Details of the Financial Framework (Supplementary Powers) Amendment (Defence Measures No. 1) Regulation 2016

 

Section 1 - Name

 

This section provides that the title of the Regulation is the Financial Framework (Supplementary Powers) Amendment (Defence Measures No. 1) Regulation 2016.

 

Section 2 - Commencement

 

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

 

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 are amended as set out in the Schedules to the Regulation.

 

Schedule 1 - Amendments

 

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 the Centre for Defence Industry Capability which will be funded from an appropriation to the Department of Defence.

 

New table item 166 establishes legislative authority for the Government to fund the Centre for Defence Industry Capability (CDIC), a key initiative of the 2016 Defence White Paper, as outlined in the 2016 Defence Industry Policy Statement.

 

The purpose of the CDIC is to provide strategic leadership for the defence industry sector, and to help build the capability and capacity of Australian industry to support the Australian Defence Force.  The CDIC will provide defence specific business advice and funding through three streams of activities: industry development; facilitating innovation; and business competitiveness and exports.

 

Delivered through the Department of Industry, Innovation and Science (DIIS), the CDIC is designed to help transform the Defence and industry relationship, and to fund new industry development, critical skilling and export programs, as well as facilitate access to Defence's new innovation programs for small to medium enterprises.  The launch of the CDIC is planned for late 2016.

 

 

The key roles of the CDIC will include:

*         providing advisory and facilitation services to defence sector enterprises to improve business management, skills development, innovation and access to export initiatives and international and domestic supply chains;

*         providing Capability Improvement Grants to defence sector enterprises to implement recommendations from advisory and facilitation services;

*         providing strategic advice to government and key sector stakeholders on the development of a sustainable defence industry in line with Australia's defence priorities; and

*         identifying strategic industry capability gaps and solutions (including through the Defence Industrial Capability Plan) and funding projects to address them.

 

The CDIC was announced on 8 March 2016 by the Prime Minister, the Hon Malcolm Turnbull MP; the Minister for Defence, Senator the Hon Marise Payne; and the then Minister for Industry, Innovation and Science, the Hon Christopher Pyne MP.  The media release is available at http://www.minister.defence.gov.au/2016/03/08/prime-minister-minister-for-defence-and-minister-for-industry-innovation-and-science-joint-media-release-the-centre-for-defence-industry-capability.

 

The CDIC is funded by the Department of Defence for up to $230 million over the decade to 2025-26.  Funding for the CDIC will come from Program 1.1: Strategic Policy and Intelligence, which is part of Outcome 1: Strategy.  Funding details for Program 1.1 are set out in Table 14: Cost Summary for Program 1.1 Strategic Policy and Intelligence in the Portfolio Budget Statements 2016-17, Budget Related Paper No 1.4A, Defence Portfolio at page 38.

 

The decision-maker for the CDIC will be the Program Delegate or an authorised delegate.  The Program Delegate is the DIIS general manager who is responsible for administering the CDIC.

 

The Program Delegate is authorised by the Minister for Defence Industry to make decisions in relation to the administration of the CDIC and to give directions to DIIS on the interpretation of the guidelines and other documents used in relation to the CDIC.  The Program Delegate must have regard to the 2016 Defence Industry Policy Statement and the CDIC's objectives when performing any function or making any decision in relation to the CDIC.

 

All grants will be undertaken in accordance with relevant legislation and policies, including the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Grants Rules and Guidelines.

 

There is a single set of eligibility criteria for all the advisory and facilitation services.  Applications for Capability Improvement Grants will be assessed on a continual basis with regard to four set criteria and not relative to the merits of other applications. 

 

Eligibility and assessment criteria will be available in the program guidelines which will set out the framework for the operation and administration of the CDIC including the granting component.  The guidelines will be published on the DIIS website at www.business.gov.au/cdic.

 

Successful applications for a Capability Improvement Grant will also be published on the DIIS website, in accordance with the Commonwealth Grants Rules and Guidelines.

 

Given the nature of funding under this item, there will be no merits review mechanism for appealing funding or expenditure decisions.  New applications for the same project (or similar project) will be accepted, but should include new or more information to address the weaknesses identified in the previous application.

 

Complaints can be lodged in three ways:

*         with the contact centre or by contacting the CDIC at www.business.gov.au/cdic;

*         if not satisfied with the way the complaint is handled, contact can be made with the Division Head, AusIndustry - Innovation Programmes (DIIS); or

*         with the Commonwealth Ombudsman.  There is no fee for making a complaint, and the Ombudsman may conduct an independent investigation.

 

Further information on the CDIC is available on the DIIS website at https://www.business.gov.au/cdic.

 

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 defence power (section 51(vi));

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

*         the incidental power (section 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 (Defence Measures No. 1) Regulation 2016

 

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 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 Regulation adds a new item to Schedule 1AB to establish legislative authority for the Government to fund the Centre for Defence Industry Capability (CDIC), a key initiative of the 2016 Defence White Paper, as outlined in the 2016 Defence Industry Policy Statement.

 

The purpose of the CDIC is to provide strategic leadership for the defence industry sector, and to help build the capability and capacity of Australian industry to support the Australian Defence Force.  The CDIC will provide defence specific business advice and funding through three streams of activities: industry development; facilitating innovation; and business competitiveness and exports.

 

The Minister for Defence Industry has portfolio responsibility for the CDIC.  The CDIC will be funded by the Department of Defence and delivered through the Department of Industry, Innovation and Science.

 

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