Details of the Financial Framework (Supplementary Powers) Amendment (2014 Measures No. 2) Regulation 2014

 

Section 1 - Name

 

This section provides that the title of the Regulation is the Financial Framework (Supplementary Powers) Amendment (2014 Measures No. 2) Regulation 2014.

 

Section 2 - Commencement

 

This section provides that the Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments. 

 

Section 3 - Authority

 

This section provides that the Regulation is made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 (FF(SP) Regulations) is amended as set out in the Schedule to the Regulation.

 

Schedule 1 - Amendments

 

Item 1 - Part 2 of Schedule 1AB (at the end of the table)

 

This item adds two new items to Part 2 of Schedule 1AB to establish legislative authority for Government spending for certain activities administered by the Department of Agriculture.

 

New table item 3 establishes legislative authority for the Australian Government to provide grants to a State or Territory for the provision of drought assistance via concessional loans to eligible farm businesses.

 

The Drought Recovery Concessional Loans Scheme will be administered by the States and Territories, with administrative oversight from the Department of Agriculture.  The scheme will make concessional loans available to eligible farm businesses that are in need of financial assistance and are experiencing severe and protracted drought conditions and other compounding business impacts; for example, the mid-2011 disruption to live cattle exports to Indonesia.  The scheme aims to accelerate the return of farm businesses to commercial viability.  Loans will be available to eligible farm businesses for drought recovery activities (as seasonal conditions allow) and associated expenses.

 

The Government has allocated approximately $100.0 million to the Drought Recovery Concessional Loans Scheme in 2014-15.  Funding beyond 2014-15 has not been determined.  Grants to the States and Territories will be made on the conditions imposed under section 32C of the Financial Framework (Supplementary Powers) Act 1997 (terms and conditions for grants).  The conditions imposed on the grants will establish the framework under which the States and Territories (or their delivery agencies) will be able to provide loans to eligible farm businesses.

 

The Drought Recovery Concessional Loans Scheme guidelines will be publicly available. State and Territory delivery agencies will assess each applicant's eligibility in accordance with the scheme guidelines.  An applicant's rights of appeal are outlined in the scheme guidelines and include an internal review of the decision within the State or Territory delivery agency and the option to engage the State or Territory Ombudsman, if applicable.

 

Payment of this grant will be made from Programme 1.11: Drought Programs, described in the Portfolio Budget Statements 2014-15, Budget Related Paper No. 1.1, Agriculture Portfolio at page 63.  Programme 1.11 comes under Outcome 1: More sustainable, productive, internationally competitive and profitable Australian agricultural food and fibre industries through policies and initiatives that promote better resource management practices, innovation, self-reliance and improved access to international markets.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the following powers of the Constitution:

*         grants to States power (section 96); and

*         grants to Territories power (section 122).

 

New table item 4 establishes legislative authority for the Government to provide grants of financial assistance to States and Territories to implement the Government's $20.0 million election commitment for a stronger biosecurity and quarantine system.  The Stronger Biosecurity and Quarantine Initiative will enable an early response to pest and disease incursions and strengthen Australia's biosecurity preparedness over four years from 2014-15 to 2017-18.

 

This initiative will allow resources to be deployed in the field and will provide access to experts across the country and internationally.  The programme will include on-shore, import and export activities under two broad elements: a rapid response function to assist with containing an incursion in its early stages, and a preparedness component to augment existing activities to aid early detection and response.  Funds will be flexibly allocated between response and preparedness activities depending on the number and scale of incursions requiring a response.

 

As part of the rapid response capability, the initiative is available to support State and Territory governments in the early stages of a response to pest and/or disease incursions.  This support can include:

*         deploying experts into the field to provide:

-        advice on the management of the incursion;

-        assistance with delimitation, surveillance and diagnostic services;

-        assistance in the development of response plans;

*         the purchase or hire of equipment required for a response; and

*         the provision of other services such as diagnostic services.

 

Experts may be sourced from the Department of Agriculture, State and Territory governments or individuals from non-government organisations including specialist researchers, emergency/incident managers and response staff with the required expertise.

 

The provision of support in the early stages of a response can assist the affected jurisdiction(s) to establish quarantine and containment to delimit the affected area.  Support in the initial stages of a response can limit the spread and establishment of a pest or disease and maintain the technical feasibility for eradication, prior to a national cost-shared response arrangement being agreed.

 

The rapid response element will not replace existing activities undertaken by States and Territories, but will be in addition to jurisdictional 'normal commitments' required in the initial stage following identification of a significant exotic or emerging pest or disease incursion.

 

Preparedness activities will enhance the capacity to respond to pest and disease incursions on a national level.  Support may be provided to State or Territory governments to undertake preparedness activities such as:

*         development of standard operating procedures;

*         training of personnel, including through practice exercises;

*         development and management of vaccine stores;

*         surveillance, including targeting of high-risk pathways;

*         development of data management, analysis and communications systems and capabilities;

*         contingency planning and the development of rapid-response tool kits;

*         reviewing the import risk analysis process and quarantine arrangements to better integrate science in quarantine decision-making; and

*         scanning of emerging issues in international markets.

 

Support decisions will be approved by the First Assistant Secretary, Sustainability and Biosecurity Policy Division.  All expenditure will be approved in accordance with subsection 23(3) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), after having regard to sections 15 and 21 of the PGPA Act and section 18 of the PGPA Rule.  The initiative will be administered by the Department of Agriculture.

 

Given the time critical or ad-hoc nature of activities that form part of this programme, there is no mechanism for appealing funding or expenditure decisions.

 

The Stronger Biosecurity and Quarantine Initiative funding will come from the Department of Agriculture Portfolio Budget Outcome 2: Safeguard Australia's animal and plant health status to maintain overseas markets and protect the economy and environment from the impact of exotic pests and diseases, through risk assessment, inspection and certification, and the implementation of emergency response arrangements for Australian agricultural, food and fibre industries.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the following powers of the Constitution:

*         grants to States power (section 96); and

*         grants to Territories power (section 122).

 

 

Item 2 - Part 4 of Schedule 1AB (at the end of the table)

 

This item adds seven new items to Part 4 of Schedule 1AB.

 

New table item 64 establishes legislative authority for the Government to support, and establish, Industry Growth Centres to enable action on key issues such as deregulation and/or regulatory reform, global value chains; skills and workforce development; and industry-research collaboration and commercialisation.

 

The Industry Growth Centres Initiative (the Initiative) is a key element of the Government's Industry Innovation and Competitiveness Agenda and was announced by the Prime Minister, the Hon Tony Abbott MP, and Minister for Industry, the Hon Ian Macfarlane MP, on 14 October 2014.

 

Funding of $188.5 million will accelerate the competiveness and productivity of high growth sectors through:

*         reducing regulatory costs on business;

*         providing global orientation by developing suppliers to take advantage of opportunities and/or address challenges related to domestic and global markets;

*         improving talent access by implementing skill strategies to develop the nation's workforces; and

*         improving interaction between business and research to adopt new processes and services and develop new products.

 

The Initiative will commence from 1 January 2015 and funding will initially focus on five key growth sectors, namely: food and agribusiness; mining equipment, technology and services; medical technologies and pharmaceuticals; advanced manufacturing; and oil, gas and energy resources.  Five not-for-profit companies specific to each sector, established as Industry Growth Centres, will be eligible for funding.  Individuals or service delivery suppliers will also receive funding in exchange for delivering services to support the Initiative.  

 

The decision-maker for grants made under the Initiative is the Minister for Industry (or his delegate).  Internal merits review is not applicable in respect of decisions made in relation to targeted funding, given the non-competitive nature of funding.  Where funds are allocated using a competitive selection process, such decisions are not considered suitable for merits review given the limited allocation of funding available.

 

Funding for this Initiative will come from Outcome 1: Enabling growth and productivity for globally competitive industries through building skills and capability, supporting science and innovation, encouraging investment and improving regulation; Programme 3: Encouraging Investment.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         trade and commerce power (section 51(i)); and

*         Commonwealth executive power and the express incidental power (sections 61 and 51(xxxix)).

 

New table item 65 establishes legislative authority for the Australian Government to provide funds to non-government external parties to support State and Territory governments in the early stages of a response to pest and/or disease incursions, and for activities to strengthen Australia's biosecurity preparedness.  This item would support the implementation of the Australian Government's $20.0 million election commitment for a stronger biosecurity and quarantine system.

 

Relevant activities under the Stronger Biosecurity and Quarantine Initiative are outlined in the details for new table item 4 in Part 2 of Schedule 1AB, which is described above at Item 1.

 

Support decisions will be approved by the First Assistant Secretary, Sustainability and Biosecurity Policy Division.  All expenditure will be approved in accordance with subsection 23(3) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), after having regard to sections 15 and 21 of the PGPA Act and section 18 of the PGPA Rule. The initiative will be administered by the Department of Agriculture.

 

Given the time critical or ad-hoc nature of activities that form part of this programme, there is no mechanism for appealing funding or expenditure decisions.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         quarantine power (section 51(ix)); and

*         Commonwealth executive power and the express incidental power (sections 61 and 51(xxxix)).

 

New table item 66 establishes legislative authority for the Government to fund a programme to assist, support and encourage access by farmers to a greater range of safe and effective uses of agricultural chemicals and veterinary medicines (agvet chemicals), consistent with the National Registration Scheme for Agricultural and Veterinary Chemicals.  The improvement of access to agricultural and veterinary chemicals is a 2013 election commitment. 

 

The Government has allocated $8.0 million over four years from 2014-15 to 2017-18 for this programme which will be administered by the Department of Agriculture.  

 

Access to safe and effective agvet chemicals is essential to Australian agricultural, fisheries, forestry and food industries, the community and the environment.  Some producers, particularly in speciality or emerging industries, have difficulty gaining safe access to the agvet chemicals they need.  Specialty industries include horticultural crops, herbs and spices, some pulse/grain, honey bee, aquaculture, live horse export and goat industries.  Larger industries face a similar problem managing uncommon or emerging pests and diseases.  These chemical access issues are often referred to collectively as the 'minor use problem'.

 

The programme will be administered by the Department of Agriculture.  Further information on this initiative is available on the Department of Agriculture's website.  The assistance available to farmers will:

*         establish a system to allow stakeholders to effectively share their priorities for agvet chemical use needs as a means of identifying opportunities to pool resources and inform chemical companies of the potential market;

*         establish a sustainable framework that addresses major barriers to ongoing access to agvet chemicals, including administrative or legislative reforms that can reduce barriers or improve incentives for chemical companies to register new agvet chemical uses; and

*         support generation of data needed to gain access to immediate critical chemical needs. Identification of these critical needs will be through a cross-industry forum involving relevant Research and Development Corporations, grower groups and agvet chemical companies.  Access to these specific uses will provide interim relief to users while longer term sustainable solutions are developed and implemented.

 

In Australia, before an agvet chemical can be sold or used, the Australian Pesticides and Veterinary Medicines Authority (APVMA) must register it.  In order for manufacturers to register products they are required to submit comprehensive data packages to the APVMA.  The costs for generating and collating such data are high.  Sometimes the opportunities to recover these costs are too limited for chemical companies to support investment in registering products for use.

 

Avenues exist for users to address their specific access needs where chemical companies choose not to register the use of a product in Australia.  This may be either via a permit from APVMA or as an allowed 'off-label' use authorised by some States and Territories.  However, permits issued by the APVMA still must be applied for with associated information and data that verify the proposed use will be effective and safe for humans, animals, plants and the environment.

 

Given the discretionary nature of the expenditure there will be no appeals mechanism in relation to funding decisions.

 

This initiative comes within Outcome 1 (more sustainable, productive, internationally competitive and profitable Australian agricultural, food and fibre industries through policies and initiatives that promote better resource management practices, innovation, self-reliance and improved access to international markets), Programme 1.10: Agricultural resources.  Details of funding provided are set out in Table 1.2, Part 1 of Portfolio Budget Statements 2014-15, Budget Related Paper No. 1.1, Agriculture Portfolio at page 19 (A Competitive Agriculture Sector - improved access to Agricultural and Veterinary Chemicals).

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         territories power (section 122); and

*         Commonwealth executive power and the express incidental power (sections 61 and 51(xxxix)).

 

New table item 67 would provide legislative authority for the Government to fund development of an online assessment platform for the delivery of the National Assessment Program, including the National Assessment Program - Literacy and Numeracy (NAPLAN) and other national sample assessments.

 

This proposal supports the Government's Student's First policy commitment for faster turnaround of NAPLAN results and moving as much of NAPLAN online as practicable.

 

The current legislative authority under table item 407.008 in Part 4 of Schedule 1AA to the FF(SP) Regulations specifies that the delivery of national assessments online, including NAPLAN, will be undertaken as a trial.  Given the known benefits of online testing, the Government is committed to moving the National Assessment Program online on an ongoing basis.

 

All funding decisions for this measure will be made in accordance with the Department of Education's Secretary Instructions and delegations on the expenditure of relevant monies as authorised under the Public Governance, Performance and Accountability Act 2013.  Funding will be provided to Education Services Australia, through a funding agreement which will comply with the Commonwealth Grants Rules and Guidelines.  As funding is being provided to Education Services Australia in recognition of its particular skills and familiarity with NAPLAN testing, the funding is not subject to external review.

 

Funding will be provided under the Department of Education's Outcome 2: Improved learning, and literacy, numeracy and educational attainment for school students, through funding for quality teaching and learning environments, workplace learning and career advice; Programme 2.3: Schools Support.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the communications power (section 51(v)) of the Constitution.

 

New table item 68 establishes legislative authority for the Government to provide funding to improve the capacity of established not-for-profit small business advisory service providers to deliver low cost small business advisory and information services under the Australian Small Business Advisory Services (ASBAS) Programme.

 

Funding of $24.6 million over four years was included in the 2014-15 Budget.  The funding will be used to support small business advisory service providers, boosting their productivity, and allowing them to better achieve their goal of supporting small businesses to improve their competitiveness and their capacity to commercially deal with corporations.

 

On 15 October 2014, the Minister for Small Business, the Hon Bruce Billson MP, announced the ASBAS Business Solutions 2014 funding round.  Under the current round, funding of up to $200,000 (GST excl) per year for three years will be provided to successful applicants to improve their capacity to deliver low-cost small business advisory and information services.  Successful applicants will be funded to improve their capacity to deliver five advisory streams to small business:

1.      Funding avenues and financial analysis;

2.      Building your business;

3.      Making the most of your talent and team;

4.      Management capabilities; and

5.      Digital engagement implementation.

 

Grants will be awarded by competitive funding rounds, with eligibility and selection criteria set out in Ministerial Guidelines.  An assessment panel will assess applications and make a recommendation to the Minister for Small Business.  Independently of the competitive merit-based funding rounds, a small number of grants may also be provided for National Interest projects at the discretion of the Minister for Small Business.

 

The ASBAS Programme will be open to established, not-for-profit small business advisory service providers, such as Registered Business Organisations.

 

ASBAS is unsuitable for merits review as the programme has limited funds and only a proportion of grant applications can be met.  An application for review would result in funding delays that would affect all grants under the programme, affecting the successful and timely provision of support for non-for-profit small business advisory service providers. Internal merits review is also not applicable in respect of decisions made in relation to targeted funding such as National Interest projects, given the non-competitive nature of funding.

 

Funding for the ASBAS Programme comes under Outcome 1: Enabling growth and productivity for globally competitive industries through building skills and capability, supporting science and innovation, encouraging investment and improving regulation; Programme 3: Encouraging Investment.  Details are described in the Portfolio Budget Statements 2014-15, Budget Related Paper No. 1.12, Industry Portfolio at page 54.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         corporations power (section 51(xx)); and

*         territories power (section 122).

 

New table item 69 establishes legislative authority for the Government to fund the extension of transitional support under the Community Assistance Support (CAS) programme to illegal maritime arrivals (IMAs) who are granted substantive temporary visas as they transition from immigration detention into the community.  The CAS programme, which is specified in item 417.016 of Schedule 1AA to the FF(SP) Regulations, has always comprised a transitional support component, and the Government determined to provide that component to IMAs once they were released from detention on temporary visas.  These were initially temporary protection visas, and following the disallowance on 2 December 2013 of the Migration Amendment (Temporary Protection Visas) Regulation 2013, other substantive temporary visas.  

 

This new item in Schedule 1AB is intended to clarify the legislative authority for funding for the transitional component of CAS for IMAs, irrespective of the type of temporary visa (bridging or substantive) that they are granted upon their release from immigration detention.

 

Further information about CAS can be obtained from the Department of Immigration and Border Protection's website: http://www.immi.gov.au/media/fact-sheets/64community-assistance.htm

 

This Programme is not considered suitable for merits review given the limited allocation of funding available and the facts firstly, that transitional support is only available on a short term basis; and secondly, that transitional support services are accessed by IMAs through the assistance of CAS service providers.  Adequate accountability for the Programme is maintained by departmental case managers who regularly assess IMAs and other CAS recipients against relevant case management and CAS eligibility criteria and guidelines, and engage (or disengage) the transitional support component of CAS as appropriate at relevant points in their immigration pathway.

 

Payments for CAS for individuals other than IMAs are made from Programme 3.1: Compliance Resolution and Community Care and Assistance, described at page 44 of the Portfolio Budget Statements 2014-15, Budget Paper No. 1.11 , Immigration and Border Protection Portfolio.  Payments for CAS for IMAs are made from Programme 3.1: Community Placements and Detention Services - Onshore, described at page 45 of the Portfolio Budget Statements 2014-15, Budget Paper No. 1.11 , Immigration and Border Protection Portfolio.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         aliens power (section 51(xix));

*         social welfare power (section 51(xxiiiA)); and

*         immigration and emigration power (section 51(xxvii)).

 

New table item 70 establishes legislative authority for the Australian Government to provide grants of financial assistance through the Tasmanian Jobs and Growth Package to fund projects aimed at supporting economic growth and diversification in Tasmania.

 

The Government allocated $106.0 million to the Tasmanian Jobs and Growth Package from 2013-14 to 2016-17.  Grants will be made on conditions imposed under the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines.

 

The Tasmanian Jobs and Growth Package is not a competitive grants programme.  Only projects identified by the Australian Government will be considered.  Grant details are publicly available in accordance with the Commonwealth Grant Guidelines.  The Government is providing one-off grant funding to a number of projects that have been selected by the Government, subject to them meeting the principle of value for money.  As a result, the establishment of these projects is not subject to external review.

 

The Tasmanian Jobs and Growth Package was announced by the Deputy Prime Minister and Minister for Infrastructure and Regional Development, the Hon Warren Truss MP on 23 October 2013. 

 

Funding for the programme is described in the Portfolio Budget Statements 2014-15, Budget Related Paper No. 1.13, Infrastructure and Regional Development Portfolio at page 77.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:

*         grants to States power (section 96);

*         races power (section 51(xxvi));

*         trade and commerce power (section 51(i));

*         territories power (section 122);

*         external affairs power (section 51(xxix));

*         social welfare power (section 51(xxiiiA));

*         communications power (section 51(v));

*         corporations power (section 51(xx)); and

*         Commonwealth executive power and the express incidental power (sections 61 and 51(xxxix)).

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Financial Framework (Supplementary Powers) Amendment (2014 Measures No. 2) Regulation 2014

 

This Regulation 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

 

Section 32B of the Financial Framework (Supplementary Powers) Act 1997 (the FF(SP) Act) authorises the Commonwealth to make, vary and administer arrangements and grants specified in the Financial Framework (Supplementary Powers) Regulations 1997 (the FF(SP) Regulations) and to make, vary and administer arrangements and grants for the purposes of programmes specified in the Regulations.  This is in response to the High Court's decision in Williams v Commonwealth (2012) 288 ALR 410.  Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programmes. 

 

These provisions were retained when the Financial Management and Accountability Act 1997 (the FMA Act) was amended by the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014, with effect from 1 July 2014.  This Act renamed the FMA Act as the FF(SP) Act, with a consequential change to the name of the Regulations supporting the renamed Act.  The FF(SP) Act applies to Ministers and the accountable authorities of non-corporate Commonwealth entities, as defined under section 12 of the Public Governance, Performance and Accountability Act 2013. 

 

The Regulation amends the FF(SP) Regulations to establish legislative authority in Schedule 1AB for the Australian Government to spend on the following grants or programmes relating to: 

 

*         providing grants to a State or Territory for the provision of drought assistance via concessional loans to eligible farm businesses that are in need of financial assistance and are experiencing severe and protracted drought conditions and other compounding business impacts (Agriculture portfolio);

*         implementation of a stronger biosecurity and quarantine system, including a rapid response capability and preparedness activities (Agriculture portfolio);

*         improving access by farmers to a greater range of safe and effective uses of agricultural chemicals and veterinary medicines (Agriculture portfolio);

*         the establishment of Industry Growth Centres to provide infrastructure for increased competitiveness and productivity for five high growth sectors; and improving the capacity of small business advisory service providers to deliver low cost small business advisory and information services (Industry portfolio);

 

*         the development of an online assessment platform for the delivery of the National Assessment Program, including the National Assessment Program-Literacy and Numeracy (NAPLAN), on an ongoing basis rather than on the current trial basis (Education portfolio);

*         the provision of transitional support to illegal maritime arrivals who are granted substantive temporary visas as they transition from immigration detention into the community (Immigration and Border Protection portfolio); and

*         funding projects under the Tasmanian Jobs and Growth Package to support economic growth and diversification in Tasmania (Infrastructure portfolio).

 

The items specified in Schedule 1AB are the responsibility of the relevant Minister who has portfolio responsibility for the matter.

 

Human rights implications

 

The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

 

This regulation is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

Senator the Hon Mathias Cormann

Minister for Finance