Policies and Practices of the IR & D Board in relation to the Pre-Seed Fund (PSF) Program Direction No. 1 of 2003

Overview

The Commonwealth of Australia introduced the Industry Research and Development Act 1986 to address the need for fostering and supporting research and development activities within the industry sector, ultimately aiming to bolster economic growth and innovation. Enacted by the Parliament of Australia, the Act establishes the framework for the Industry Research and Development Board, which is responsible for administering various programs and initiatives to promote research and development. The policy objective of the Act is to encourage collaborative efforts between industry, academia, and research institutions to drive technological advancements and economic prosperity. In 2003, the Minister for Industry, Tourism and Resources issued the Pre-Seed Fund (PSF) Program, Policies and Practices Direction No. 1, amending the existing Direction No. 1 of 2001 under the authority of the Industry Research and Development Act 1986. This legislative instrument aims to update the definitions and eligibility criteria for institutions and companies participating in the Pre-Seed Fund Program, ensuring that the program aligns with current research and development objectives and supports emerging businesses effectively.

Scope and Application

The Industry Research and Development Act 1986 applies to entities and companies involved in research and development activities in Australia, particularly those seeking funding under the Pre-Seed Fund (PSF) Program. This legislative instrument specifically targets eligible institutions and companies that are engaged in pre-seed research and development (R&D) activities, aiming to foster innovation and commercialisation. Eligible institutions include specified higher education institutions, CSIRO, DSTO, AIMS, ANSTO, Cooperative Research Centres, and other entities meeting specific criteria set by the Board. Eligible companies must be undertaking pre-seed R&D activities, be incorporated in Australia, controlled by or utilizing intellectual property owned by eligible institutions or researchers, and have no sales revenue. The Act applies nationally, overseen by the Industry Research and Development Board under the direction of the Minister for Industry, Tourism and Resources. This direction does not explicitly state exclusions but focuses on setting criteria for eligibility and funding under the Pre-Seed Fund Program.

Key Provisions

The main sections of this direction, as stipulated in the Industry Research and Development Act 1986, include amendments to the Pre-Seed Fund (PSF) Program, Policies and Practices Direction No. 1 of 2001, which will now be referred to as the Existing Direction. This amendment, titled the Pre-Seed Fund (PSF) Program, Policies and Practices Direction No. 1 of 2003, seeks to redefine the terms “AusIndustry”, “eligible institution”, and “ineligible institution”, as well as to replace Clause 27 of the Existing Direction with new provisions (sections 4, 5, and 6). The purpose of these changes is to provide a clearer framework for determining which institutions and companies can qualify for funding under the Pre-Seed Fund Program. The Industry Research and Development Board is responsible for implementing these amendments, ensuring that the criteria for eligibility are met by both institutions and companies applying for funding. Eligible institutions, as per the new definitions, include institutions of higher education, certain government research organisations, Cooperative Research Centres, and any other entity that meets specific criteria set by the Board. Ineligible institutions include those controlled by state or territory governments, non-profit health and medical research centres, government business enterprises, and any other organisations that do not meet the eligibility criteria. Eligible companies, on the other hand, must be undertaking pre-seed R&D activities, be incorporated in Australia, be controlled by eligible institutions or qualifying researchers, use a significant portion of intellectual property owned by eligible institutions or researchers, have no sales revenues, and use the investment for R&D activities within Australia. Additionally, the company must not be a Cooperative Research Centre and must have the primary goal of commercialising its research outcomes. Failure to comply with the provisions of this direction could result in serious consequences for the parties involved. While the legislation does not explicitly state offences, penalties, or specific consequences for non-compliance, it is reasonable to infer that the Board has the authority to take appropriate action against entities that do not adhere to the amended criteria. This could include denying funding applications, revoking existing funding, or other administrative measures deemed necessary by the Board. Furthermore, entities found to be in breach of the direction's provisions may face reputational damage, loss of funding opportunities, or other indirect consequences that could impact their ability to conduct research and development activities. In summary, the Pre-Seed Fund (PSF) Program, Policies and Practices Direction No. 1 of 2003 amends the criteria for eligibility for funding under the Pre-Seed Fund Program, clarifying the types of institutions and companies that can qualify for support. The Industry Research and Development Board is tasked with ensuring compliance with these amended provisions, and while specific penalties are not outlined in the legislation, non-compliance could lead to the denial of funding, revocation of existing funding, or other administrative actions taken by the Board.