Industry Research and Development (Space Infrastructure Fund Program) Instrument 2019

EXPLANATORY STATEMENT

Issued by the authority of the Minister for Industry, Science and Technology

Industry Research and Development Act 1986

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 section 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 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 (Space Infrastructure Fund Program) Instrument 2019 (the Legislative Instrument) is to prescribe the Space Infrastructure Fund Program (the Program). The funding for the Program has been secured through the Department of Industry, Innovation and Science (the Department) 2019-20 Budget. The Program provides $19.5 million over three years as part of the Australian Government’s commitment to the Australian space industry.

The purpose of the Program is to fund enabling infrastructure to accelerate the growth of Australia’s space sector. Funds will be used to address identified infrastructure gaps and provide a central element of the international and national pillars of Advancing Space: Australian Civil Space Strategy 2019-2028 (https://www.industry.gov.au/data-and-publications/australian-civil-space-strategy-2019-2028). This is a policy document that is freely available on the Department’s website and explains the Australian Government’s plan for the space sector over the next ten years. Because of the nature of the document it would not be appropriate to include it directly in the Legislative Instrument.

The Program will:

support targeted growth and transformation in the space industry
align with agreed priority areas (reflecting national strengths and opportunities)
leverage investment opportunities
produce broader economic benefits and spill-overs beyond the space sector.

Funds will be provided to infrastructure outcomes, each delivered through a separate grant opportunity, including the following:

Mission control facilities in South Australia – This grant opportunity will provide funding to establish or update mission control facilities in South Australia. The facilities will be fit out with technology to allow users to communicate with and control space based assets such as satellites in orbit, and to collect and access data from such assets.

The purpose is to provide small to medium enterprises (SMEs) with the capability to communicate with and control space based assets and access data.

Supporting world class space manufacturing capability in New South Wales (Western Sydney Aerotropolis) – This grant opportunity will provide funding to assist with the establishment of a central hub around which new space start-ups and SMEs could aggregate in New South Wales.

The purpose is to support the development of high-tech skills and manufacturing capabilities for the space sector and support the development of new space-based assets.

Robotics and Artificial Intelligence (AI) command and control facilities in Western Australia – This grant opportunity will provide funding to establish or update a robotics, automation and AI command and control facility in Western Australia. The facility will be fit out with technology to allow users to communicate with and to control autonomous and robotic systems in space.

The purpose is to advance the development of remote operation of autonomous and robotic systems in space.

Space Data Analysis Facilities in Western Australia – This grant opportunity will provide funding for space data analysis facilities in Western Australia.

The purpose is to support analysis of satellite data for areas such as mining, agriculture, emergency services and maritime surveillance, and build capability in data analysis for space missions. This could include astronomical and meteorological observations data.

Tracking Facilities upgrade of the University of Tasmania facilities – This grant opportunity will provide funding to the University of Tasmania to upgrade infrastructure to commercial standard to allow for precision tracking of satellites and spacecraft, including satellites and spacecraft that support astronomical and meteorological observations.

The purpose is to support commercial orbit and de-orbit tracking and enhance Australia’s ability to collaborate with international partners.

Space Payload Qualification Facilities – This grant opportunity will provide funding to expand and improve space payload qualifications infrastructure.

The purpose is to enable SMEs to test and validate space equipment, including satellites and space-based assets, in Australia.

Funding authorised by this Legislative Instrument comes from Program 2, Outcome 1 as set out in the Portfolio Budget Statements 2019, Budget Related Paper No. 1.11, Industry, Innovation and Science Portfolio (https://www.industry.gov.au/sites/default/files/2019-04/2019-20-department-of-industry-innovation-and-science-pbs.pdf ) at page 19.

The Program will be delivered through a mix of selection processes appropriate to each specific outcome, including competitive, merits based grants programs, targeted or restricted competitive programs, ad hoc grants programs and procurement. 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).

The Program will be delivered by the Department’s Business Grants Hub, a specialised design, management and delivery body with extensive expertise and capability in delivering similar programs.

The Program involves the allocation of finite resources between competing applicants, or ad hoc grants to grantees specifically selected for their unique ability to deliver program objectives. In addition, there will be a robust and extensive assessment process, an enquiry and feedback process, and an existing complaints mechanism for affected applicants. Therefore, external merits review does not apply to decisions about the provision of grants under the Program.

The maximum grant will be $6 million, which will be specifically to establish mission control facilities in South Australia. Where appropriate there will be a co-contribution requirement for grants, which will be set out in the grant opportunity guidelines. Grant opportunity guidelines will be available from business.gov.au.

For competitive selection processes, applications will be assessed against the eligibility criteria and assessment criteria set out in grant opportunity guidelines, which will be available on business.gov.au. At first instance, applications will be assessed by AusIndustry against the eligibility and assessment criteria. An independent assessment committee will then consider eligible applications against the assessment criteria. This will include comparing the applications and scoring each application out of 100. The committee may comprise representatives from the Australian Government, the Australian Space Agency, state and territory governments, and other independent technical experts. The independent assessment committee may seek input from independent experts to inform their assessments.

Applications must address the eligibility and assessment 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 each assessment criterion.

After considering the applications, the independent assessment committee will make recommendations to the Head of the Australian Space Agency regarding those applications suitable for funding. The Head of the Australian Space Agency 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 Head of the Australian Space Agency will not approve funding if there are insufficient Program funds available across relevant financial years for the Program.

For ad hoc grant processes, applications will be assessed against whether proposals deliver value for money, can be delivered on time and budget, and have been appropriately costed. An appropriate delegate within the Department will make decisions on ad hoc grants, having regard to the value of each grant.

Both successful and unsuccessful applicants will be informed in writing. Unsuccessful applicants have an opportunity to discuss the outcome with the Department.

Persons who are otherwise affected by decisions or who have complaints about the Program will also have recourse 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.

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 516 (Williams No 2) the High Court, considering section 32B of the Financial Management and Accountability Act 1997 (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 section 35 of the IR&D Act.

Subsection 35(2) of the IR&D 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 provides funding to constitutional corporations to assist them to undertake space infrastructure projects to deliver mission control facilities in South Australia, and Robotics and AI Command and Control facilities in Western Australia. As provided by s 7 of the Legislative Instrument, eligibility to receive funding under the Program for these opportunities is limited to businesses which are trading or financial corporations to which s 51(xx) applies.

External affairs power

Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to ‘external affairs’.

The external affairs power supports legislation with respect to matters or things outside the geographical limits of Australia. Activities in outer space occur outside the geographical limits of Australia. In that regard, funding provided under the Legislative Instrument will support matters outside Australia, for example:

The mission control facilities in South Australia, Space Data Analysis Facilities in Western Australia and Tracking Facilities upgrade of the University of Tasmania facilities grant opportunities will support the control of, and communication with, space-based assets including satellites which are outside the geographical limits of Australia; and
The Robotics and Artificial Intelligence (AI) command and control facilities in Western Australia grant opportunity will support the control of, and communication with, autonomous and robotic systems outside the geographical limits of Australia.

The external affairs powers also supports legislation with respect to matters concerning Australia’s relations with other countries. In that regard, funding provided under the Legislative Instrument, particularly under the Tracking Facilities upgrade of the University of Tasmania facilities grant opportunity, will enhance Australia’s ability to collaborate with international partners in relation to space-related matters.

Communications power

Section 51(v) of the Constitution empowers the Parliament to make laws with respect to ‘postal, telegraphic, telephonic and other like services’.

In that regard, funding provided under the Legislative Instrument will establish and upgrade facilities that allow users to communicate with space-based assets, including telecommunications satellites. This includes funding provided under the mission control facilities in South Australia grant opportunity and funding provided under the Tracking Facilities upgrade of the University of Tasmania facilities grant opportunity.

Executive power and express incidental power

The express incidental power in section 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in the Parliament, the executive or the courts by the Constitution. Section 61 of the Constitution supports activities that are peculiarly adapted to the government of a nation and cannot be carried out for the benefit of the nation otherwise than by the Commonwealth.

In that regard, funding provided under the Legislative Instrument will be used to enhance Australia’s capability and participation in the space sector. The infrastructure that the Program will support represents core elements of a national space program carried out for the benefit of a nation, and facilitates participation in space activities in a manner that would require national coordination. Moreover, as space activities have the potential to involve or raise matters of international concern, they are peculiar to national government, as they may affect relations with other nations.

Astronomical and meteorological observations power

Section 51(viii) of the Constitution empowers the Parliament to make laws with respect to ‘astronomical and meteorological observations’.

Funding provided under the Legislative Instrument, particularly for the mission control facilities in South Australia, will support infrastructure that will enhance access to space-enabled data, including on astronomical and meteorological observations. Similarly, funding provided under the Space Data Analysis Facilities in Western Australia grant opportunity will be used to establish or upgrade facilities used to analyse space-enabled data, including astronomical and meteorological data.

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 (OBPR reference number 24683).

Notes on clauses

Details of the Industry Research and Development (Space Infrastructure Fund Program) Instrument 2019

Section 1 – Name of Instrument

This section specifies the name of the Legislative Instrument as the Industry Research and Development (Space Infrastructure Fund 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.

The Australian Civil Space Strategy is defined as the Advancing Space: Australian Civil Space Strategy 2019-2028, as that document exists at the time the Legislative Instrument commences. This is a policy document that is freely available on the Department’s website (https://www.industry.gov.au/data-and-publications/australian-civil-space-strategy-2019-2028) and explains the Australian Government’s plan for the space sector over the next ten years. Because of the nature of the document it would not be appropriate to include it directly in the Legislative Instrument.

Section 5 – Prescribed Program

This section prescribes the Space Infrastructure Fund Program (the Program) for the purposes of s 33 of the Act.

The Program funds enabling infrastructure to accelerate the growth of Australia’s space sector. Funding will be used to address identified infrastructure gaps and provide a central element of the international and national pillars of the Australian Civil Space Strategy 2019-2028. It will:

support targeted growth and transformation in the space industry
align with agreed priority areas (reflecting national strengths and opportunities)
leverage investment opportunities
produce broader economic benefits and spill-overs beyond the space sector.

Types of infrastructure supported by the fund include, but are not limited to, mission control facilities; manufacturing start up infrastructure for emerging space industry manufacturers; robotics and AI command and control facilities; data analysis facilities; payload qualification facilities; and orbit/de-orbit tracking facilities.

Section 6 – Specified Legislative Power

This section specifies that the legislative powers in respect of which the Legislative Instrument is made are: the power of the Parliament to make laws with respect to postal, telegraphic, telephonic, and other like services (paragraph 51(v) of the Constitution); the power of the Parliament to make laws with respect to astronomical and meteorological observations (paragraph 51(viii) of the Constitution); the power of the Parliament to make laws with respect to foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth (paragraph 51(xx) of the Constitution); the power of the Parliament to make laws with respect to activities relating to places, persons, matters or things external to Australia or matters affecting Australia’s relations with foreign countries (paragraph 51(xxix) of the Constitution); and the power of the Parliament to make laws with respect to measures that are peculiarly adapted to the government of a nation and cannot otherwise be carried on for the benefit of the nation.

Section 7 – Eligibility criteria relating to Program

This section sets out the eligibility criteria relating to the Program for the purposes of subsection 33(4) of the Act. It provides that the eligibility criteria for the funding described in paragraphs 5(2)(a) and 5(2)(c) of the Legislative Instrument include that applicants must be trading or financial corporations to which paragraph 51(xx) of the Constitution applies.

Statement of Compatibility with Human Rights

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

Industry Research and Development (Space Infrastructure Fund Program) Instrument 2019

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 Space Infrastructure Fund Program (the Program) provides funds for enabling infrastructure to accelerate the growth of Australia’s space sector. Funding will be used to address identified infrastructure gaps and provide a central element of the international and national pillars of the Australian Civil Space Strategy 2019-2028. It will:

support targeted growth and transformation in the space industry
align with agreed priority areas (reflecting national strengths and opportunities)
leverage investment opportunities
produce broader economic benefits and spill-overs beyond the space sector.

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

Administered by Department of Industry, Science and Resources

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