Details of the Financial Framework (Supplementary Powers) Amendment

(Prime Minister and Cabinet Measures No. 1) Regulations 2021

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet Measures No. 1) Regulations 2021.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after the instrument is 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

 

Financial Framework (Supplementary Powers) Regulations 1997

 

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

 

This item adds a new table item to Part 4 of Schedule 1AB to establish legislative authority for government spending on an activity that will be administered by the National Recovery and Resilience Agency (NRRA).

 

New table item 486 establishes legislative authority for government spending on the Black Summer Bushfire Recovery (BSBR) grants program.

 

The BSBR program is part of the Government's $2 billion National Bushfire Recovery Fund, which provides funding for programs and initiatives that support recovery in communities affected by the 2019-20 Black Summer Bushfires. The BSBR program will provide grants to community organisations and bushfire-affected local government areas (LGAs) and communities for economic, social and infrastructure projects that have benefit for the community. This grant funding aims to support the short to medium-term recovery needs of communities affected by the 2019-20 bushfires, and initiatives to increase the resilience of such communities against future bushfires.

 

The NRRA, which will have responsibility for the BSBR program, was established in response to the Royal Commission into National Natural Disaster Arrangements. The Royal Commission's report was tabled in the Parliament on 30 October 2020 (available at https://naturaldisaster.royalcommission.gov.au/publications/royal-commission-national-natural-disaster-arrangements-report).

 

The NRRA brings together the National Drought and North Queensland Flood Response and Recovery Agency and the National Bushfire Recovery Agency (NBRA). From 1 July 2021, the NRRA will incorporate the disaster risk reduction and recovery functions from the Department of Home Affairs, and will take on responsibility for management of the Rural Financial Counselling Service from the Department of Agriculture, Water and the Environment.

 

Grants under the BSBR program will be provided through an open competitive funding round, where applications will be assessed against eligibility and assessment criteria and against each other, to produce a ranked list of projects in meritorious order. Grant amounts will range from $20,000 to $10 million for projects across LGAs that were declared natural disasters as a result of the 2019-20 bushfires. These LGAs are located in Queensland, New South Wales, Australian Capital Territory, Victoria, South Australia and Tasmania.

 

The BSBR program will be delivered by the NRRA, through the Business Grants Hub (part of the Department of Industry, Science, Energy and Resources), rather than through varying processes across the impacted jurisdictions. This will provide a consistent and transparent approach to the grants, regardless of the applicant's location, and will also allow for cross-jurisdictional projects.

 

Eligible applicants could include community organisations, not-for-profit and charity organisations, small and medium-sized enterprises, local councils, Indigenous organisations and Aboriginal Land Councils, to help address remaining local and regional needs.

 

The BSBR program will allow for a broad range of projects that seek to address the impacts of the 2019-20 bushfires across the disaster recovery domains, with an emphasis on the economic, social and built environments. For example, grant funding may support new infrastructure or the betterment or extension of existing infrastructure, community wellbeing and development activities, industry and business development activities, which are directly related to recovery from the impact of the 2019-20 bushfires. Projects may also span multiple domains provided they have benefit for the community, for example, infrastructure that encourages social cohesion, and economic projects. Projects that are funded through alternative funding sources or that are unrelated to the 2019-20 Black Summer event will be out of scope of the BSBR program.

 

Proponents must demonstrate the community need for the project in the context of the impact of the bushfires in their area, and how their project will meet this need and provide benefits to the community. Project requirements include having a direct link to recovery from the 2019-20 bushfires, directly addressing community need, and being delivered within one or more disaster-declared LGAs.

 

Grants may not be used for business-as-usual activities or staffing, pre-construction and planning, business case development or the purchase of capital and plant, amongst other things, where it is not expenditure incurred as a direct cost to the agreed project. Full information about the eligibility and assessment criteria under the BSBR program will be included in the grant opportunity guidelines, which will be made publicly available shortly before the grant opportunity opens.

 

The requirements for grant applications will be proportionate to the amount of project funding sought, with lower value community-based projects having a lower administrative burden. The BSBR program will use templates developed by the Business Grants Hub and the Department of Finance and all relevant documents will be provided to proponents at the time of application.

 

To ensure funding is awarded in areas of greatest community need, the BSBR program will take a tiered apportionment approach. In consultation with states and territories, and informed by the available qualitative and quantitative data, each LGA has been assigned to either Category 1 (high impact/high need) or Category 2 (lower impact/lower need). Each category will be allocated a notional minimum funding amount for all LGAs within that category. There will be no guaranteed funding to LGAs. After projects have been assessed and ranked based on merit, the meritorious projects will be assigned to their relevant LGA until each LGA reaches its minimum threshold. This ensures that each LGA that has one or more projects assessed as meritorious is guaranteed to have their highest ranking projects funded up to a certain amount based on demonstrated community need. Once the threshold is reached, funds will then be awarded based on project ranking (regardless of LGA) until exhausted. Where an LGA has no suitable projects for funding, the funds will be redistributed based on project ranking until exhausted.     

 

The BSBR program will be administered in line with the Commonwealth Grants Rules and Guidelines 2017 (CGRGs) through the Business Grants Hub. The responsibilities of the Business Grants Hub will include receiving applications, checking eligibility, assessing and ranking applications against the selection criteria and against each other, making initial recommendations for funding, execution of grant agreements, and administration of funds and reporting. The Business Grants Hub will also allocate ranked projects to the relevant LGA until the minimum threshold is reached, and then allocate remaining projects (regardless of LGA) based on overall merit until the funding is exhausted. Grant payments will be made in instalments (other than for grants up to $50,000 which may be paid upfront), based on project milestones, and each project will use a standard grant agreement.

 

An assessment committee, chaired by the Coordinator-General of the NRRA and comprising representatives from relevant Commonwealth government entities and an independent committee member, will receive the rankings and initial recommendations from the Business Grants Hub and, based on their areas of expertise, prepare final recommendations for the Minister for Agriculture, Drought and Emergency Management (the Minister) as a final decision maker on the expenditure of Commonwealth funds. This will include consideration of overall balance and proportionality of funding allocations across LGAs. The assessment committee may recommend to the decision maker adjustments to the allocation of ranked projects across LGAs once the minimum threshold is reached, in order to ensure that there is no significant disproportionateness within each category while maintaining rankings within each LGA.  

 

The Coordinator-General, in preparing advice for the Minister, will advise the Minister of the relevant requirements of the Public Governance, Performance and Accountability Act 2013 and the CGRGs (as outlined in paragraph 4.6 of the CGRGs), including that the Minister must not approve proposed expenditure of relevant money unless satisfied, after reasonable enquiries, that the expenditure would be proper use of relevant money.

 

The GrantConnect website (www.grants.gov.au) will be used as the authoritative source of information about the BSBR program, including publication of the grant opportunity guidelines and final grant decisions. Information about the BSBR program may be replicated on the Business Grants Hub website (www.business.gov.au) and the NRRA website (www.recovery.gov.au), while referring applicants to GrantConnect as the authoritative source.

 

Successful projects will be announced by the Minister and relevant federal parliamentarians, once all grant selections are finalised. Announcements may be broken into several batches, pending analysis of the successful projects.

 

The BSBR program is designed to address community impacts of the 2019-20 bushfires, rather than benefit the interests of individuals. As such, decisions made in relation to the program are considered unsuitable for independent merits review on the basis that decisions are not directed toward the circumstances of particular persons.

 

Further, the BSBR program has a finite (capped) funding envelope, from which all potential claims for a share of the resource cannot be met. A decision made in relation to one grant would affect decisions in relation to all others. A review would only promote competition among community groups, may result in a reduction of funding to another applicant and there would be delays in channeling funds into meeting the bushfire recovery needs of the community.

 

The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 3.3 and 4.11 to 4.19 of the guide, What decisions should be subject to merit review?, respectively).

 

The BSBR program design is based on consultation with relevant Commonwealth, state and territory government agencies, and is informed by the NRRA's (and the NBRA's, prior to the establishment of the NRRA) regular and ongoing engagement with individuals, councils, businesses and not-for-profit organisations in bushfire-affected communities.

 

This engagement occurs directly through the NRRA's (and the NBRA's, prior to the establishment of the NRRA) regional support officers who work on the ground in communities, and also through the NRRA's regular forums with charities, peak bodies, state and territory officials, and industry representatives.

 

Feedback to date from bushfire-affected communities indicates that competitive grants programs can create tensions between communities due to a fear of 'missing out' on limited resources. This will be addressed by ensuring that all impacted communities that have one or more projects assessed as meritorious will have the opportunity to receive a minimum share of funding, broadly based on impact and need.

 

Feedback also indicates that community groups are concerned that many are not well equipped to develop grant applications that are competitive against councils and businesses, which they perceive as more experienced and better resourced to develop successful applications. Further, many communities are reporting 'grants fatigue'. This will be addressed by ensuring that applicants have access to practical help to develop and enter grant applications into the Business Grants Hub system, including inputting applications based on applications that have been unsuccessful in other grants programs. Support services will be procured under a separate arrangement and third party providers that deliver this assistance will be unable to submit applications themselves, and will not be involved in subsequent assessment or decision making processes. Grant opportunity guidelines will be made available ahead of the program start date in July 2021 to allow applicants additional time to prepare.

 

The program also responds to lessons learned in the delivery of the Local Economic Recovery program. This program was jointly funded by the Commonwealth and states, with delivery managed by states.

 

Funding of $280 million for the BSBR program was included in the 2021-22 Budget under the measure 'Building Australia's Resilience' for a period of three years commencing in 2021-22. Of this, around $275 million will be available for grants, with the remaining amount to cover administration and delivery of the BSBR program. Details are set out in Budget 2021-22, Budget Measures, Budget Paper No. 2 2021-22 at pages 65 to 67.

 

Funding for this item will come from Program 1.2: Australian Government Disaster & Emergency Financial Support, which is part of Outcome 1. Details are set out in the Portfolio Budget Statements 2021-22, Budget Related Paper No. 1.11, Prime Minister and Cabinet Portfolio at pages 253, 258 and 260.

 

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

*         the communications power (section 51(v));

*         the astronomical and meteorological observations power (section 51(viii));

*         the census and statistics power (section 51(xi));

*         the insurance power (section 51(xiv));

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

*         the race power (section 51(xxvi));

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

*         the express incidental power and the executive power (sections 51(xxxix) and 61), including the nationhood aspect;

*         the power to grant financial assistance to states (section 96); and

*         the territories power (section 122).

 

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 BSBR program may fund measures with respect to overseas or interstate trade and commerce, such as projects that promote economic recovery in fire-affected communities by encouraging interstate or overseas tourism to those areas.

 

Communications power

 

Section 51(v) of the Constitution empowers the Parliament to make laws with respect to 'postal, telegraphic, telephonic and other like services'.

 

The BSBR program may fund measures that are delivered through a relevant communication service. For example, it may fund the online delivery of courses designed to help businesses in affected communities recover from the disruption and financial losses caused by the bushfires.

 

Astronomical and meteorological observations power

 

Section 51(viii) of the Constitution empowers the Parliament to make laws with respect to 'astronomical and meteorological observations'.

 

The BSBR program may fund measures that relate to astronomical and meteorological observations, such as bushfire resilience measures involving the creation of early warning systems relying on meteorological observations.

 

Census and statistics power

 

Section 51(xi) of the Constitution empowers the Parliament to make laws with respect to 'census and statistics'.

 

The BSBR program may fund measures relating to these matters, such as research into bushfire recovery or resilience involving statistical collection and analysis.

 

Insurance power

 

The insurance power in section 51(xiv) of the Constitution empowers the Parliament to make laws with respect to 'insurance, other than State insurance; also State insurance extending beyond the limits of the State concerned'.

 

The BSBR program may fund measures to assist insurers and insurance customers in relation to the insurance of bushfire-related risks.

 

Social welfare power

 

The social welfare power in section 51(xxiiiA) of the Constitution empowers the Parliament to make laws with respect to the provision of certain social welfare benefits, including pharmaceutical benefits, sickness benefits and medical services.

 

The BSBR program may fund measures involving the provision of such benefits or services. For example, it may fund the provision of medical services to treat the mental health impacts of the bushfires upon residents of affected communities.

 

Race 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 BSBR program may fund measures that are designed specifically for the benefit of Indigenous people. For example, it may fund recovery measures focussed specifically on fire-affected Indigenous communities.

 

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 implementing Australia's obligations under international treaties to which it is a party.

 

Australia has obligations under the International Covenant on Economic, Social and Cultural Rights (ICESCR). In particular:

*         Article 2, which provides that the States Parties will undertake steps, particularly including adopting legislative measures, to achieve progressive realisation of the rights recognised by the ICESCR;

*         Article 6, which recognises 'the right to work' and requires the States Parties to 'take appropriate steps to safeguard this right’, including the implementation of 'programmes ... to achieve ... full and productive employment';

*         Article 12, which provides that the States Parties will recognise the right of everyone to the highest attainable standard of physical and mental health. The steps to be taken to fully realise that right include those necessary for:

o      the prevention, treatment and control of epidemic, endemic, occupational and other diseases, and

o      the creation of conditions which would assure to all medical service and medical attention in the event of sickness; and

*         Article 15, which recognises the right of everyone to 'take part in cultural life'. The steps to be taken to fully realise that right include those necessary for the 'conservation, the development and the diffusion of science and culture'.

 

The BSBR program may fund measures designed to fulfil Australia's obligations under the ICESCR. These might include, for example, initiatives to:

*         treat, prevent or manage mental or physical health conditions arising out of the impact of the bushfires in affected communities; or

*         preserve jobs and boost employment in affected communities; or

*         contribute to social recovery in affected communities by funding measures to restore those communities' cultural lives, such as musical and artistic projects and events designed to bring communities together.

 

Grants under the BSBR program may also be provided for the purposes of giving effect to Australia's obligations under the following international conventions:

*         the United Nations Framework Convention on Climate Change, particularly Article 4 (which, among other things, requires Parties to formulate, implement, publish and regularly update national programs containing measures to facilitate adequate adaptation to climate change);

*         the Kyoto Protocol to the United Nations Framework Convention on Climate Change, particularly Article 10 (which, among other things, requires Parties to formulate, implement, publish and regularly update national programs containing measures to mitigate climate change and facilitate adequate adaptation to climate change); and

*         the Paris Agreement, particularly Articles 7 and 8 (which, among other things, require Parties to:

o      build the resilience of socioeconomic and ecological systems in relation to the effects of climate change; and

o      enhance action and support with respect to loss and damage associated with the adverse effects of climate change).

 

Projects funded under the BSBR program may be directed at addressing and adapting to the impacts of climate change; for example, by mitigating increased risks of bushfire damage resulting from climate change.

 

Executive power and 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 the Parliament, the executive or the courts by the Constitution. Section 61 of the Constitution supports activities 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 2019-20 bushfires were an unforeseen natural disaster of immediate national significance, which caused significant damage to communities across Australia. Funding under the BSBR program will be directed at measures designed to address the short to medium-term impacts of those bushfires on affected communities nationwide, and to increase their resilience to future bushfire disasters of a similar nature.

 

Power to grant financial assistance to states

 

Section 96 of the Constitution empowers the Parliament to 'grant financial assistance to any State on such terms and conditions as the Parliament thinks fit'.

 

Section 96 grants may be made under the BSBR program.

 

Territories power

 

Section 122 of the Constitution empowers the Parliament to 'make laws for the government of any territory'.

 

Spending under the BSBR program may be directed at bushfire recovery or resilience projects that are undertaken in, or in relation to, a Territory.

 

 

 

 

 

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 (Prime Minister and Cabinet Measures No. 1) Regulations 2021

 

This disallowable legislative instrument 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 programs specified in the Regulations. Schedule 1AA and Schedule 1AB to the FF(SP) Regulations specify the arrangements, grants and programs. The powers in the FF(SP) Act to make, vary or administer arrangements or grants may be exercised on behalf of the Commonwealth by 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 Financial Framework (Supplementary Powers) Amendment (Prime Minister and Cabinet Measures No. 1) Regulations 2021 (the Regulations) amend Schedule 1AB to the FF(SP) Regulations to establish legislative authority for government spending on the Black Summer Bushfire Recovery (BSBR) grants program.

 

The BSBR program is part of the Government's $2 billion National Bushfire Recovery Fund, which provides funding for programs and initiatives that support recovery in communities affected by the 2019-20 Black Summer Bushfires. The BSBR program will provide grants to community organisations and bushfire-affected local government areas (LGAs) and communities for economic, social and infrastructure projects that have benefit for the community. This grant funding aims to support the short to medium-term recovery needs of communities affected by the 2019-20 bushfires, and initiatives to increase the resilience of such communities against future bushfires.

 

Grants will be provided through an open competitive funding round, with grant amounts to range from $20,000 to $10 million for projects across LGAs that were declared natural disasters as a result of the 2019-20 bushfires. These LGAs are located in Queensland, New South Wales, Australian Capital Territory, Victoria, South Australia and Tasmania.

 

Funding for the BSBR program of $280 million over three years from 2021-22 was included in the 2021-22 Budget. Of this, around $275 million will be available for grants, with the remaining amount to cover administration and delivery of the program.

 

The National Recovery and Resilience Agency in the Prime Minister and Cabinet portfolio has responsibility for the BSBR program.

 

Human rights implications

 

This disallowable legislative instrument engages the following rights:

*         the right to work - Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), read with Article 2;

*         the right to health - Article 12 of the ICESCR; 

*         the right to participate in cultural life - Article 15 of the ICESCR; and

*         the right to an adequate standard of living - Article 11 of the ICESCR.

 

Right to work

 

This disallowable legislative instrument engages Articles 2(1) and 6 of the ICESCR. Article 2(1) of the ICESCR provides that:

 

Each State Party to the present Covenant undertakes to take steps, individually and through international assistance and co-operation, especially economic and technical, to the maximum of its available resources, with a view to achieving progressively the full realization of the rights recognized in the present Covenant by all appropriate means ...

 

Article 6 recognises 'the right to work', and requires the States Parties to 'take appropriate steps to safeguard this right', including the implementation of 'programmes ... to achieve ... full and productive employment'.

 

The BSBR program may fund projects designed to preserve or boost employment in fire-affected areas. Projects funded under the BSBR program may also indirectly support the right to work by helping businesses to rebuild after the bushfires, thereby generating or preserving employment in affected communities.

 

Right to health

 

This disallowable legislative instrument also engages Articles 12(1) and (2) of the ICESCR, which relevantly provide as follows:

 

1.      The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

2.      The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for: [ ... ]

(c)      The prevention, treatment and control of epidemic, endemic, occupational and other diseases;

(d)     The creation of conditions which would assure to all medical service and medical attention in the event of sickness.

 

The BSBR program may fund initiatives that are designed to promote the right to health. This could include measures to treat, control or prevent the outbreak of disease in bushfire-affected communities, which might include the provision of medical facilities and other health infrastructure. It may also fund other initiatives to promote the right to health on a longer-term basis - for example, to treat, prevent or manage mental health conditions arising out of the impact of the bushfires in affected communities.

 

Right to participate in cultural life

 

Finally, this disallowable legislative instrument engages Article 15(1)(a) of the ICESCR, which protects the right of all persons to take part in cultural life. The United Nations Committee on Economic, Social and Cultural Rights has stated that culture encompasses 'ways of life, language, oral and written literature, music and song, non-verbal communication, religion or belief systems, rites and ceremonies, sport and games, methods of production or technology, natural and man-made environments, food, clothing and shelter and the arts, customs and traditions'.

 

In order for the right to be ensured, the States Parties must both refrain from interfering with the exercise of cultural practices and with access to cultural goods and services, and take positive action by ensuring preconditions for participation, facilitation and promotion of cultural life, and access to and preservation of cultural goods (see United Nations Committee on Economic, Social and Cultural Rights, General comment No. 21, paragraph 6).

 

Projects funded under the BSBR program may contribute to social recovery in affected communities by facilitating or promoting participation in cultural life. Such projects might include sporting or artistic events designed to bring communities together.

 

Other rights that may be promoted

 

The BSBR program is intended to support the funding of a broad range of bushfire recovery and resilience activities across the economic, social, infrastructure and environmental domains. As such, the rights affected by the program will depend on the subject matter of the individual grants approved under it. This, in turn, will depend on the recovery needs identified by particular communities.

 

However, projects funded under the BSBR program could potentially promote a range of other rights, such as the right to an adequate standard of living in Article 11(1) of the ICESCR. For example, the BSBR program may fund the replacement and improvement of fire-damaged infrastructure in a manner that improves the standard of living in affected communities.

 

Grants under the BSBR program will be designed for the benefit of fire-affected communities, and will not limit human rights.

 

Conclusion

 

This disallowable legislative instrument is compatible with human rights because it promotes the protection of human rights.

 

 

 

 

 

Senator the Hon Simon Birmingham

Minister for Finance