EXPLANATORY STATEMENT
Issued by authority of the Assistant Treasurer and Minister for Financial Services
Industry Research and Development Act 1986
Industry Research and Development (Streamlining External Dispute Resolution for Scams Program) Instrument 2024
Subsection 33(1) of the Industry Research and Development Act 1986 (the Act) provides that the Minister for Industry and Science may, by disallowable legislative instrument, prescribe programs in relation to industry, innovation, science or research, including in relation to the expenditure of Commonwealth money under such programs.
Section 33 of the Act sets out a statutory framework 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 the administrative burden on the Commonwealth.
Once a program is prescribed by the Minister under section 33, subsection 34(1) of the Act 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 Commonwealth entity, or by their delegate (under section 36 of the Act).
Subsection 33(6) of the Act provides that the Minister for Industry and Science may delegate, to another Minister, the Minister’s power under subsection 33(1) of the Act to prescribe a program. A delegation under subsection 33(6) of the Act is in place for the Streamlining External Dispute Resolution for Scams Program (the Program), which empowers the Assistant Treasurer and Minister for Financial Services to prescribe (and, by virtue of subsection 33(3) of the Acts Interpretation Act 1901, amend) the Program.
The purpose of the Industry Research and Development (Streamlining External Dispute Resolution for Scams Program) Instrument 2024 (the Instrument) is to prescribe the Program.
The Program will provide a grant of up to $14.72 million (exclusive of GST) over two years from 2024-25 to the Australian Financial Complaints Authority Limited (AFCA) to prepare for, and implement all systems necessary for, operating an expanded external dispute resolution (EDR) scheme for scam-related complaints involving the banking, telecommunications and digital platforms industries.
Having AFCA as the single EDR scheme for these complaints will ensure consumers in these industries have access to a ‘single door’, free and fair complaint resolution mechanism to escalate their scam-related complaints and seek redress.
This Program supports broader reforms to protect the Australian community from scams.
Statement of the relevance and operation of constitutional heads of power
For the purposes of subsection 33(3) of the Act, the Instrument specifies that the legislative powers in respect of which the Instrument is made are the following:
Communications power
Paragraph 51(v) of the Constitution empowers the Parliament to make laws with respect to ‘postal, telegraphic, telephonic and other like services’.
Funding provided under the Program will enable AFCA to implement an expanded EDR scheme for scam‑related complaints involving the telecommunications and digital platforms industries.
Banking power
Paragraph 51(xiii) of the Constitution empowers the Parliament to make laws with respect to ‘banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money’.
Funding provided under the Program will enable AFCA to implement an expanded EDR scheme for scam-related complaints involving the banking industry.
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’.
Funding provided under the Program will enable AFCA to implement an expanded EDR scheme for scam-related complaints involving constitutional corporations in the banking, telecommunications, and digital platforms industries.
The Act does not specify any conditions that need to be satisfied before the power to prescribe programs can be exercised.
In accordance with section 17 of the Legislation Act 2003, the Attorney-General’s Department and the Department of Industry, Science and Resources have been consulted on this Instrument. Consultation was undertaken with these two agencies as the Instrument is mechanical in nature and only enables grant funding to be provided to AFCA to implement an expanded EDR scheme for certain scam-related complaints, rather than dealing with the substance of how this expanded EDR scheme will operate.
The Department of the Treasury recently consulted on EDR arrangements for scam-related complaints, including with consumer groups, banking, telecommunications and digital platform sectors, and regulators and other government agencies.
Further public consultation on the scope and operation of AFCA’s expanded EDR scheme will also be undertaken through other forums, including as AFCA undertakes implementation work. This will include consultation with consumer groups, banking, telecommunications and digital platform sectors, regulators and other relevant government agencies.
The Instrument is a legislative instrument for the purposes of the Legislation Act 2003.
In accordance with section 42 of the Legislation Act 2003, the Instrument is subject to disallowance.
In accordance with section 50 of the Legislation Act 2003, the Instrument is subject to sunsetting.
The Instrument commenced on the day after registration on the Federal Register of Legislation.
Details of the Instrument are set out in Attachment A.
A statement of Compatibility with Human Rights is at Attachment B.
ATTACHMENT A
Details of the Industry Research and Development (Streamlining External Dispute Resolution for Scams Program) Instrument 2024
Section 1 – Name
This section provides that the name of the instrument is the Industry Research and Development (Streamlining External Dispute Resolution for Scams Program) Instrument 2024 (the Instrument).
Section 2 – Commencement
The Instrument commenced on the day after the instrument is registered on the Federal Register of Legislation.
Section 3 – Authority
The Instrument is made under the Industry Research and Development Act 1986 (the Act).
Section 4 – Definitions
This section provides definitions for the purposes of the Instrument.
Section 5 – Prescribed program
This section prescribes the Streamlining External Dispute Resolution for Scams Program (the Program) for the purposes of subsection 33(1) of the Act.
The Program provides funding by way of a grant to the Australian Financial Complaints Authority Limited (AFCA) to prepare for, and implement all systems necessary for, operating an expanded EDR scheme for scam-related complaints that have been made to authorised deposit-taking institutions, participants in the telecommunications industry, and providers of an electronic service. These terms are broadly defined to capture the banking, telecommunications and digital platforms industries.
AFCA’s expanded EDR scheme in relation to scams may cover one or more providers within these industries and does not need to cover all the providers within each of those industries.
The grant to AFCA will be administered in accordance with the Commonwealth resource management framework, including the Public Governance, Performance and Accountability Act 2013, the Commonwealth Grants Rules and Principles 2024 and departmental grant requirements and processes.
As a delegate of the Secretary, the Deputy Secretary of Markets Group (SES Band 3) will be responsible for approving and administering the grant in accordance with the Act and the Commonwealth resource management framework. Treasury will provide advice to the decision maker to support the decision-making process.
Information about the grant, including the grant opportunity guidelines and information about the final decision, will be made available on the GrantConnect website (www.grants.gov.au).
Section 6 – Specified legislative power
This section specifies that the legislative powers in respect of which the Instrument is made are the powers of the Parliament to make laws with respect to the following matters:
• postal, telegraphic, telephonic and other like services (within the meaning of paragraph 51(v) of the Constitution);
• banking, other than State banking; also State banking extending beyond the limits of the State concerned, the incorporation of banks, and the issue of paper money (within the meaning of paragraph 51(xiii) of the Constitution; and
• foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution).
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Industry Research and Development (Streamlining External Dispute Resolution for Scams Program) Instrument 2024
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 (Streamlining External Dispute Resolution for Scams Program) Instrument 2024 (the Legislative Instrument) is to prescribe the Streamlining External Dispute Resolution for Scams Program (the Program).
The Program provides funding, by way of a grant, to the Australian Financial Complaints Authority Limited (AFCA) to prepare for, and implement systems necessary for, operating an expanded external dispute resolution (EDR) scheme for complaints about scams involving the banking, telecommunications and digital platforms industries.
Having AFCA as the single EDR scheme for these complaints will ensure consumers in these industries have access to a ‘single door’, free and fair complaint resolution mechanism to escalate their scam-related complaints and seek redress.
This Program supports broader reforms to protect the Australian community from scams.
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.