FINANCIAL FRAMEWORK (SUPPLEMENTARY POWERS) AMENDMENT (AGRICULTURE MEASURES NO. 1) REGULATIONS 2019 (F2019L01340) EXPLANATORY STATEMENT

Details of the Financial Framework (Supplementary Powers) Amendment (Agriculture Measures No. 1) Regulations 2019

Section 1 - Name

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Agriculture Measures No. 1) Regulations 2019.

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

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

This item adds eight new table items to Part 4 of Schedule 1AB to establish legislative authority for government spending on activities that will be administered by the Department of Agriculture (the department).

New table item 367 establishes legislative authority for Government spending on the Regional Agricultural Show Development Grants Program (the Program).

Regional showgrounds are vital community infrastructure and often used for other local events that bring communities together. However, showgrounds regularly face ageing infrastructure and expensive repair bills. The Program will support agricultural shows, which are an integral part of Australian culture, through grants to upgrade, maintain, purchase and build new showground infrastructure.

Funded activities will include:

* maintaining or upgrading existing showground infrastructure;

* constructing new showground infrastructure; and

* purchasing tangible infrastructure-related assets that will boost the capacity and sustainability of a regional show, or a number of regional shows across a particular state or territory.

The eligible expenditure will include, but is not restricted to, management and administration of the grant, including independent audit if required; labour; materials; professional services and project management.

Potential recipients who would be eligible to apply would include regional agricultural show societies who are members, or intend to become members, of Agricultural Shows Australia (ASA) or one of its state or territory members. Potential recipients will also need to meet the following conditions:

* the regional agricultural show society must conduct a regular agricultural show at a showground located in a defined regional area; and

* the show society can provide evidence that the entity with responsibility for the relevant showground and related showground infrastructure affected by the proposed project supports the application.

ASA member state peak bodies representing regional agricultural shows are also eligible to apply for state-wide grants for infrastructure or related projects.

Outcomes from the Program are expected to include:

* improved amenity of showground infrastructure to improve the experience of showground users and visitors;

* improved flexibility of use of showground infrastructure to increase the opportunity for it to be used for other events that bring the community together through the year;

* use of modern construction methods and materials that reduce ongoing maintenance and repair of infrastructure;

* reduced operational costs for events conducted at and using showground facilities; and

* greater variety of attractions to improve the ability of shows to attract visitors.

Grant funding is anticipated to be fully committed through a single round of funding, and funded projects would be expected to run for up to 14 months. An evaluation of the Program and its outcomes will be undertaken after the Program funding ends on 30 June 2021.

The department will deliver the Program through a grant process undertaken in accordance with the Commonwealth Grants Rules and Guidelines 2017. Grant funding will be delivered via a single competitive application round.

The grant opportunity guidelines will be published on the GrantConnect website at www.grants.gov.au. The administered grant components will be delivered by the department in conjunction with an appropriate government grants hub.

Grant applications will be assessed by an independent panel. The panel will assess all eligible applications against selection criteria in the grant opportunity guidelines. The panel will make recommendations on the merit of the applications. Grants will be approved by the Minister for Agriculture or a delegate in the department.

All expenditure for the program will be made in accordance with the Commonwealth Grants Rules and Guidelines 2017 and departmental guidelines. Spending decisions will be made public as required under the Commonwealth Grants Rules and Guidelines 2017 on the GrantConnect website at www.grants.gov.au.

It is proposed the grant funds will be allocated under a competitive selection process, with a finite allocation of funding available where only a proportion of eligible applicants may receive funding. Such decisions are not considered suitable for merits review. The remaking of a decision under merits review would necessarily affect funding already allocated to other parties and would delay the implementation of the program. Further information on review mechanisms, and how they will be dealt with, will form part of the grant guidelines.

Funding for the Program will be provided through the 2019-20 Appropriation Bills with $5 million in 2019-20 and $15 million in 2020-21.

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

* the territories power (section 122)

* the power to grant financial assistance to the States (section 96)

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

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

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

Territories power

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

The program may involve the Commonwealth providing grants of financial assistance for show grounds in the Territories.

Power to grant financial assistance to the 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'.

The program may involve the Commonwealth providing grants of financial assistance to the States.

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 will foster and encourage interstate and overseas trade and commerce by enabling the showcasing of new technology and promoting competition with prized livestock and produce.

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 international obligations under treaties to which it is a party.

Australia is a party to the International Covenant on Economic, Social and Cultural Rights (ICESCR). Article 15(1)(a) of ICESCR recognises the right of everyone 'to take part in cultural life'. Australia has committed, under art 2(1) of ICESCR, to 'take steps ... to the maximum of its available resources, with a view to achieving progressively the full realisation' of this right by all appropriate means.

Agricultural shows represent an integral part of Australian culture. The program will provide funding to upgrade, maintain and build new showground infrastructure.

Commonwealth 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 program will, for the benefit of the nation, provide funding directed at strengthening regional Australia and agricultural industries.

New table item 368 establishes legislative authority for government spending on the Agriculture Stewardship Package (the Package).

The Package aims to improve the way that farmers manage the natural resources underpinning agricultural production as a sustainable resource base to ensure ongoing production. Better management of natural resources will bring benefits to farmers and the community through increased productivity and resilience, and improve environmental outcomes such as increased biodiversity and ecosystem services like clean water.

Funding will be provided in three parts, as follows:

* Agriculture Biodiversity Stewardship Pilot Program to provide grants to encourage the adoption of improved biodiversity practices on farms;

* Agriculture Biodiversity Policy to set out the Government's vision on sustainable agriculture practices and biodiversity outcomes; and

* Australian Farm Biodiversity Certification Scheme Trial to provide a grant to the National Farmers' Federation to develop and trial a certification scheme to allow Australian farms to showcase best practice biodiversity management of natural resources.

Agriculture Biodiversity Stewardship Pilot Program

The Agriculture Biodiversity Stewardship Pilot Program will provide support through competitive grants to increase the adoption of sustainable practices to deliver business improvements to farms and biodiversity outcomes. Eligible grant activities may include planting of shelterbelts, improving whole of system farm management, improving ecology of farm dams or protection and improvement of areas with high conservation value. A monitoring and evaluation component will be adopted to determine if the pilot program is meeting its objectives, including demonstrated improvements to farm and biodiversity outcomes.

Agriculture Biodiversity Policy

The Agriculture Biodiversity Policy (the policy) will set out the Government's overarching vision on sustainable agriculture practices, including biodiversity outcomes. The policy will not mandate actions for land owners, but will encourage adoption of best practice management. The department will develop the policy in consultation with the Department of Environment and Energy, and agricultural and environmental stakeholders.

Australian Farm Biodiversity Certification Scheme

The Australian Farm Biodiversity Certification Scheme (the scheme) will be developed and trialled by the National Farmers' Federation. Funding of up to $4 million over three years from 2019-20 will be made available through a one-off ad hoc grant. On farm biodiversity assets include, but are not limited to, remnant native vegetation (including patches of forest, woodlands, shrublands and grasslands), native vegetation along rivers and creeks, wetlands and rocky outcrops, all providing habitat for native flora and fauna.

Funding will be used to engage a consultant to conduct desktop research into existing certification schemes, sustainability frameworks and best management practices; stakeholder consultation and assessment of farmer readiness and capacity to participate in a certification scheme; develop and trial a certification scheme; and provide a final report on findings to industry.

The trial of the scheme will allow farmers to showcase best practice management of natural resources and gain recognition from the community and other farmers for farming practices that improve biodiversity outcomes on and off the farm. It will also recognise a range of agricultural commodities produced, using sustainable farm practices, that deliver a range of biodiversity outcomes both 'on farm' such as increased species richness; and 'off farm' such as provision of habitat corridors.

Following the scoping work, the scheme will be trialled over 12 months, and will focus on participation by farmers producing a range of agricultural commodities, focussing on a particular geographic region or regions if necessary. This would ensure the scope of the scheme works in practise.

Where the department delivers the Agriculture Stewardship Package through grant processes, they will be undertaken in accordance with the Commonwealth Grant Rules and Guidelines 2017 (CGRG). Grant funding will be delivered via ad hoc and competitive grants processes to support the Agricultural Stewardship Package outcomes and objectives.

The program guidelines will be published on the GrantConnect website at www.grants.gov.au and the administered grant components will be delivered through the Department of Social Services' Community Grants Hub.

The department will be making a recommendation to the Minister for Agriculture of grant applicants to fund based on meeting program outcomes and objectives. Where open competitive grants rounds are used, an expert assessment panel may be used to assess all eligible applications on merit using the selection criteria as published in the grant guidelines. The panel will then make recommendations to the department on the merit of the applications. The department will then advise the Minister for Agriculture on the merit of the applications.

With regard to the $4 million grant to the National Farmers' Federation to develop and trial the Australian Farm Biodiversity Certification Scheme, the Minister for Agriculture has agreed to use a non-competitive grant process to select the National Farmers' Federation as the appropriate recipient. To meet outcomes for the purpose of the grant, the National Farmers' Federation will undertake the activities specified in the Grant Opportunity Guidelines for the Australian Farm Biodiversity Certification Scheme Trial.

The National Farmers' Federation is the peak body representing the interests of Australian farmers. With the National Farmers' Federation leading the development of the Certification Scheme Trial, the Australian Government can have confidence in their expertise, knowledge and standing in the agriculture industry to ensure it is successful. The National Farmers' Federation is able to:

* leverage its established networks and relationships including with the landholders and the agriculture industry it represents nationally, and draw on its existing resources to enable rapid implementation of the outputs and outcomes while ensuring integrity;

* facilitate the translation of practical outputs to enable widespread change through its proven record in outreach and extension work in rural communities; and

* work with rural and regional communities and landholders as a trusted organisation with a good reputation.

All final decisions for administered expenditure through departmental delivery of grants will be made by the Minister for Agriculture. Expenditure will be made in accordance with the CGRGs and departmental guidelines.

Spending decisions will be made public as required under the CGRGs on the GrantConnect website at: www.grants.gov.au.

Merits review is not applicable in respect of decisions made in relation to ad hoc or targeted funding given the non-competitive nature of the funding. While there will be no independent merits review for these grants, all general obligations to act fairly 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 2017.

Where funds are allocated under a competitive selection process, with a finite allocation of funding available only a proportion of eligible applicants may receive funding, such decisions are not considered suitable for merits review. The remaking of a decision under merits review would necessarily affect funding already allocated to other parties and would delay the implementation of the program. Further information on review mechanisms and complaints and how they will be dealt with will form part of the grant guidelines.

Funding of $34 million from 2019-20 to 2022-23 will come from the measure 'Agriculture Stewardship Package' for a period of four years commencing in 2019-20. Details are set out in the Portfolio Budget Statements 2019-20, Budget Related Paper No. 1.1, Agriculture and Water Resources Portfolio at pages 20 and 32.

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 territories power (section 122)

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

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

Territories power

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

The Agriculture Stewardship Package may involve the Commonwealth providing funding for projects and to organisations in the Territories.

External Affairs power

Australia is party to the Convention on Biological Diversity [1993] ATS 32. Article 6 provides that 'Each Contracting party shall, in accordance with its particular conditions and capabilities:

(a) Develop national strategies, plans or programmes for the conservation and sustainable use of biological diversity or adapt for this purpose existing strategies, plans or programmes ... .; and

(b) Integrate, as far as possible and as appropriate, the conservation and sustainable use of biological diversity into relevant sectoral or cross-sectoral plans, programmes and policies.

Measures enabled by the Agricultural Stewardship Package will include promoting the adoption of sustainable agricultural practices, improving biodiversity outcomes across Australia, and improving natural resource benefits from sustainable farming practices.

Australia is also party to the United Nations Convention to Combat Desertification in those Countries Experiencing Serious Drought and/or Desertification, particularly in Africa [2000] ATS 18.

Article 10 provides for national action programmes that 'identify factors contributing to desertification and practical measures necessary to combat desertification and mitigate the effects of droughts' (Article 10(1)). This relevantly includes measures in priority fields of 'sustainable management of natural resources; sustainable agricultural practices; [and] development and efficient use of various energy sources' (Article 10(4)).

Measures enabled by the Agricultural Stewardship Package will include promoting the adoption of sustainable farming practices.

Commonwealth executive power and express incidental power, including the nationhood aspect

The Agriculture Stewardship Package will, for the benefit of the nation, take a national approach to the promotion and adaption of sustainable agricultural practices and improvement of biodiversity outcomes across Australia.

New table item 369 establishes legislative authority for government spending on the Educating Kids about Agriculture initiative (the initiative).

The initiative will provide opportunities for young Australians to engage with the agricultural sector about the contribution and future of farming to increase understanding of where our food and fibre come from, and the role and importance of agriculture to Australia's way of life, regional communities and the economy.

Funding will be allocated to two streams:

* Taking kids to farms

* Bringing the farm to kids.

Taking kids to farms

* Take government, Catholic and independent primary and secondary school students to farms and other primary production worksites.

* Host food and fibre 'mini classrooms' at major events, fairs or shows for groups of primary and secondary school students.

* Supplement farm and/or other primary production worksite visits with virtual technology or other 'in-class' experiences.

* Review and refresh, or develop, resources about food and fibre and the value of agriculture for use in the classroom.

Bringing the farm to kids

* Develop a practical integrated farming platform such as a mini farm or iFarm for kids in city and inner city schools to experience hands-on small-scale food production at school.

* Provide targeted teacher training and materials to support the integration of the iFarm with the curriculum.

* Provide virtual and augmented reality technology to bring farm experiences to classrooms.

* Provide class incursions, paddock-to-plate videos and apps, storybooks and music.

The expected outcome of the initiative is to provide kids with a hands-on, practical farm experience to gain a better understanding of where and how their food and fibre is produced, as well as the role and importance of agriculture to Australia's way of life, regional communities and the economy.

The initiative will be evaluated to measure how well the objectives and outcomes were achieved. The department may use information from grantee applications and reports for this purpose. The department may also interview grantees, or ask them for more information to evaluate how effective the program was in achieving its outcomes.

The department will deliver the initiative through a grant process undertaken in accordance with the Commonwealth Grants Rules and Guidelines 2017. Grant funding will be delivered via ad hoc and restricted competitive grants processes to support the initiative outcomes and objectives.

The guidelines will be published on the GrantConnect website at www.grants.gov.au and the administered grant components will be delivered through the Department of Social Services Community Grants Hub.

The department will be making recommendations to the Minister for Agriculture on the grant applicants to fund. Where restricted competitive grants rounds are used, an assessment panel (comprising representatives from the Commonwealth Departments of Agriculture and Education) may be used to assess all eligible applications on merit using eligibility and assessment criteria as published in the grant guidelines. The panel will then make recommendations to the department on the merit of the applications. The department will then advise the Minister on the merit of the applications.

All final decisions for expenditure will be made by the Minister for Agriculture. Expenditure will be made in accordance with the Commonwealth Grants Rules and Guidelines 2017.

Merits review is not applicable in respect of decisions made in relation to ad hoc or targeted funding given the non-competitive nature of the funding.

While there will be no independent merits review for such grants, all general obligations to act fairly 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 and Guidelines 2012.

Where funds are allocated under a competitive selection process, with finite allocation of funding available where only a proportion of eligible applicants may receive funding, such decisions are not considered suitable for merit review. The remaking of a decision under merits review would affect funding already allocated to other parties and would delay the implementation of the initiative. Further information on review mechanisms and complaints and how they will be dealt with will form part of the grant guidelines.

Funding of $2 million in 2019-20, $4 million in 2020-21, and $4 million in 2021-22 will be provided through the 2019-20 Appropriation Bills.

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 external affairs power (section 51(xxix)).

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 program will involve the delivery of information and services online, including through the use of virtual and augmented reality technology to bring farm experiences to classrooms, as well as the development of online educational platforms.

External affairs power

Australia is a party to the Convention on the Rights of the Child [1991] ATS 4 (CROC). Article 4 requires State Parties to 'undertake all appropriate legislative, administrative, and other measures for the implementation of the rights recognized in the Convention'. Article 28(1)(d) requires State Parties to '[m]ake educational vocational information and guidance available and accessible to all children'.

The program provides children with educational and vocational information and guidance in the areas of agriculture and food production.

New table item 370 establishes legislative authority for government spending on the National Farm Safety Education Fund (the Fund).

The Fund seeks to reduce on-farm fatalities and accidents and to ensure that the Australian agriculture, fisheries and forestry sectors become safer. From January to September 2018, there were 29 reports of on-farm deaths with tractors, utilities, quads and motorbikes most often implicated. The same period saw 120 non-fatal on-farm injury events, 16 of them involving children under 15 years of age.

Initially, funding will be provided to Farmsafe Australia via an ad hoc grant to:

* Review and update Farmsafe Australia's repository of farm safety awareness and guidance materials

* Modernise Farmsafe Australia's digital platforms

* Attend community events, including hosting booths and the provision of printed materials

* Secure the collection and analysis of Australian agricultural injury and fatality data

* Prepare an annual Safer Farms report to review the farm safety landscape and identify issues and trends that need to be addressed

* Prepare, or engage a third party to prepare a Farm Safety Education Fund Strategy - which would articulate ambitious targets for Fund investments.

This will allow Farmsafe Australia to: provide critical information to thousands of farm businesses and families; promote on-farm safety in a way that is relevant and resonates with farm businesses and families; and identify issues and trends and respond accordingly. Farmsafe Australia is a federated not-for-profit body whose mission is to drive efforts to enhance the wellbeing and productivity of Australian agriculture through improved health and safety awareness and practices.

Activities identified in the Farm Safety Education Fund Strategy will be eligible to be funded. Funding will be delivered via ad hoc, targeted and/or competitive grants processes with eligible parties likely to include rural Research and Development Corporations, industry and state farming organisations and Farmsafe Australia.

Funding will likely be provided to:

· Campaigns specifically targeted for, and to children, including farm dam and farm machinery safety - for example class incursions, videos and apps

* Campaigns specifically targeted to quad bike safety - including those related to the possible introduction of a mandatory product safety standard for quad bikes in Australia - for example, national media campaigns

* Increasing peer-to-peer activities with a focus on on-farm adoption and behaviour change - for example on-farm workshops

* Projects that tackle barriers to, and create, a safety culture.

The department has a close working relationship with industry groups and the issue of farm safety is discussed regularly. In developing the Fund, the department has consulted with the National Farmers' Federation, Farmsafe Australia, the Attorney-General's Department and Safe Work Australia on the delivery mechanism for the Fund and the activities the Fund should support.

The Fund will be evaluated to measure how well the objectives and outcomes were achieved. The department may use information from Farmsafe Australia and grantee applications and reports for this purpose. The department may also interview Farmsafe Australia and grantees, or ask for more information to evaluate how effective the Fund was in achieving its outcomes.

The department will deliver the program through a grant process undertaken in accordance with the Commonwealth Grants Rules and Guidelines 2017. Grant funding will be delivered via ad hoc, targeted and/or competitive grants processes to support the program outcomes and objectives.

The department will be making recommendations to the Minister for Agriculture on the grant applicants to fund based on meeting program outcomes and objectives. Where open competitive grants rounds are used, an assessment panel may be used to access all eligible applications on merit using selection criteria as published in the grant guidelines. The panel will then make recommendations to the department on the merit of the applications. The department will then advise the Minister on the merit of the applications.

All final decisions for expenditure will be made by the Minister for Agriculture. Expenditure will be made in accordance with the Commonwealth Grants Rules and Guidelines 2017 on the GrantConnect website at www.grants.gov.au.

All information relating to the availability, application process and outcomes of availably grants will be made publicly available in accordance with the Commonwealth Grants Rules and Guidelines 2017 on the GrantConnect website at www.grants.gov.au.

Merits review is not applicable in respect of decisions made in relation to ad hoc or targeted funding given the non-competitiveness nature of the funding. Farmsafe Australia has been selected given its role as the federated body representing agencies with a common interest in agricultural health and safety.

While there will be no independent merits review for this grant, all general obligations to act fairly 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 2017.

Where funds are allocated under a competitive selection process, with finite allocation of funding available where only a proportion of eligible applicants may receive funding, such decisions are not considered suitable for merits review. The remaking of a decision under merits review would affect funding already allocated to other parties and would delay the implementation of the initiative. Further information on review mechanisms and complaints and how they will be dealt with will form part of the grant guidelines.

Funding of $0.5 million in 2019-20, $1 million in 2020-21, $1 million in 2021-22, and $1 million in 2022-23 will be provided through the 2019-20 Appropriation Bills.

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 express incidental power (section 51(xxxix)) and the executive power (section 61)

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

Executive power and express incidental power

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. The executive power of the Commonwealth in section 61 of the Constitution extends to a range of matters, including:

* activities that form part of the ordinary and well-recognised functions of government; and

* the execution and maintenance of the Constitution, and the laws of the Commonwealth.

The program will provide funding for the creation of a strategy to inform investments under the Farm Safety Education Fund. The program may also involve spending on the collection and analysis of farm-accident data. The program may also provide funding for educational initiatives relating to changes in quad-bike safety requirements as a result of a proposed safety standard to be issued under the Competition and Consumer Act 2010.

Communications power

Section 51(v) of the Constitution empowers the Parliament to make laws with respect of 'postal, telegraphic, telephonic and other like services'. The program may involve delivery of online information and services to support and develop a culture of proactive on-farm safety.

New table item 371 establishes legislative authority for government spending on a Grant to Dairy Australia Limited.

Funding will be provided via an ad hoc grant to Dairy Australia Limited to:

* Develop a Margin Comparison Calculator - a tool to enable farmers to make more informed judgements about which processor's payment structure is best aligned to their production system, rather than solely pursing higher farmgate milk prices.

* Broaden the functionality of the Margin Comparison Calculator and education programs to promote the uptake of the Calculator among farmers.

* Develop and deliver other programs, as needed, to support business resilience, improved professionalism and risk planning. For example, Dairy Australia already have a suite of other 'farm business management' tools for dairy farmers that could be further developed and/or delivered to more dairy farmers.

The Margin Comparison Calculator will be a spreadsheet-based tool that allows farmers to capture their costs of production and compare them against different processors' payment structures. By doing so, farmers will gain a greater understanding of their own business model and profit margins and the type of payment structure that will best support their business model.

The functionality of the Marginal Comparison Calculator will be refined through use and feedback from initial users - dairy farmers. The aim is to secure widespread uptake by dairy farmers. Education programs will be developed to assist farmers' understanding of the calculator and interpreting its results and impact for their business. The calculator will be accessed through the Dairy Australia Limited website.

Dairy Australia Limited is the industry owned national service body for the dairy industry, funded by the Dairy Services Levy paid by farmers based on their milk production, and through Government matched payments for eligible research and development.

The department undertook consultation with Dairy Australia Limited in late June 2019 on the delivery of measures under this election commitment. A Margin Comparison Calculator and the delivery of programs to support business resilience, improved professionalism and risk planning were considered important tools in supporting dairy farmers in the context of "setting them up for the future".

Dairy Australia Limited undertakes research and development which contributes to the productivity and profitability of dairy farmers. A Statutory Funding Agreement is in place between the Commonwealth Government and Dairy Australia Limited for expenditure of Commonwealth matching funds for eligible research and development.

In 2016, the Commonwealth Government provided a grant of $500,000 to Dairy Australia Limited to assist dairy farmers with business planning, resilience and risk planning advice. The development of a Margin Comparison Calculator and the delivery of other programs in support of business resilience and risk planning, through this current measure, may build further on that investment.

The department will deliver the activity through a grant process undertaken in accordance with the Commonwealth Grants Rules and Guidelines 2017. Grant funding will be delivered via an ad hoc grant process to support the program outcomes and objectives.

All information relating to the availability, application process and outcomes of available grants will be made publicly available in accordance with the Commonwealth Grants Rules and Guidelines 2017 on the GrantConnect website at www.grants.gov.au.

Merits review is not applicable as there will be no competing applicants. The funding will be provided to Dairy Australia Limited to deliver the measures. Dairy Australia Limited has been selected given Dairy Australia Limited is the industry owned national service body for the dairy industry, funded by the Dairy Services Levy paid by farmers based on their milk production, and through Government matched payments for eligible research and development.

Funding of $0.5 million will be provided to Dairy Australia Limited over two years from 2020-21, as part of the measure Further Support for the Australian Dairy Industry.

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 territories power (section 122)

* the external affairs power (section 51(xxxix))

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

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

Trade and commerce power

Section 51(i) of the Constitution empowers the Parliament to make laws with respect of 'trade and commerce with other countries, and among the states'.

The Grant will support participants in the dairy industry that are engaged in interstate or overseas trade and commerce.

Territories power

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

The Grant may involve funding to Dairy Australia Limited for the benefit of dairy farmers in a territory.

External affairs power

Australia is a party to the International Covenant on Economic, Social and Cultural Rights (ICESCR). Australia has committed, under Article 2(1) of the ICESCR, to 'take steps ... to the maximum of its available resources, with a view to achieving progressively the full realisation' of rights under the ICESCR by all appropriate means. Article 11(1) of ICESCR recognises the right of everyone 'to an adequate standard of living ... including adequate food, clothing and housing, and to the continuous improvement of living conditions'. Article 11(2) of ICESCR recognises 'the fundamental right of everyone to be free from hunger' and Australia has committed, individually and through international co-operation, to measures to 'improve methods of production, conservation and distribution of food by making full use of technical and scientific knowledge, ... and by developing or reforming agrarian systems'.

The Grant will improve methods of production, conservation and distribution of dairy products by assisting dairy farmers in dealing with challenging conditions in the dairy market.

Executive power and express incidental power, including the nationhood aspect

The Grant will, for the benefit of the nation, support Australia's dairy industry deal with challenging conditions in the dairy market by improving dairy farmers' legal and financial literacy, and improving farm business's resilience, professionalism, risk planning and profitability.

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 Grant will fund the development and operation of a Margin Comparison Calculator, which will be delivered online.

New table item 372 establishes legislative authority for government spending on Grant to Australian Dairy Farmers' Limited.

Funding will be provided to Australian Dairy Farmers' Limited (the national policy and advocacy body for dairy farmers in Australia) via an ad hoc grant to:

* Investigate options to utilise blockchain technology (or other technologies) to enable quicker and more transparent, secure payments to dairy farmers by processors. This will include research and assessment of available and emerging technologies for 'real time' payments. Following investigation, a suitable technology may be trialled with a view to broader implementation.

* Design, develop and market test new milk pricing and trading concepts to give farmers more say over how they sell their milk. This could include selling to multiple suppliers and trade of future supply.

The traditional supply chain of milk from farmer to processor and processor to retailer provides few options for farmers to diversify or receive better price signals for their product. The activities to be undertaken by Australian Dairy Farmers' Limited are designed to provide selling options to farmers and to investigate quicker payment options for their product. Real time technologies such as blockchain, may prevent farmers having to wait for monthly milk cheques by allowing secure payment to be made closer to when the milk leaves the farm gate.

Current milk marketing follows an established model where farmers generally contract the sale of all of their milk to a single processor, generally for a 12 month period. In line with selling options available to other agricultural industries, Australian Dairy Farmers' Limited will investigate milk pricing and trading options for dairy farmers, including the capacity to sell milk to multiple processors, and potential to trade future supply. These will provide greater choice and flexibility to farmers. Examples of successful trading concepts in other industries include e-trading platforms and futures trading.

The department has undertaken consultation with Australian Dairy Farmers' Limited on these measures. Australian Dairy Farmers' Limited is the national policy and advocacy body for dairy farmers in Australia and has identified through ongoing consultation with farmers that these measures may support a more modern and competitive dairy industry going forward.

Merits review is not applicable as there will be no competing applicants. The funding will be provided to Australian Dairy Farmers' Limited to deliver the measures. Australian Dairy Farmers' Limited has been selected given its role as the national policy and advocacy body providing collective representation for dairy farmers in Australia.

Funding of up to $1.01 million will be provided comprising $0.45 million through the

2019-20 Appropriation Bills as part of the measure Further Support for the Australian Dairy Industry, and $0.56 million (marketing and trading platform) will be absorbed within the department's 2019-20 appropriation.

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

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 Grant will involve funding to support the development and operation of new payment, trading, marketing and information sharing platforms for the dairy industry that will be delivered via the internet.

New table item 373 establishes legislative authority for government spending on Package Assisting Small Exporters (PASE).

The PASE aims to improve market access for small exporters in the dairy, fish, eggs, grain, plant, horticulture, meat and animal product industries. It will provide grant funding to organisations and individuals for projects that support small exporters to overcome barriers to their participation in the export market.

Organisations and individuals will be invited to apply for funding for activities that address the program objectives and are relevant to one or more of the identified commodity sectors. The value and number of grants will be determined following consideration of applications and proposed projects.

Funding will be available for projects which assist small exporters to participate in the export sector and to take advantage of export opportunities. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) definition of 'small exporter' will be used:

1. annual revenue from export activities of less than $10 million for each registered establishment; and

2. less than $20 million total revenue for both domestic and export activities.

PASE is designed to assist small exporters (and potential small exporters) to respond to an increasingly complex international trading environment, which includes regulations regarding food safety and biosecurity conditions of trade. It also intends to improve small exporters' capability and readiness to take advantage of new trading opportunities, including opportunities available through Australia's free trade agreements.

Types of projects which may be funded include projects assisting small exporters to:

* Develop systems to meet the standards required by regulators and customers.

* Acquire market intelligence to allow exporters to target or tailor their products.

* Implement systems to perform procedural and administrative functions essential to exporting products.

* Develop innovative solutions to address technical barriers.

Examples of projects that have received funding under this program previously include:

* Citrus Australia developed an electronic export registration system for the Australian citrus industry.

* The South Australian Research and Development Institute researched rapid screening tools for shellfish toxins.

* The Abalone Council Australia Ltd undertook a project to resolve trade issues by establishing the necessary market intelligence and communication avenues through a seafood advisory group - Asia market access program.

The department will deliver the program through a grant process undertaken in accordance with the Commonwealth Grants Rules and Guidelines. Grant funding will be delivered following a competitive grants process to support program outcomes and objectives.

The department will be making a recommendation to the Minister for Agriculture of grant applicants to fund based on meeting program outcomes and objectives. An expert assessment panel comprising one member from each of the export industry consultative committees and a departmental officer will assess all eligible applications on merit using the selection criteria as published in the grant guidelines. The panel will then make recommendations to the department on the merit of the applications. The department will then advise the Minister for Agriculture on the merit of the applications.

All successful grants awarded will be published on the GrantConnect website at www.grants.gov.au in accordance with the Commonwealth Grants Rules and Guidelines 2017.

Merits review is not applicable. Where funds are allocated under a competitive selection process, with a limited allocation of funding available, such decisions are not considered suitable for merits review. The re-making of a decision under merits review would necessarily affect funding already allocated to other parties and would delay the implementation of the program. Further information on review mechanisms and complaints and how they will be dealt with will form part of the grant guidelines.

Funding of $6.1 million was included in the 2019-20 Budget under the measure Enhancing Australia Agricultural Trade for a period of four years commencing in 2019-20. Details are set out in Budget 2019-20, Budget Measures, Budget Paper No. 2 2019-20 at pages 47-48.

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

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 will foster and encourage overseas trade and commerce by enhancing the capability and readiness of small exporters (and potential small exporters) to engage in export activities. The program may include funding for projects which support small exporters to develop systems and functions to meet overseas export standards and to overcome technical barriers relevant to the export of their products.

New table item 374 establishes legislative authority for government spending on the Starting Farm Cooperatives Program (the Program).

The Program will assist farmers, fisheries and foresters to establish farm cooperatives and other collaborative business models - to enable them to take greater ownership along the supply chain to boost their bargaining positioning and deliver increased returns at the farm gate.

* Provision of financial support to farmers to establish new cooperatives.

* Promotion of educational materials and resources regarding farm cooperative business models - including those developed during the Commonwealth's $15.2 million Farm cooperatives and Collaboration (Farming Together) Pilot Program.

* Provision of financial assistance to farmers to fund fees for training courses relevant to farm cooperative business models.

* Provision of an advisory hotline in relation to farm cooperative business models.

* Delivery of information sessions, workshops and other events relating to farm cooperative business models.

* Development and implementation of an accreditation framework for educational providers for recognition of farmers' prior learning relating to farm cooperative business models.

In developing the Program, the department has consulted with the Business Council of
Co-operatives and Mutuals (as the peak body) on activities to support the establishment of farm co-operatives.

The department also considered the outcomes of the Farm Co-operatives and Collaboration (Farming Together) Pilot Program and the Senate Economics References Committee Report into Cooperative, Mutual and Member-owned Firms (2017), particularly Recommendation 6 (continued improvement to advice, guidance and information at all stages in the establishment, governance and regulation of co-operatives) and Recommendation 7 (Commonwealth Government to work with stakeholders to undertake a program of education and training to inform them about the role of co-operatives).

The use of innovative business models such as co-operatives, and other collaborative efforts along the supply chain, is important to reducing costs, improving production efficiencies and maximising farm gate returns. The Program provides an opportunity to leverage the significant public investment already made through the Farm Co-operatives and Collaboration (Farming Together) Pilot Program and is expected to be welcomed by agriculture, fisheries and forestry stakeholders.

The department will deliver the Program through a grant process undertaken in accordance with the Commonwealth Grants Rules and Guidelines 2017. Grant funding will be delivered via an ad hoc grants process to support the program outcomes and objectives.

The department will be making recommendations to the Minister for Agriculture on the grant applicants to fund based on meeting program outcomes and objectives.

All final decisions for expenditure will be made by the Minister for Agriculture. Expenditure will be made in accordance with the Commonwealth Grants Rules and Guidelines 2017.

Merits review is not applicable in respect of decisions made in relation to ad hoc or targeted funding given the non-competitive nature of the funding.

Funding of $1.5 million in 2019-20 and $1.5 million in 2020-21 will be provided through the 2019-20 Appropriation Bills.

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 student benefits aspect of the social welfare power (section 51(xxiiiA)).

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 will foster and encourage interstate and overseas trade and commerce, by providing education to farmers and advisers on business practices and assisting farmers in the conduct of their farm business.

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 Program will involve funding for an advisory service that will be delivered using a communication service (such as the telephone or internet).

Student benefits aspect of the 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 benefits to students.

The Program will involve funding for formal training courses for farmers and funding to develop an accreditation framework for recognition of prior learning.

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 Measures No. 1) Regulations 2019

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 FF(SP) 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.

The Financial Framework (Supplementary Powers) Amendment (Agriculture Measures No. 1) Regulations 2019 amend Schedule 1AB to the (FF(SP) Regulations to add eight new table items to establish legislative authority for government spending on certain activities that are administered by the Department of Agriculture.

The instrument adds the following new table items to Part 4 of Schedule 1AB:

* table item 367 for the Regional Agricultural Show Development Grants Program

* table item 368 for the Agriculture Stewardship Program

* table item 369 for Educating Kids about Agriculture

* table item 370 for the National Farm Safety Education Fund

* table item 371 for Grant to Dairy Australia Limited

* table item 372 for Grant to Australian Diary Farmers Limited

* table item 373 for Package Assisting Small Exporters

* table item 374 for Starting Farm Cooperatives.

Table item 367 - Regional Agricultural Show Development Grants Program

Table item 367 establishes legislative authority for government spending on the Regional Agricultural Show Development Grants Program.

During the 2019 election campaign, the Government committed to establish a $20 million Regional Agricultural Show Development Grants Program. Agricultural shows are an integral part of Australian culture. Regional showgrounds are vital community infrastructure and often used for other local events that bring communities together. However, showgrounds regularly face ageing infrastructure and expensive repair bills.

This new funding commitment will provide grants for activities such as:

* Maintaining or upgrading existing showground infrastructure

* Constructing new showground infrastructure

* Purchasing tangible infrastructure-related assets that will boost the capacity and sustainability of a regional show, or a number of regional shows across a particular state or territory.

Human rights implications - Regional Agricultural Show Development Grants Program

Table item 367 engages the right of all persons to take part in cultural life in Article 15(1)(a) of the International Covenant on Economic Social and Cultural Rights (ICESCR) as agricultural shows are an integral part of Australian culture.

Conclusion

Table item 367 is compatible with human rights because it promotes the protection of human rights.

Table item 368 - Agriculture Stewardship Package

Table item 368 establishes legislative authority for government spending on the Agriculture Stewardship Package.

The Agriculture Stewardship Package provides $34 million over four years from 2019-20, with funding provided for:

* the Agriculture Biodiversity Stewardship Pilot Program to provide grants to encourage the adoption of improved biodiversity practices on farms;

* the Agriculture Biodiversity Policy to set out the Government's vision on sustainable agricultural practises and biodiversity outcomes; and

* the Australian Farm Biodiversity Certification Scheme Trial to provide a grant to the National Farmers' Federation to develop and trial a certification scheme to allow Australian farms to showcase best practice biodiversity management of natural resources.

Human rights implications - Agriculture Stewardship Package

Table item 368 does not engage any of the applicable rights or freedoms.

Conclusion

Table item 368 is compatible with human rights as it does not raise any human rights issues.

Table item 369 - Educating Kids about Agriculture

Table item 369 establishes legislative authority for government spending on Educating Kids about Agriculture.

The Initiative will provide grants to increase children's understanding of where and how their food and fibre are produced; and the role and importance of agriculture to Australia's way of life, regional communities and the economy. The Initiative will involve two streams: taking kids to farms and bringing the farm to kids.

Human rights implications - Educating Kids about Agriculture

Table item 369 engages the right to education in Articles 28 and 29 of the Convention on the Rights of the Child (CROC). Article 28(1)(d) relevantly requires States Parties to 'make educational and vocational information and guidance available and accessible to all children'.

Activities in the initiative can be broadly characterised as being directed towards providing children with educational and vocational information and guidance in the areas of agriculture and food production.

Conclusion

Table item 369 is compatible with human rights as it does not raise any human rights issues.

Table item 370 - National Farm Safety Education Fund

Table item 370 establishes legislative authority for government spending on the National Farm Safety Education Fund (the Fund).

The Fund will provide funding to promote and support activities relating to on-farm safety in the agriculture, fisheries and forestry sectors. The Fund seeks to reduce on-farm fatalities and accidents and to ensure that the Australian agriculture, fisheries and forestry sectors become safer.

Funding will be provided to Farmsafe Australia via an ad hoc grant. Farmsafe Australia is a federated 'not-for-profit body whose mission is to drive efforts to enhance the well-being and productivity of Australian agriculture through improved health and safety awareness and practices.

Human rights implications - National Farm Safety Education Fund

Table item 370 does not engage any of the applicable rights or freedoms.

Conclusion

Table item 370 is compatible with human rights as it does not raise any human rights issues.

Table item 371 - Grant to Dairy Australia Limited

Table item 371 establishes legislative authority for government spending on the Grant to Dairy Australia Limited.

Funding will be provided to Dairy Australia Limited via an ad hoc grant to:

* Develop a Margin Comparison Calculator - a tool to enable farmers to make more informed judgments about their individual production systems and costs and which processor's payment structure is best aligned to their production system, rather than solely pursuing higher milk prices.

* Develop and deliver other programs, as needed, to support adoption of the calculator, business resilience, improved professionalism and risk planning.

Dairy Australia Limited through its ongoing consultation with farmers determined that these measures are a priority for the industry and will assist dairy farmers to better understand their business, profit margins and which processor's payment structure best suits their business model.

Human rights implications - Grant to Dairy Australia Limited

Table item 371 does not engage any of the applicable rights or freedoms.

Conclusion

Table item 371 is compatible with human rights as it does not raise any human rights issues.

Table item 372 - Grant to Dairy Australian Dairy Farmers Limited

Table item 372 establishes legislative authority for government spending on the Grant to Dairy Australian Farmers Limited.

Funding will be provided to Australian Dairy Farmers Limited via an ad hoc grant to:

Investigate options to utilise blockchain technology (or other technologies) to enable quicker and more transparent, secure payments to dairy farmers by processors. This will include research and assessment of available and emerging technologies for 'real time' payments. Following investigation, a suitable technology may be trialled with a view to broader implementation.
Design, develop and market test new milk pricing and trading concepts to give farmers more say over how they sell their milk. This could include selling to multiple suppliers and trade of future supply (similar to current trading in the grains, wool and cotton industries.

Human rights implications - Grant to Dairy Australian Farmers Limited

Table item 372 does not engage any of the applicable rights or freedoms.

Conclusion

Table item 372 is compatible with human rights as it does not raise any human rights issues.

Table item 373 - Package Assisting Small Exporters

Table item 373 establishes legislative authority for government spending on Package Assisting Small Exporters (PASE).

The PASE aims to assist small agricultural exporters to overcome technical barriers to their participation in the export sector and also improve their readiness to utilise opportunities to export provided by Free Trade Agreements.

The program is designed to assist small exporters (and potential small exporters).

Human rights implications - Package Assisting Small Exporters

Table item 373 does not engage any of the applicable rights or freedoms.

Conclusion

Table item 373 is compatible with human rights as it does not raise any human rights issues.

Table item 374 - Starting Farm Cooperatives

Table item 374 establishes legislative authority for government spending on Starting Farm Cooperatives.

Funding will be delivered via an ad hoc grant/s to an entity/ies to deliver the Program on behalf of the Commonwealth. The entity/ies will assist farmers establish farm cooperatives and other collaborative business models, including through financial support to farmers to establish new cooperatives; promotion of educational materials and resources regarding farm cooperative business models; financial assistance to farmers to fund fees for training courses relevant to farm cooperative business models; and information sessions, workshops and other events relating to farm cooperative business models.

The use of innovative business models such as co-operatives, and other collaborative efforts along the supply chain, is important to reducing costs and improving production efficiencies, growing the value of agricultural production and maximising farm gate returns.

Human rights implications - Staring Farm Cooperatives

Table item 374 broadly engages the right of everyone to be free from hunger in Article 11 of the International Covenant on Economic, Social and Cultural Rights. Article 11(2)(a) relevantly requires States Parties to 'take measures, including specific programmes 'to improve methods of production, conservation and distribution of food by making full use of technical and scientific knowledge, by disseminating knowledge of the principles of nutrition and by developing or reforming agrarian systems in such a way as to achieve the most efficient development and utilization of natural resources''.

The program can be broadly characterised as being directed towards developing or reforming agrarian systems to achieve the most efficient development.

Conclusion

Table item 374 is compatible with human rights as it does not raise any human rights issues.

Senator the Hon Mathias Cormann

Minister for Finance

Commonwealth Numbered Regulations - Explanatory Statements