Details of the Financial Framework (Supplementary Powers) Amendment (Communications and the Arts Measures No. 2) Regulations 2018
Section 1 - Name
This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Communications and the Arts Measures No. 2) Regulations 2018.
Section 2 - Commencement
This section provides that the Regulations commence on the day after they are registered on the Federal Register of Legislation.
Section 3 - Authority
This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.
Section 4 - Schedules
This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.
Schedule 1 - Amendments
Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)
This item adds two new table items to Part 4 of Schedule 1AB to establish legislative authority for government spending on certain activities that will be administered by the Department of Communications and the Arts (the department).
New table item 295 establishes legislative authority for government spending on the Location Incentive Funding Program (the Program) to attract large-budget international film and television productions to film in Australia.
The Program was announced by the Minister for the Arts, Senator the Hon Mitch Fifield, the Minister for Foreign Affairs, the Hon Julie Bishop MP, and the Minister for Trade, Tourism and Investment, the Hon Steven Ciobo MP, on 4 May 2018.
The objective of the Program is to ensure that Australia remains competitive in attracting large-budget international film and television productions, thereby providing employment and opportunities for Australian cast, crew, post-production companies and other screen production service providers to work on these productions. The Program will support the Australian film and television industry's capabilities to help ensure its future viability.
The Program is expected to attract over $260 million a year in foreign expenditure that would not otherwise occur. Based on data from previous international productions that have filmed in Australia, this will support the direct employment of approximately 3,000 Australian cast and crew and utilise the services of approximately 6,000 Australian businesses each year. These businesses will include those directly related to screen production activity, as well as those delivering other products and services such as information technology, catering, transport and accommodation.
Large-budget international productions accessing funding under the Program will support Australia's film and television industry to continue building on its world-class reputation. By growing the skills and infrastructure of the industry, the Program will also strengthen Australia's capacity to produce high-quality cultural content for Australian audiences. It is anticipated that production work will occur across numerous states and territories in both metropolitan and regional areas, and that businesses around the country will benefit from the procurement of their services.
Funding of $140 million was included in the 2018-19 Budget under the measure 'Location Incentive Funding Program' for a period of four years commencing in 2019-20 ($35 million per year). Details are set out in Budget 2018-19, Budget Measures, Budget Paper No. 2 2018-19 at page 79.
The Program is expected to support two to three international productions each year during the funding period by providing grants of up to 13.5 per cent of qualifying Australian production expenditure (QAPE). These grants will operate alongside the Government's existing Location Offset component of the Australian Screen Production Incentive, which provides a tax rebate of 16.5 per cent of QAPE to Australian-based production companies managing large-budget international productions.
The Program is scheduled to open for applications from August 2018. Grant funding will be made available through an open, non-competitive selection process. Applications will be accepted at any time from the date the Program opens until it closes on 30 June 2023, or until funds are fully committed and expended. The merits of applications will be assessed against eligibility and assessment criteria to be detailed in the program guidelines, in addition to the requirement to meet the eligibility criteria for accessing the Location Offset tax incentive.
Applications that meet all eligibility criteria will be ranked by the department against the assessment criteria. Only applications that perform strongly against the assessment criteria will be recommended for funding to the decision-maker. If the Program is undersubscribed in one financial year due to a lack of competitive applications or delays related to supported productions, funding may be rolled over to the next year of the Program. Where supported productions do not reach completion, funding may be reallocated to another high-ranking application, or rolled over to the next year of the Program.
The Minister for the Arts will be the decision-maker for grant expenditure, and all relevant approvals will be subject to the Public Governance, Performance and Accountability Act 2013. Funding decisions will be made in accordance with the assessment process in the program guidelines, which will be developed in line with the Commonwealth Grants Rules and Guidelines 2017 and published on the department's website at www.arts.gov.au.
Due to the length of time that large-budget international productions take to complete, it is anticipated that the department would enter into funding agreements with Australian-based production companies managing such productions in the development phase. This would allow studios to plan ahead, providing greater certainty for the industry. Funding agreements will be developed to ensure compliance and reporting on all government objectives. As grant amounts are tied to QAPE, payments to grant recipients are expected to be made in the following financial year once production is complete. This would align the program administration with how the Location Offset tax incentive operates.
Information on funding decisions will be published at www.communications.gov.au/who-we-are/department/funding-reporting.
The decision to approve or not approve a grant application made by an eligible applicant under the Program will not be subject to any secondary or external merits review. The Program involves the allocation of finite resources ($35 million per year during the funding period). A merits review of a decision made in relation to one of the grant applications would affect other successful applicants. This is because if an original decision to decline an application were reversed on review, this would affect the funding to other successful grant recipients (and potentially prospective grant applicants).
In addition, the provision of merits review for decisions in relation to the grant applications under the Program would impact the timely creation of job opportunities in Australia and the commencement of filming international film and television productions in Australia.
An applicant who is dissatisfied about the handling of their grant application under the Program by the department will be able to lodge a complaint to the program manager for consideration. Persons who are otherwise affected by decisions or who have complaints about the Program will also have recourse to the department, in accordance with the department's Client Service Charter. Such complaints will be investigated under the department's complaints policy and procedures. Information on the Client Service Charter and the handling of complaints is available at www.communications.gov.au/who-we-are/department/client-service-charter. If the person is not satisfied with the outcome of the department's assessment or investigation of their complaint, the person will be able to contact the Commonwealth Ombudsman as a final recourse.
Funding for this item will come from Program 2.1: Arts and Cultural Development, which is part of Outcome 2. Details are set out in the Portfolio Budget Statements 2018-19, Budget Related Paper No. 1.3, Communications and the Arts Portfolio at pages 19 and 26.
Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:
* the communications power (section 51(v));
* the trade and commerce power (section 51(i));
* the external affairs power (section 51(xxix)); and
* the Commonwealth executive power and the express incidental power (sections 51(xxxix) and 61), including the nationhood aspect.
Communications power
Section 51(v) of the Constitution empowers the Parliament to legislate with respect to 'postal, telegraphic, telephonic and other like services'. The Program may provide funding for the preparation of television programs for television broadcast.
Trade and commerce power
Section 51(i) of the Constitution empowers the Parliament to make laws with respect to 'trade and commerce with other countries, and among the states.' The Program seeks to improve Australia's international trade competitiveness in the film and television industry.
External affairs power
Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to 'external affairs'. The external affairs power supports legislation with respect to matters or things outside the geographical limits of Australia. The Program aims to attract large-budget international productions to film in Australia.
Commonwealth executive power and the express incidental power, including the nationhood aspect
The express incidental power in section 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in it by the Constitution. Together with the executive power in section 61 of the Constitution, the express incidental power supports activities that that are peculiarly adapted to the government of a nation and cannot be carried out for the benefit of the nation otherwise than by the Commonwealth.
The Program is of national significance to the Australian film and television industry and seeks to attract international productions to film in a range of locations in Australia.
New table item 296 establishes legislative authority for government spending on the Indigenous Languages and Arts Program (the ILA Program). Under this program, funding is provided to assist Aboriginal and Torres Strait Islander peoples to access and participate in Indigenous cultures through languages and arts.
The ILA Program commenced in its current form in 2015-16 to support the revival, preservation and celebration of Indigenous languages and arts. At that time, longstanding Indigenous arts and culture programs (Indigenous Culture Support, Indigenous Languages Support, and the Indigenous Employment Initiative) were streamlined and consolidated into the ILA Program.
The Government has long acknowledged the intrinsic value of Aboriginal and Torres Strait Islander cultures for all Australians and Australia as a nation. Languages and arts form a large part of culture and are essential to the wellbeing and identity of Aboriginal and Torres Strait Islander peoples.
The ILA Program funds a diverse range of Indigenous-run and/or Indigenous community-supported language and arts projects. The ILA Program also funds a network of 22 Indigenous Language Centres across the country with responsibility for reviving and maintaining approximately 165 languages. Indigenous Language Centres coordinate local or regional language activities; develop and collect language resources; and act as a central repository for language data.
The purpose of the ILA Program is to support a professional, viable and ethical Indigenous languages and arts network that features strong participation and provides for economic opportunities for Aboriginal and Torres Strait Islander people. Funding is provided for a diverse range of Indigenous language and arts projects that contribute towards at least one of the following program objectives to:
* preserve, revive and maintain Indigenous languages by:
- facilitating activities that capture and preserve Indigenous language;
- promoting participation in Indigenous language teaching and learning; and
- developing Indigenous language resources, including utilising digital technology in an innovative and culturally sensitive manner;
* develop, produce, present, exhibit or perform a diverse range of traditional and contemporary Indigenous arts;
* support new and innovative forms of Indigenous expression through art; and
* support the transmission and development of Indigenous cultural heritage and knowledge through languages and arts projects.
The Government has provided approximately $20 million annually in funding for the ILA Program on an ongoing basis. Additionally, as part of the 2016-17 Mid-Year Economic and Fiscal Outlook, released on 19 December 2016, the Government provided a further $10 million in ILA grant funding over four years from 2016-17 to 2019-20 for eligible projects that specifically target the achievement of one of the ILA Program objectives which aims to develop Indigenous language resources, including utilising digital technology in an innovative and culturally sensitive manner (the objectives are set out in the ILA Program Guidelines 2017-18). Details are set out in the Mid-Year Economic and Fiscal Outlook 2016-17 under the measure 'Protecting, preserving and celebrating Indigenous languages' at page 140. This measure is part of the Government's commitment to closing the gap between Indigenous and non-Indigenous Australians.
Funding for the ILA Program of $91 million over four years from 2018-19 was included in the 2018-19 Budget and comes from Program 2.1: Arts and Cultural Development, which is part of Outcome 2. Details are set out in the Portfolio Budget Statements 2018-19, Budget Related Paper No. 1.3, Communications and the Arts Portfolio at page 26.
Funding under the ILA Program is distributed annually through two grant opportunities:
* a competitive grant opportunity open to all eligible organisations wishing to submit applications for languages and arts projects (the open round); and
* a restricted competitive grant opportunity for eligible organisations that have been invited to apply (the direct offer round).
Under the open round opportunity, funding is available on either a single year or two-year basis with a funding limit of $100,000 per year for each grant, and a maximum grant amount of $200,000 over two years.
Participation in the direct offer grant opportunity is by invitation only. Organisations invited under this grant opportunity are those that have:
* been previously funded by the Government for Indigenous language, Indigenous arts, or Indigenous culture projects;
* demonstrated capability in delivering successful projects of a higher strategic value; and
* demonstrated financial management and administrative stability over an extended period.
Individual projects under the direct offer grant opportunity may receive funding in the range of $150,000 to a maximum of $400,000 per year. Funding is available on either a single year or multi-year basis for up to a maximum of five years - a maximum grant amount of $2 million over five years.
These rounds open at the first quarter of the calendar year. In 2018, the rounds opened on 3 April 2018. Funding rounds are advertised and reported on GrantConnect (www.grants.gov.au).
Applicants for both streams apply against eligibility and assessment criteria as outlined in the ILA Program Guidelines, which have been developed in accordance with the Commonwealth Grants Rules and Guidelines 2017. The program guidelines, which include eligibility and assessment criteria for the program, are publicly available on GrantConnect.
Funding is administered by the department through funding agreements between the Commonwealth and organisations undertaking funded activities.
The Minister for the Arts (the Minister) is the decision-maker for grant expenditure under both streams, and all relevant approvals will be subject to the Public Governance, Performance and Accountability Act 2013 (the PGPA Act). Officers of the department will assess the applications received on their own merits against the assessment criteria and in accordance with the program guidelines, and make recommendations to the Minister on whether to approve a grant application. Funding decisions will be made objectively and in accordance with the assessment process set out in the program guidelines and applicable legislative requirements under the PGPA Act.
Applications that meet all eligibility criteria will be ranked against the assessment criteria. Only applications that perform strongly against the assessment criteria will be funded.
The Minister's decision is final in all matters, including:
· the approval of the grant;
* the grant funding amount to be awarded; and
* the terms and conditions of the grant.
The Minister will not approve funding if the program funding available across financial years will not accommodate the funding offer, and/or the application does not represent value for money. There is no appeal mechanism for decisions to approve or not approve a grant.
Information on funding decisions will be made publicly available at www.communications.gov.au/who-we-are/department/funding-reporting.
Funding decisions made in connection with the ILA Program are not considered appropriate for independent merits review. The Minister's decision to approve funding is based on the allocation of finite resources. With these limited available funds and more applications each year than can be met, only a proportion of suitable applications can be funded. A reviewed decision made in relation to one grant will also affect decisions in relation to all others.
Since its inception, the ILA program has been oversubscribed. In the 2017-18 open and direct offer rounds, 40 out of the 153 eligible applications were funded. A successful application for review by one service provider would require a reduction in funding to other service providers. This also presents a high risk that there would be significant delays or a reduction in services to be provided to communities.
In order to address accountability issues related to the exclusion of a merits review, the ILA Program design and assessment process places great emphasis on the administrative accountability for the grant decisions. This includes ensuring that:
* the processes of allocating funds are fair;
* the criteria for funding is made clear; and
* decisions are made objectively.
An applicant who is dissatisfied about the handling of their grant application under the ILA Program by the department will be able to lodge a complaint with the program manager for consideration.
Persons who are otherwise affected by decisions or who have complaints about the ILA Program also have recourse to the department, in accordance with the department's Client Service Charter, and such complaints would be investigated under the department's complaints policy and procedures. Information on the Charter and the handling of complaints is available at www.communications.gov.au/who-we-are/department/client-service-charter. If the person is not satisfied with the outcome of the department's assessment or investigation of their complaint, the person will be able to contact the Commonwealth Ombudsman as a final recourse.
Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the races power (section 51(xxvi)) of the Constitution.
Races power
Section 51(xxvi) of the Constitution empowers the Parliament to make laws with respect to 'the people of any race for whom it is deemed necessary to make special laws'.
The program will provide funding specifically for Indigenous persons and/or communities. Funding for activities relating to Indigenous languages and Indigenous arts will assist Indigenous persons and communities to access and participate in Indigenous cultural expression.
Commonwealth Numbered Regulations - Explanatory Statements