EXPLANATORY STATEMENT
TEXTILE, CLOTHING AND FOOTWEAR SMALL BUSINESS PROGRAM DETERMINATION (AMENDMENT) 2011
General Outline
The $25 million Textile, Clothing and Footwear Small Business Program (TCF SBP) was announced in November 2003 as part of the Government’s TCF Post-2005 Assistance Package and has been in operation since 2005. The TCF SBP was reviewed as part of Professor Roy Green’s 2008 review of the Australian TCF Industries, Building Innovative Capability, and was subsequently retained by the Government when it announced its TCF innovation package in 2009.
Section 37ZJ of the Textile, Clothing and Footwear Investment and Innovation Programs Act 1999 (the Act) provides the funding for the TCF Small Business Program.
The object of the Program is to improve the business enterprise culture of TCF small businesses that do not qualify for assistance under the TCF (SIP) Scheme or the TCF Post-2005 (SIP) Scheme. It is a competitive and merit-based program with a maximum grant of $50,000 available for successful projects.
Purpose of Amendment
The Textile, Clothing and Footwear Small Business Program Determination 2005 is currently silent on a specific level of cash contribution from applicants per project. The proposed amendment to the Determination will formalise the cash contribution at a level not less than 25 per cent of eligible expenditure, demonstrating the applicant’s commitment to co-fund the project.
The second major change is the proposed introduction of a minimum business turnover level of $100,000. History has shown that applicants from businesses with a turnover of less than $100,000 have generally not been competitive in receiving TCF SBP funding. An additional unintended consequence is that relatively new companies with low turnovers have rushed their applications when it might have been best for them to address start up issues before seeking TCF SBP funding.
This amendment process also presents an opportunity to make a number of other minor technical amendments to the TCF SBP, including amendments consequential on the introduction of the Clothing and Household Textile (Building Innovative Capability) scheme 2010 (the “BIC scheme”).
Authority for the TCF Small Business Program
Section 37ZJ of the Act provides that the Department is responsible for administering the program, including but not limited to, determining the following:
- the recipients of payments, including the eligibility criteria;
- the amount of payments;
- the timing of payments; and
- the terms and conditions of payment.
Consultation
These proposed amendments to the Determination were foreshadowed with the Council of Textile and Fashion Industries of Australia, the Technical Textiles and Non-Woven Association, the Footwear Manufacturers Association of Australia, the Carpet Institute of Australia Limited, and the Australian Association of Leather Manufacturers and they were supportive of the changes.
The Office of Best Practice Regulation was also consulted and advised that a Regulatory Impact Statement is not required.
Financial Implications
The total amount available for the TCF Small Business Program is $25 million over ten-years. Funding commenced on 1 July 2006 and will end on 30 June 2016. The proposed amendment will not alter these arrangements.
TEXTILE, CLOTHING AND FOOTWEAR SMALL BUSINESS PROGRAM DETERMINATION (AMENDMENT) 2011
NOTES ON SECTIONS
- Name of Determination
This provision specifies the title of the legislative instrument as the Textile, Clothing and Footwear Small Business Program Determination (Amendment) 2011.
2. Commencement
This section provides that the Textile, Clothing and Footwear Small Business Program Determination 2005 commences the day after it is registered.
3. Amendment
This is the formal provision that provides for the amendment of the TCF SBP Determination as outlined in Schedule 1. It also provides that the amendments outlined in Schedule 1 are to apply to applications for funding made after the commencement of this Determination.
Schedule 1 Amendments
Item 1 Section 3 (Definition of Act)
The definition of Act is amended consequential on the amendments effected by the Textile, Clothing and Footwear Strategic Investment Program Amendment (Building Innovative Capability) Act 2010.
Item 2 Section 4.1
Updates the objective of the Program to include TCF small businesses that do not qualify for assistance under the Clothing and Household Textile (BIC) scheme.
Item 3 Subparagraph 8.1 (Eligibility Criteria)
Amends the eligibility criteria of the TCF SBP to exclude businesses who may have received assistance or are entitled to receive assistance under the BIC scheme as well as the TCF Post-2005 (SIP) scheme at the time the decision that the applicant is eligible for a grant is made.
Item 4 Subsection 8.2 (Eligibility Criteria)
Updates the eligibility criteria of the TCF SBP to require applicants to have had a turnover of not less than $100,000 in the year immediately before the financial year in which the application is made. This amendment will also require applicants to make a cash contribution to the project of not less than 25 per cent of the amount of eligible project expenditure.
Item 5 Subsection 9.1 (b) (Merit Criteria)
Inserts a new element into the merit criteria that allows the assessment panel to take in to account the value for money of the project to the Commonwealth. The ability of the project of being commenced and completed in a single financial year is amended to being commenced and completed within a 12 month period.
Item 6 Subsection 12.1 (Condition: grant agreement)
Currently, successful applicants have 30 days to enter into a grant agreement with the Commonwealth. This amendment will allow the Commonwealth to extend the 30 day time limit if it notifies the applicant in writing.