R & D Start Program (policies and practices of the IR&D Board) Direction No. 1 of 1996 (Amendment No. 1 of 1997)

Overview

The Industry Research and Development Act 1986, enacted by the Parliament of the Commonwealth of Australia, was introduced to promote and facilitate industry research and development activities. This Act addresses the gap in fostering innovation, commercialisation, and collaboration in research and development within Australian industry. The 1997 amendment to the R&D Start Program (policies and practices of the IR&D Board) Direction No. 1 of 1996, made by the Minister for Industry, Science and Tourism under subsection 20(1) of the Act, further refines the policy objectives and operational practices of the program. The amendment aims to foster greater commercialisation of research and development outcomes, increase finance sector funding for research and development and their commercialisation, and promote collaborative research and development activities within and between industry and research institutions. The amendment also specifies the interest rate on repayments for recoupable grants and adjusts the eligibility criteria for projects and applicants to better align with these objectives.

Scope and Application

The Industry Research and Development Act 1986 applies to entities involved in research and development activities in Australia, with a specific focus on promoting innovation and commercialisation. This legislation encompasses various entities such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO), universities, tertiary education institutions, Cooperative Research Centres, medical research institutes, and other organisations primarily funded by the Commonwealth or the states that have a substantial focus on research or conduct research and development as their main activity. The Act extends its reach nationally, impacting industries across Australia. The R&D Start Program, as amended, directs the policies and practices of the Industry Research and Development Board to foster greater commercialisation, increase finance sector funding for research and development, and promote collaborative research and development activities within and between industry and research institutions. Notably, the amendment specifies that the R&D Start Program no longer includes Graduate Based Research and Development Related Projects in Small to Medium Sized Enterprises, and removes the requirement for applicants to be registered as Australian research agencies under section 39F of the Act. Additionally, the amendment introduces interest charges on the balance of a recoupable part of a grant, set at a rate not exceeding 1.5 times the Bank variable small business loan rate.

Key Provisions

The primary sections of the Industry Research and Development Act 1986, as amended by the Direction No. 1 of 1996 (Amendment No. 1 of 1997), provide detailed policies and practices for the R&D Start Program. Section 3 expands the definition of 'research institution' to include entities such as the CSIRO, universities, and tertiary education institutions, among others, provided they are substantially focused on research or are primarily funded by government bodies with research as their main activity (s. 3). Section 5 modifies the policy objectives of the Board to include fostering commercialisation of research outcomes, increasing finance sector funding for research and development, and promoting collaboration between industry and research institutions (s. 5). Section 9 outlines specific requirements for projects, particularly focusing on Graduate Based Research and Development Related Projects in Small to Medium Sized Enterprises, requiring these projects to involve graduates and aim to create new linkages between companies and research institutions (s. 9). Section 10 updates the eligibility criteria for applicants, stipulating that they must be research institutions unrelated to the collaborating companies (s. 10). The Act imposes several obligations on the parties involved. The Innovation and Research and Development Board (IR&D Board) must consider the updated policy objectives when reviewing and approving projects. Research institutions and companies applying for grants must ensure that their projects meet the specified criteria, including the involvement of graduates and the establishment of new linkages between companies and research institutions. Additionally, the Act mandates that interest on the balance of a recoupable part of a grant must not exceed 1.5 times the Bank variable small business loan rate (s. 23A). Failure to comply with the provisions of the Act may result in civil or criminal consequences. While the specific penalties are not detailed in the legislative instrument, breaches of the Act can generally lead to financial penalties, revocation of grants, or other administrative actions as deemed appropriate by the Board. The exact nature and extent of these consequences would typically be determined based on the severity and impact of the breach. Overall, the amendments aim to enhance the effectiveness and focus of the R&D Start Program by aligning it more closely with the commercialisation and collaborative goals of the industry research and development sector.