Attachment A

 

Details of the Financial Framework (Supplementary Powers) Amendment

(Infrastructure, Transport, Regional Development, Communications and the Arts Measures No. 2) Regulations 2023

 

Section 1 - Name

 

This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development, Communications and the Arts Measures No. 2) Regulations 2023.

 

Section 2 - Commencement

 

This section provides that the Regulations commence on the day after registration on the Federal Register of Legislation.

 

Section 3 - Authority

 

This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.

 

Section 4 - Schedules

 

This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.

 

Schedule 1 - Amendments

 

Financial Framework (Supplementary Powers) Regulations 1997

 

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

 

This item adds one new table item to Part 3 of Schedule 1AB to establish legislative authority for government spending on a certain activity to be administered by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts
(the department).

 

New table item 69 establishes legislative authority for the Government to provide a grant to The National Institute of Dramatic Art (NIDA) for repairs, maintenance and improvement of the Commonwealth-owned building at 215 Anzac Parade in Kensington, New South Wales, which is occupied by NIDA.

 

NIDA is a public company limited by guarantee and is a tertiary institution providing qualifications for gifted young people for careers in the performing arts including theatre, film and television, as actors, directors, designers and production/technical staff. NIDA has received funding support from the Government since 1959 and is one of seven national performing arts training organisations funded through the Arts and Cultural Development Program to provide world-class training and career pathways for Australia's best performing arts and production talent.

 

The Government funded the construction of a purpose-built building for NIDA at 215 Anzac Parade in Kensington, New South Wales which was opened in 2001. The Capital Works Expenditure Program was established to provide NIDA with capital works funding of approximately $1.8 million per year for the maintenance and upkeep of the building, which continues to be owned by the Government. The grant to NIDA will continue to fund capital works expenditure.

 

The funding supports the Government to achieve its arts and culture policy objectives by promoting artistic excellence, artistic integrity and respect for artistic freedom through support for the provision of world-class training and development opportunities across a range of art forms. Specifically, the objective of the grant is to facilitate effective and efficient ongoing repairs, maintenance and improvement of NIDA's building identified by an agreed five-year forward plan and budget forecast. The intended outcomes of the funding are to:

*         prolong the NIDA building's useful life to ensure its continued viable use in meeting NIDA's strategic plan and policy directions; and 

*         create and maintain the best possible environment for learning and training.

 

Funding is provided on an ongoing basis through a multi-year funding agreement. The funding can be used for costs that include, but are not limited to, property services, fire and security services, lighting, electrical, mechanical, and building works. NIDA must demonstrate that it is delivering outcomes against the objectives of the grant and eligible grant activities identified in the grant guidelines.

 

The grant to NIDA will be undertaken through a targeted, closed and non-competitive grants process and will be administered in accordance with the Commonwealth resource management framework, including the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Commonwealth Grants Rules and Guidelines 2017 (CGRGs).

Information about the grant, including grant opportunity guidelines, will be made available on the GrantConnect website (www.grants.gov.au), and the grant will be administered using SmartyGrants, under licence by the department.

 

The Minister for the Arts will approve the grant opportunity guidelines and the allocation of grant funding.

 

Following approval, NIDA is required to enter into a legally binding grant agreement to deliver the agreed activity within defined terms and conditions. Payments are made after the funding agreement is signed by the recipient and the Commonwealth, and on receipt of a correctly rendered invoice and acceptance of progress reports outlining capital works undertaken in accordance with NIDA's five-year forward work plan.

 

Independent merits review of funding decisions made in connection with the grant would not be considered appropriate because the decisions relate to an allocation of a finite resource. Funding is provided to NIDA to support a specific purpose for the maintenance costs of the Commonwealth-owned building. The Administrative Review Council (ARC) has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.11 to 4.18 of the guide, What decisions should be subject to merit review? (ARC guide)).

 

In addition, the application and assessment processes put in place for the program ensures that the grant opportunity process is consistent with the CGRGs. According to the guidelines, the grant opportunity incorporates appropriate safeguards against fraud, unlawful activities and other inappropriate conduct.

 

Since the establishment of NIDA's Capital Works Expenditure Program, the Office for the Arts within the department, has sought and received ongoing feedback on the effectiveness of the program through six monthly progress reports submitted by NIDA. These reports demonstrate that the Commonwealth funding enables NIDA to appropriately maintain the
government-owned building.

 

Funding of approximately $1.8 million per year for this item is included in Program 6.1: Arts and Cultural Development, which is part of Outcome 6. Details are set out in Portfolio Budget Statements 2023-24, Budget Related Paper No. 1.12, Infrastructure, Transport, Regional Development, Communications and the Arts Portfolio at page 83. Funding to NIDA is ongoing.

 

Noting that it is not a comprehensive statement of relevant constitutional considerations, the purpose of the item references the express incidental power and the executive power
(sections 51(xxxix) and 61) of the Constitution, including the nationhood aspect.

 

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 involves funding to NIDA to maintain the Commonwealth-owned building in which it resides and provides support for a national initiative in the arts.

 

Item 2 - Part 4 of Schedule 1AB (table item 424, column headed "Objective(s)")

 

Table item 424 in Part 4 of Schedule 1AB establishes legislative authority for government spending on the Local Roads and Community Infrastructure (LRCI) Program, which is administered by the department.

 

Item 2 amends table item 424 by repealing paragraph (d) (first occurring) and substituting paragraph "(d) community infrastructure." in the column headed "Objective(s)". The amendment reflects the LRCI Program's broad scope of financial assistance to local government bodies and states and territories to support construction, maintenance or improvements of roads, associated facilities and community infrastructure spending.

 

Item 3 - Part 4 of Schedule 1AB (table item 424, column headed "Objective(s)")

 

Item 3 amends table item 424 by omitting "as a measure to support recovery from the adverse effects of the national crisis resulting from the coronavirus known as COVID-19." in the column headed "Objective(s)".

 

The amendment reflects the LRCI Program's shift in focus from COVID-19 economic stimulus to broader community infrastructure financial support. Funding under the LRCI Program will be available to local councils and other bodies who are responsible for the provision of local community services and infrastructure (local governments) to support construction and maintenance of, and improvements to, priority local road and community infrastructure projects across Australia.

 

Item 4 - Part 4 of Schedule 1AB (table item 424, column headed "Objective(s)")

 

Item 4 amends table item 424 by omitting the word "also" in the column headed "Objective(s)". The effect of this technical amendment to the operation provision is to align table item 424 with the current approach to referring to constitutional heads of power in table items in Schedule 1AB.

 

Item 5 - Part 4 of Schedule 1AB (table item 424, column headed "Objective(s)")

 

Item 5 amends table item 424 by inserting paragraph "(da) that are peculiarly adapted to the government of a nation and cannot otherwise be carried on for the benefit of the nation; or" before paragraph (e) in the column headed "Objective(s)". The amendment reflects that spending under the LRCI Program will also be supported by the implied nationhood power as there are funding activities which are directed at addressing the severe effects of the national crisis resulting from COVID-19.

 

The LRCI Program commenced in July 2020 and has delivered three phases of funding with the objective to provide economic stimulus to 550 local councils and unincorporated entities due to the impacts of the COVID-19 pandemic. A total of $2.5 million has been provided across the initial three phases of the LRCI Program since its commencement. These funds have supported around 9,500 infrastructure projects across Australia.

 

Additional funding of $750 million, which comprised $500 million to extend the delivery of Phase 3 and $250 million to support Phase 4 was provided in the 2022-23 Budget. The LRCI Program is due to deliver Phase 4 in July 2023, which aims to continue stimulating additional infrastructure construction activity in local communities across Australia. It is expected that local governments will, where possible, use local businesses and workforces to deliver projects funded by the program to ensure stimulus funding flows into local communities, thus supporting local jobs, businesses and procurement.

 

Phase 4 will operate in a similar way to Phases 1 to 3 where councils nominate local roads and infrastructure projects within a notional funding allocation. However, Phase 4 will include a new allocation of funding for non-urban councils to use on roads in rural, regional and outer-urban areas, unless as otherwise agreed with the department. This will ensure that councils with greater challenges around population, distance and financial sustainability receive proportionate support.

 

The LRCI Program will calculate a 'nominal funding allocation' in respect of each local government area based on a formula modelled on funding allocations under the Roads to Recovery Program and the local road component of the Financial Assistance Grants program.

 

The value of each eligible funding recipient's allocation for Phase 4 has been derived using the same funding model as Phase 3, based on recommendations from the relevant Local Government Grants Commission, which takes into consideration factors such as population estimates and road length in each local government area.

 

Each eligible funding recipient (generally, the local council responsible for the local government area) will receive a letter of offer to participate in Phase 4 of the LRCI Program, which will specify their nominal funding allocation. The eligible funding recipient must accept the offer and enter into a grant agreement with the Commonwealth to receive funding under the LRCI Program up to the nominal funding allocation amount.

 

Various requirements apply to the funding, including that:

*         grant money can only be used on:

o   eligible local road projects (involving the construction or maintenance of roads managed by local governments); and

o   eligible community infrastructure projects (involving the construction, maintenance and/or improvements to government-owned assets (including natural assets) that are for the direct use and benefit of the local community to the public);

*         the projects need to be additional to an eligible funding recipient's existing work plan;

*         construction activity on eligible projects must be undertaken between 1 July 2023 and 30 June 2025 (except where agreed in exceptional circumstances); and

*         reporting be provided, including on amounts spent, details of progress on projects and jobs supported by the funding, on a quarterly, annual and (where required) ad hoc basis.

 

The department will deliver the LRCI Program as a demand-driven (eligibility-based) grants program in accordance with applicable legislative requirements under the PGPA Act and the CGRGs.

 

Eligibility to be a funding recipient under the LRCI Program has been predetermined, and nominal funding amounts preallocated based on a formula, as set out in the grant opportunity guidelines (the guidelines), which have been approved by the Minister for Infrastructure, Transport, Regional Development and Local Government (the Minister). The Minister will also approve the recipients and their nominal funding amounts, and the terms and conditions of each grant.

 

Eligible funding recipients can only receive funding under the LRCI Program for projects that meet the guidelines and the terms and conditions of the grant. Consistent with previous Phases, the Secretary (or delegate, Senior Executive Service officer with relevant grants management experience) will assess whether projects proposed by an eligible funding recipient in its work schedule meet the guidelines and the terms and conditions before the first instalment of funding can be paid. Decisions on payment of further instalments are made by the Secretary (or delegate, Senior Executive Service or Executive Level 2 officer up to the limit of delegation with relevant grants management experience) in accordance with the guidelines and the terms and conditions.

 

The guidelines are available on the department's website and on GrantConnect at www.grants.gov.au. The department will also publish details of the grants awarded on GrantConnect.

 

Funding decisions made in connection with the LRCI Program are not suitable for independent review, as they are decisions relating to the allocation of a finite resource, from which all potential claims for a share of the resource cannot be met. Further, if one allocation of funding were altered, this has the potential to affect all other grants. The ARC has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.11 to 4.15 of the ARC guide).

 

The Government publicly signalled its intention to deliver on the LRCI Program Phase 4 funding commitment as part of the 2022 Election. Stakeholders including peak bodies and funding recipients provided feedback directly to government and the department flagged policy directions with local government stakeholders during the development of Phase 4 of the program. External stakeholder feedback from funding rIecipients on delivery of Phases 1 to 3 has informed program design of Phase 4, including allowing a longer project construction timeframe.

 

Funding of $750 million was included in the 2022-23 Budget. This includes $250 million for Phase 4 of the LRCI Program under the measure 'Building a Better Future through considered Infrastructure Investment' for a period of two years from 2023-24. Details are set out in the Budget October 2022-23, Budget Measures, Budget Paper No. 2 at pages 160-161.

 

Funding for this item will come from Program 3.2: Local government, which is part of Outcome 3. Details are set out in the Portfolio Budget Statements 2022-23, Budget Related Paper No. 1.12, Infrastructure, Transport, Regional Development, Communications and the Arts at page 59.

 

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 race power (section 51(xxvi));

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

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

*         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 LRCI Program involves providing funding to local governments across Australia for new local road projects and community infrastructure projects that may foster interstate and/or international trade, traffic, tourism and other commercial activities.

 

Communications power

 

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

 

Some of the projects funded by the LRCI Program may relate to communications related infrastructure, such as internet hubs.

 

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'.

 

Some of the projects funded by the LRCI Program will be used to specifically support the needs of Indigenous Australians or particular groups of Indigenous Australians.

 

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.

 

Some of the projects funded by the LRCI Program may relate to assisting Australia to meet its obligations under the International Covenant on Economic, Social and Cultural Rights (ICESCR), particularly Articles 2 and 6, and under the International Labour Organization's Convention concerning Employment Policy (ILO Convention 122), particularly Articles 1 and 2.

 

Article 2 of the ICESCR obliges States Parties 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 realisation of the rights recognised in the Covenant by all appropriate means, including particularly the adoption of legislative measures.

 

Article 6 of the ICESCR obliges States Parties to recognise the right to work, which includes the right of everyone to the opportunity to gain their living by work which they freely choose or accept, and will take appropriate steps to safeguard this right. Article 6 also obliges States Parties to take steps to realize this right including via technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and production employment under conditions safeguarding fundamental political and economic freedoms to the individual.

 

Article 1 of the ILO Convention 122 obliges each Member to declare and pursue, by reasonable and appropriate means, an active policy designed to promote full, productive and freely chosen employment with the aim of ensuring that there is productive work for all who are available for and seeking work, and that workers of all different backgrounds have freedom of choice over what type of work they wish to do.

 

Article 2 of the ILO Convention 122 obliges each Member to decide on and keep under review the measures adopted for attaining the objectives specified under Article 1, subject to a framework of co-ordinated economic and social policy, and take steps as may be needed, including the establishment of programmes, for the application of these measures.

 

The LRCI Program provides funding for the construction of local roads and other community infrastructure projects and will create jobs associated with those projects, therefore supporting and enhancing employment.

 

Express power and 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.

 

Spending under the LRCI Program is directed at addressing the severe effects of the national crisis resulting from COVID-19.

 

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'.

 

The LRCI Program involves providing funding to local governments, which may include local governments in various states, for new local road projects and community infrastructure projects.

 

Territories power

 

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

 

Some of the local governments receiving funding under the LRCI Program may be located in a Territory.

 

 

Attachment B

 

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 (Infrastructure, Transport, Regional Development, Communications and the Arts Measures No. 2) Regulations 2023

 

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 (Infrastructure, Transport, Regional Development, Communications and the Arts Measures No. 2) Regulations 2023 amend Schedule 1AB to the FF(SP) Regulations to establish legislative authority for government spending on certain activities administered by the Department of Infrastructure, Transport, Regional Development, Communications and the Arts.

 

This disallowable legislative instrument makes the following amendments to Part 3 of Schedule 1AB:

• adds table item 69 'Grant to The National Institute of Dramatic Art'.

 

This disallowable legislative instrument also makes the following amendments to Part 4 of Schedule 1AB:

*         amends table item 424 'Local Roads and Community Infrastructure Program'.

 

Table item 69 - Grant to The National Institute of Dramatic Art

 

Table item 69 establishes legislative authority for the Government to provide a grant to The National Institute of Dramatic Art (NIDA) for repairs, maintenance and improvement of the Commonwealth-owned building at 215 Anzac Parade in Kensington, New South Wales, which is occupied by NIDA.

 

NIDA is a public company limited by guarantee and is a tertiary institution providing qualifications for gifted young people for careers in theatre, film and television, as actors, directors, designers and production/technical staff. It is one of seven national performing arts training organisations funded through the Arts and Cultural Development Program to provide
world-class training and career pathways for Australia's best performing arts and production talent.

 

NIDA has received funding support from the Government since 1959, including funding for the initial construction of the purpose-built building, which opened in 2001. The Capital Works Expenditure Program was established to provide NIDA with capital works funding of approximately $1.8 million per year for the maintenance and upkeep of the building.

 

The intended outcomes of the grant funding are to:

• prolong the NIDA building's useful life to ensure its continued viable use in meeting NIDA's strategic plan and policy directions; and 
• create and maintain the best possible environment for learning and training.

 

Human rights implications

 

Table item 69 engages the following human 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 the enjoyment of just and favourable work conditions - Article 7 of the ICESCR;
• the right to an education - Article 13 of the ICESCR; and
• the right to take part in cultural life - Article 15 of the ICESCR.

 

Right to work

 

Article 2 of the ICESCR requires States Parties to take steps to progressively achieve the full realisation of the rights recognised in the ICESCR by all appropriate means.

 

Article 6 of the ICESCR recognises the right to work. Table item 69 promotes the realisation of the right to work by supporting employment in the arts sector, and by supporting the continuing viability of NIDA.

 

Right to the enjoyment of just and favourable work conditions

 

Article 7 of the ICESCR recognises the right of everyone to the enjoyment of just and favourable conditions of work. Table item 69 promotes the realisation of the enjoyment of just and favourable conditions of work by ensuring that ongoing maintenance of NIDA's building provides a safe and healthy work environment.

 

Right to an education

 

Article 13 of the ICESCR recognises the right of everyone to an education. Table item 69 promotes the realisation of the right to an education by ensuring appropriate resourcing of NIDA's facilities and that these facilities meet the requisite standard for elite training and are freely available for use by its students.

 

Right to take part in cultural life

 

Article 15 of the ICESCR recognises the right to take part in cultural life. Table item 69 promotes the realisation of this right by supporting the continued creation and delivery of creative works to members of the Australian community.

 

Conclusion

 

Table item 69 is compatible with human rights because it promotes the protection of human rights.

 

Amended table item 424 - Local Roads and Community Infrastructure Program

 

The amended table item 424 establishes legislative authority for government spending on the Local Roads and Community Infrastructure (LRCI) Program to assist local councils and unincorporated entities, who are responsible for the provision of local community services and infrastructure to support construction and maintenance of, and improvements to, priority local road and community infrastructure projects across Australia.

 

The LRCI Program commenced in July 2020 and has delivered three phases of funding with the objective to provide economic stimulus to 550 local councils and unincorporated entities following the impacts of the COVID-19 pandemic. A total of $2.5 million funding has been provided across the initial three phases of the LRCI Program since its commencement. These funds have supported around 9,500 infrastructure projects across Australia.

 

The amendments to the LRCI Program will shift in focus from COVID-19 economic stimulus to broader community infrastructure financial support.

 

Additional funding of $750 million, which comprised $500 million to extend the delivery of Phase 3 and $250 million to support Phase 4 was provided in the 2022-23 Budget. The LRCI Program is due to deliver Phase 4 in July 2023, which aims to continue stimulating additional infrastructure construction activity in local communities across Australia. It is expected that local governments will, where possible, use local businesses and workforces to deliver projects funded by the program to ensure stimulus funding flows into local communities, thus supporting local jobs, businesses and procurement.

 

Human rights implications

 

Table item 424 engages the following human right:

*         the right to work - Article 6 of the ICESCR, read with Article 2.

 

Right to work

 

Article 2 of the ICESCR requires States Parties to take steps to progressively achieve the full realisation of the rights recognised in the Covenant by all appropriate means.

 

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

 

The LRCI Program provides funding for the construction of local roads and other community infrastructure projects and will create jobs associated with those projects, therefore supporting and enhancing employment.

 

Conclusion

 

Table item 424 is compatible with human rights because it promotes the protection of human rights.

 

 

 

 

Senator the Hon Katy Gallagher

Minister for Finance