Details of the Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No. 1) Regulations 2017

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Agriculture and Water Resources Measures No. 1) Regulations 2017.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after registration 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 Schedules to the Regulations.

 

Schedule 1 - Amendments

 

Item 1 - In the appropriate position in Part 2 of Schedule 1AB (table)

 

This item adds a new table item 7 to Part 2 of Schedule 1AB to establish legislative authority for government spending on a grant to assist a state or territory government build a new biosecurity diagnostic facility in northern Australia.  The initiative will be administered by the Department of Agriculture and Water Resources.

 

A new diagnostic facility will improve biosecurity diagnostic capacity in northern Australia and assist the early detection of weeds and pests which could seriously impact on agricultural industries and trade by threatening Australia's vital international disease-free status.

 

The need for a new diagnostic facility in northern Australia was canvassed through the White Paper on Developing Northern Australia which identified that:

*         existing laboratory facilities have become redundant and diagnostic capability has been reduced significantly across northern Australia in the last decade;

*         the transportation of often sensitive and time-critical samples to southern facilities is costly and often delays critical diagnostic confirmation of pests and diseases; and

*         a new, modern facility is required to manage animal, aquatic and plant health biosecurity diagnostics.

 

The overarching aims of the initiative include:

*         improving biosecurity prevention and response activities within Australia;

*         minimising the cost and impacts of pests and diseases on Australia's economy, environment and community;

*         establishing Australia at the Asia-Pacific forefront of tropical biosecurity knowledge through collaborative training and specialised facilities located in northern Australia;

*         addressing the potential for increased hosts, vectors and pathways for biosecurity risk and increased biosecurity incidents associated with changing population profiles (human, animal, plant) to develop in northern Australia;

*         preventing animal, plant and human pests and diseases that enter through northern Australia from spreading and seriously affecting southern industries, businesses and communities; and

*         contributing to the assurance of importers of Australia's $37 billion agricultural exports of the valuable pest and disease-free status of Australia's produce.

 

Any commitment of funds will be contingent on majority co-investment by a state or territory government or another institution to construct new diagnostics infrastructure.  

 

Funding for the initiative of $3.5 million was included in the 2015-16 Mid-Year Economic and Fiscal Outlook as part of the measure 'Stronger Farmers, Stronger Economy - improvements to access premium markets' for a period of three years commencing in 2016-17.  Details are set out in Appendix A: Policy decisions taken since the 2015-16 Budget at pages 142 to 143.

 

The initiative is part of the package of measures to open up premium markets and strengthen Australia's agricultural competitiveness under the Government's White Paper on Agricultural Competitiveness and was included in the 2015-16 Mid-Year Economic and Fiscal Outlook.

 

The Modern Diagnostics - New Diagnostic Facility project that will be funded through the grant must meet the White Paper on Developing Northern Australia outcomes including:

*         the project must deliver new capacity through the construction of new infrastructure or by materially enhancing existing infrastructure;

*         in considering public benefit, preference will be given to projects which serve or have the capacity to serve multiple users and produce benefits to the broader economy and community beyond those of the project proponent;

*         the project is located in northern Australia; and

*         the Government will not be the majority funder of the new infrastructure.

 

Further information about the White Paper on Developing Northern Australia and grants provided to recipients is available on the Department of Agriculture and Water Resources' website at http://www.agriculture.gov.au/biosecurity/partnerships/northern-australia-biosecurity-framework and http://agriculture.gov.au/about/reporting/obligations/contracts.

 

The Deputy Prime Minister and Minister for Agriculture and Water Resources will be the decision-maker for the grant based on a suitable proposal and will announce funding decisions.  Details of all grants will be published on the Department of Agriculture and Water Resources' website at www.agriculture.gov.au.

 

The grant will be targeted and non-competitive.  Guidelines will be developed and provided to state and territory governments to help guide proposals to build a new diagnostic facility in northern Australia.

 

 

A merits review process is not applicable to the grant because this is a payment by the Commonwealth directly to a state or territory government.

 

Funding for this item will come from Program 2.1: Biosecurity and Export Services, which is part of Outcome 2.  Details are set out in the Portfolio Budget Statements 2016-17, Budget Related Paper No. 1.1, Agriculture and Water Resources Portfolio at page 42.

 

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

*         the grants to states power (section 96); and

*         the territories power (section 122).

 

Item 2 - In the appropriate position in Part 3 of Schedule 1AB (table)

 

This item adds a new table item 14 to Part 3 of Schedule 1AB to establish legislative authority for government spending on a grant to Grower Co-operative Limited to conduct studies to develop initiatives to improve efficiencies for the movement of grain along the supply chain from farms to the Port of Newcastle for export to other countries.  The activity will be administered by the Department of Agriculture and Water Resources.

 

The activity is a research and development project that will measure and validate a number of improvement initiatives for the Australian grain export sector associated with the following:

*         farm to loading facility delivery excellence - improving truck planning, scheduling and coordination, as well as direct truck-to-train loading starting in 2017 at Moree and Bellata;

*         improving planning and scheduling with the development of a Master Plan and a Master Train Schedule for the export grain supply chain; and

*         achieving loading facility to Port of Newcastle train delivery excellence - aimed at improving train cycle time performance, expanding export rail volumes and exploring more efficient train delivery unit models.

 

Funding of $100,000 was included in the 2016-17 Mid-Year Economic and Fiscal Outlook as part of the measure 'Community Infrastructure Projects - new announcements'.  Details are set out in Appendix A: Policy decisions taken since the 2016 PEFO at page 181.

 

On 23 June 2016, the Deputy Prime Minister and Minister for Agriculture and Water Resources, the Hon Barnaby Joyce MP, and the Member for Parkes, Mr Mark Coulton MP, announced the grant.

 

A non-competitive grant will be awarded, subject to the proposal and process meeting the requirements of the Commonwealth Grants Rules and Guidelines.  The Deputy Prime Minister and Minister for Agriculture and Water Resources will be the decision-maker for the grant.  Details of the grant including the name of the recipient and the amount and purpose of the grant will be published on the Australian Government Grants System at http://www.grants.gov.au.

 

Merits review is not considered appropriate due to the non-competitive, targeted and discretionary nature of the grant.  However, all general obligations to act fairly, including with probity, in the conduct of the grant process will be observed in accordance with the applicable legislative requirements under the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines.

 

Funding for this item will come from Program 1.10: Agricultural Resources, which is part of Outcome 1.  Details are set out in the Portfolio Additional Estimates Statements 2016-17, Agriculture and Water Resources Portfolio at pages 15, 17 and 29.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the trade and commerce power (section 51(i)) of the Constitution.

 

Item 3 - In the appropriate position in Part 4 of Schedule 1AB (table)

 

This item adds a new table item 197 to Part 4 of Schedule 1AB to establish legislative authority for government spending on the Leadership in Agricultural Industries Fund (the Fund).  The activity will be administered by the Department of Agriculture and Water Resources.

 

The objective of the Fund is to provide grant funding to national agricultural industry representative organisations for activities that develop their leadership capacity so that they are able to better advocate agricultural and rural issues to the Australian community, the government and other stakeholders.  The grants will help build the capacity of these organisations to lead the industry through transitional and structural adjustments that strengthen the long-term viability of the sector, as well as communicate with farmers on matters related to agricultural research and development levies.  

 

An open competitive grant process will commence in early 2017.  Grants will be made to national agricultural industry representative organisations to develop their elected officials, support organisational leadership development strategies and provide a pathway to fast track these initiatives.  Grants will be awarded through a selection process taking into account the funds available, potential recipients and suitable activities.  Eligibility will be based on applicants meeting the Fund's eligibility criteria. 

 

The program guidelines were provided to stakeholders and published on the Department of Agriculture and Water Resources' website in February 2017.  The Department will conduct information sessions for stakeholders at selected locations around Australia.  Small organisations will be encouraged to form a consortium so that they are better able to plan to develop broader industry activities.  These information sessions ahead of the application period will allow stakeholders more time to focus on the application and plan for internal processes such as a joint board meeting if required.

 

The guidelines and further information about the Fund are available on the Department of Agriculture and Water Resources' website at www.agriculture.gov.au/leadership-ag-fund and will be available on the proposed GrantConnect website at www.grants.gov.au. 

 

The grant round will be conducted using an online application form developed by the Department of Social Services as part of their Community Grants Hub.  All eligible applications will be assessed against the eligibility criteria by an assessment panel of three people.  The assessment panel will make recommendations to the Deputy Prime Minister and Minister for Agriculture and Water Resources who will make the final grant decisions. 

 

If there are not enough suitable applications to meet the Fund's objectives, the Deputy Prime Minister and Minister for Agriculture and Water Resources can, at his discretion, commission additional activities from applicants or from other organisations that support the objectives of the Fund.  Depending on the funds available, potential recipients and the activities, this may involve a multi-step process conducted by the Department of Agriculture and Water Resources.

 

Successful applicants will receive a single grant, with multiple milestone payments, for activities that may be delivered over three financial years.  The Fund will close on 30 June 2020.

 

Details of successful grant recipients will be published at http://www.agriculture.gov.au/about/reporting/obligations/grants-reporting-requirements.

 

There will be no independent merits review for grant decisions.  The decisions of the Deputy Prime Minister and Minister for Agriculture and Water Resources will be final in all matters, including the approval of grants and grant amounts.

 

Funding decisions in connection with the Fund will be made in accordance with the selection process outlined above and the applicable legislative requirements under the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines.

 

Funding of $5 million was included in the 2016-17 Mid-Year Economic and Fiscal Outlook under the measure 'Leadership in Agricultural Industries Fund - establishment' for a period of three years commencing in 2016-17.  Details are set out in Appendix A: Policy decisions taken since the 2016 PEFO at page 132.

 

The Fund is part of the election commitment 'The Coalition's Policy for a Stronger Agriculture Sector', released in June 2016, which is available at http://www.liberal.org.au/coalitions-policy-stronger-agriculture-sector.

 

Funding for this item will come from Program 1.12: Rural Programs, which is part of Outcome 1.  Details are set out in the Portfolio Additional Estimates Statements 2016-17, Agriculture and Water Resources Portfolio at page 132.

 

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

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

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

*         the taxation power (section 51(ii)); and

*         the quarantine power (section 51(ix)).

 

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 (Agriculture and Water Resources Measures No. 1) Regulations 2017

 

These Regulations are 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 programs specified in the Regulations.  Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs.  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. 

 

Schedule 1 to the Regulations amends Schedule 1AB to the FF(SP) Regulations to establish legislative authority for government spending on three initiatives which will be administered by the Department of Agriculture and Water Resources.

 

Funding will be provided for:

*         a grant of up to $3.5 million to assist a state or territory government build a new biosecurity diagnostic facility in northern Australia;

*         a grant of $100,000 to Grower Co-operative Limited to conduct studies to develop initiatives to improve efficiencies for the movement of grain along the supply chain from farms to the Port of Newcastle for export to other countries; and

*         the Leadership in Agricultural Industries Fund with $5 million for grants to national organisations that represent interests of agricultural industries to develop their leadership capacity to advocate agricultural and rural issues to the Australian community, the government and other stakeholders.

 

The Deputy Prime Minister and Minister for Agriculture and Water Resources has portfolio responsibility for these matters.

 

Human rights implications

 

The Regulations do not engage any of the applicable rights or freedoms.

 

 

Conclusion

 

These Regulations are compatible with human rights as they do not raise any human rights issues.

 

Senator the Hon Mathias Cormann

Minister for Finance