grant will be made by the Minister for Agriculture and Northern Australia who is responsible for administering the Program, taking into account the recommendations of an assessment by Departmental officers against the eligibility and assessment criteria.  

Funding for the sharing of soil data, the collection of soil data, as well as soil testing and analysis, activities may be undertaken using both procurements and grants. There are situations where either a grant or procurement would be appropriate – for example:

• If a party is willing to sell their existing data or a party allows access to their database, then a procurement may be more appropriate.
• If a party is engaged to provide specific number of sets of soil data, then a grant may be more appropriate.

In all instances, the Department will adhere to the CPRs and CGRGs where applicable, including the publishing of guidelines and successful participants, the use of assessment panels and the decisions being made by an appropriate person or delegate.

The Program will not be subject to merits review. Merits review of competitive grant components and procurement components of the Program would not be appropriate because these decisions will relate to the allocation of finite resources between competing applicants and an allocation already made to a party would be affected by overturning the original decision. Merits review of the ad hoc grant component of the Program would not be appropriate because these decisions will relate to the provisions of payments to a certain service provider over other service providers. In relation to the ad hoc grant, Soil Science Australia was identified as the only organisation that could meet the Program’s objectives. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see items 4.11 to 4.19 of the guide ‘What decisions should be subject to merits review?’).

Persons who are otherwise affected by decisions or who have concerns about the Program will be able to provide feedback to the Department. The Department investigates 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.

Statement of the Relevance and Operation of Constitutional Heads of Power

For the purposes of subsection 33(3) of the Act, the powers of the Parliament to make laws with respect to the following are specified for the Program prescribed by the Legislative Instrument:

• Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth (paragraph 51(xx) of the Constitution) (corporations power); and
• Census and statistics power (paragraph 51(xi) of the Constitution).

Corporations Power

Paragraph 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 section 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 Act are substantially different to the provisions considered by the High Court in Williams No 2. Section 34 of the Act corresponds to section 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 section 35 of the Act. Subsection 35(2) of the Act limits the arrangements made under section 34 so that, where a party to an arrangement made under section 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 subsection 35(2).

Further, subsection 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 confers on eligible constitutional corporations benefits which are directed to assisting them in the conduct of its ordinary activities and will impose terms and conditions on it in accordance with section 35 of the Act, in relation to receipt of those benefits. In particular, the Program will provide funding to constitutional corporations to assist them to undertake its activities to conduct research relating to soil science and to the Australian Society of Soil Science Incorporated (a constitutional corporation) to undertake its activities to accredit soil practitioners and develop relevant education resources.  

Census and Statistics Power

Paragraph 51(xi) of the Constitution empowers the Parliament to make laws with respect to census and statistics.

The Program prescribed by the Legislative Instrument will encourage soil data owners to share their soil data and enables land managers and other persons to undertake soil sampling, testing and analysis, with the resulting data provided to the Commonwealth.

Authority

Section 33 of the Act provides authority for the Legislative Instrument.

Consultation

In accordance with section 17 of the Legislation Act 2003, the Department of Industry, Science, Energy and Resources and the Attorney-General’s Department were consulted on this Legislative Instrument and its development.

The Department has consulted with key stakeholders including testing laboratories, soil experts and advisors regarding the delivery of the Program.

In addition, the Department has set up two consultative groups.

The National Soil Information System Consultative Group will advise the Australian Government on the following on an ‘as-needed’ basis: historical soil data review, historical data capture, a National Land Management Practice Classification System, redevelopment of the Australian resource soil information system.

The Incentives and Extension Consultative Group will advise the Australian Government on the following on an ‘as-needed’ basis: soil testing incentives, Soil Science Challenge Grants, enhancing soil education and expertise.

There will be regular and ongoing engagement to ensure that the Program is meeting the overarching goals in an effective and meaningful manner.

The Department will consult with Soil Science Australia on an ongoing basis to ensure that the grant will be administered and used effectively to achieve the aims of the Program.

Regulatory Impact

It is estimated that the regulatory burden is likely to be minor. The Office of Best Practice Regulation assessed the Program is unlikely to have a regulatory impact on business, individuals or community organisations (OBPR reference number 43731).

Details of the Industry Research and Development (Soil Program) Instrument 2021

Section 1 - Name of Instrument

1. This section specifies the name of the Legislative Instrument as the Industry Research and Development (Soil Program) Instrument 2021 (the Legislative Instrument).

Section 2 - Commencement

2.      This section provides that the Legislative Instrument commences on the day after registration on the Federal Register of Legislation.

Section 3 - Authority

3.      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

4.      This section provides for definitions of terms used in the Legislative Instrument.

Section 5 - Prescribed Program

5.      This section prescribes the Soil Program (the Program) for the purposes of subsection 33(1) of the Act.

6.      The purpose of the Program is to improve understanding of Australia’s soil conditions and how to better manage it, assess the impact of land management practices on soil and assist farmers to improve their productivity and profitability. The Program seeks to achieve this purpose by:

1. Providing funding to researchers to conduct research relating to soil science (paragraph 5(2)(a));
2. Providing funding to the Australian Society of Soil Science Incorporated (also known as Soil Science Australia) to develop and implement a program for the accreditation of soil practitioners and education resources relevant to the accreditation program (paragraph 5(2)(b));
3. Providing payments for soil data (paragraph 5(2)(c));
4. Providing funding to enable the collection of soil samples, including by land managers, and accredited laboratories to test the soil samples, analyse the test results and provide the data obtained from the testing and analysis to the Commonwealth (paragraph 5(2)(d)).

7.      It is intended that land managers, as referred to in paragraph 5(2)(d), include persons who administer, direct, oversee or control the use of land. Examples of land managers would include farmers and Indigenous traditional owners of land.

Section 6 - Specified Legislative Power

8.      This section specifies that for the purposes of subsection 33(3) of the Act, the legislative powers in respect of which the Legislative Instrument is made are powers of the Parliament to make laws with respect to:

• For parts of the Program covered by paragraphs 5(2)(a) and (b) - foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth (paragraph 51(xx) of the Constitution);
• For the parts of the Program covered by paragraph 5(2)(c) to (d) - census and statistics (paragraph 51(xi) of the Constitution).

Section 7 - Eligibility criteria relating to program

9.      This section specifies that for the purposes of subsection 34(4) of the Act, the eligibility criteria relating to funding in the form of grants to researchers to conduct research relating to soil science (paragraph 5(2)(a)) includes the requirement that the applicants must be trading or financial corporations.

10.  This criterion reflects the head of legislative power relied upon by this component of the Program.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Industry Research and Development (Soil Program) Instrument 2021

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

The purpose of the Industry Research and Development (Soil Program) Instrument 2021 (the Legislative Instrument) is to prescribe the Soil Program (the Program). The Program provides up to $96.7 million as part of the Australian Government’s commitment to the National Soil Strategy to enhance Australia’s soil health.

The purpose of the Program is to improve understanding of Australia’s soil conditions and how to better manage it, assess the impact of land management practices on soil and assist farmers to improve their productivity and profitability.

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. David Littleproud MP

Minister for Agriculture and Northern Australia