Commonwealth Numbered Regulations - Explanatory Statements

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Explanatory Statement

Statutory Rules 1999 No. 314

Issued by the Authority of the Minister for Industry, Science and Resources

Primary Industries and Energy Research and Development Act 1989

Energy Research and Development Corporation Repeal Regulations 1999

The purpose of the regulations is to abolish the Energy Research and Development Corporation (ERDC). Established in July 1990 under the Energy Research and Development Corporation Regulations (SR 1990, No. 65), Section 8 of the Act, the ERDC played a role in advancing energy supply and use technologies. The ERDC provided a foundation for industry to take on a greater role in funding research in conjunction with other Government assistance.

The Government decided, in the context of the 1997-98 Budget, to wind down the ERDC. The decision was taken in the context of the severe fiscal difficulties facing the Government. The proposed abolition of the ERDC has been in the public domain since May 1997 affording adequate opportunity for comment by representative organisations.

Regulations to abolish the ERDC were approved by the Governor-General in Council on 4 February 1998 but were later disallowed by the Senate.

The Government has taken a number of initiatives aimed at providing strong and continuing R&D support for energy technology/services industries which will enhance the international competitiveness of Australia's energy sector. The Government's climate change package announced in November 1997 which provides support for development and commercialisation in the renewable energy area and includes:

*       $20m for a Renewable Energy Equity Fund providing venture capital on a 2:1 funding basis with industry;

*       $30m for a Renewable Energy Commercialisation Program for strategically important renewable energy technologies; and

*       $10m for a Renewable Energy Showcase Fund to support leading edge renewable energy projects.

The Government will continue to play a key role in funding energy R&D through CSIRO:

*       Energy and petroleum sectors in 1999-00 will receive funding of $45.7 million; and

*       Construction of a sustainable energy research and demonstration centre in Newcastle with an annual

*       budget of $11 million.

Other initiatives include the Cooperative Research Centre Program ($10.5 million for the renewable energy CRC) and the R&D Start program. The Government has also committed some $100-$200 million per year over the next 3 years in support of innovative, alternative energy supply and end-use options, as part of its new tax system related environmental package.

It has become more apparent with the passage of time that failure to repeal the regulation in early 1998 has meant that unnecessary expenses are being incurred in the maintenance of a Board and to meet the accountability requirements of the ERDC such as the production of annual reports. For example, the continued existence in law of the ERDC means at least $100,000 per annum ($80,000 for Directors' emoluments) is being added to the cost of administering the wind-down process. This is occurring despite all ERDC projects financial commitments being met and a limited. and declining level of activity as the affairs of the ERDC are being wound down.

The regulations to repeal the ERDC Regulations commence on gazettal.

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