Industry Research and Development (Cooperative Research Centres Projects Program) Instrument 2017 [F2017L01202]-Concluded matters [2017] AUSStaCSDLM 450 (12 June 2017)

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Instrument	Industry Research and Development (Cooperative Research Centres Projects Program) Instrument 2017 [F2017L01202]
Purpose	Establishes legislative authority for government funding of industry-led research through the Cooperative Research Centres Projects Program
Authorising legislation	Industry Research and Development Act 1986
Portfolio	Industry, Innovation and Science
Disallowance	15 sitting days after tabling (tabled Senate 16 October 2017) Notice of motion to disallow must be given by 7 December 2017[1]
Scrutiny principle	Standing Order 23(3)(c)
Previously reported in	Delegated legislation monitor 14 of 2017

Merits review

The committee previously commented as follows:

Scrutiny principle 23(3)(c) of the committee’s terms of reference requires the committee to ensure that instruments do not unduly make the rights and liberties of citizens dependent upon administrative decisions which are not subject to review of their merits by a judicial or other independent tribunal.

Under section 33 of the Industry Research and Development Act 1986, executive spending may be authorised by prescribing schemes in instruments made under that Act. This instrument prescribes the Cooperative Research Centres Projects Program, and establishes the conditions and procedures under the Program for government grants to organisations conducting collaborative research in support of Australian industry.

Section 13 of the instrument provides for project applications to be assessed by Innovation and Science Australia (the Board), which then makes recommendations

to the minister for decision. Subsection 13(1) provides that compliant applications must be considered on merit, and against all other compliant applications. Neither the instrument nor the explanatory statement (ES) sets out whether the minister's decisions are subject to external merits review; and if not, what characteristics justify their exclusion from merits review.

The committee considers that the ES should include a description of the policy considerations and program or grant characteristics relevant to the question of whether or not decisions made pursuant to programs and grants regulations should be subject to independent review. This expectation is consistent with the committee's expectations in relation to programs or grants authorised under the Financial Framework (Supplementary Powers) Regulations 1997.^[2]

The committee requested the minister's advice as to whether funding decisions made under the Cooperative Research Centres Projects Program are subject to independent review of their merits; and if not, what characteristics of the Program justify the exclusion of such decisions from external merits review.

Minister's response

The Acting Minister for Industry, Innovation and Science advised:

Funding decisions made under the Program are not subject to external merits review. Merits review would not be appropriate within the context of the Program, as funding decisions involve the allocation of finite resources, and overturning an original funding decision could affect an allocation for another party. This is consistent with the Administrative Review Council guide, What decisions should be subject to merits review? available at https://www.arc.ag.gov.au/Publications/Reports/Pages/
Downloads/Whatdecisionsshouldbesubjecttomeritreview1999.aspx. The Program is subject to a robust and extensive assessment process, an enquiry and feedback process, and an existing complaints mechanism for affected applicants.
Funding for the Program is provided under the broader Cooperative Research Centres (CRC) Program. The CRC Program provides funding of $710 million over the forward estimates to support:

- CRC grants (which are supported by item 418.004 of Schedule 1AA of the Financial Framework (Supplementary Powers) Regulations 1997, and for which there is no maximum value, but which are typically $30-50 million); and

- grants for CRC Projects (which are supported by the Instrument, and which may be up to a maximum of $3 million).

There is no specified annual amount allocated to each of these two funding streams. The number of CRC grants and grants for CRC Projects that will be funded in each selection round will depend on the number of applications received, the relative merits of applications, the amount of available funding and the need to ensure sufficient funding is available for future selection rounds.
Program funding is provided through a competitive, merit based process
in accordance with the Commonwealth Grants Rules and Guidelines
https://www.finance.gov.au/sites/default/files/commonwealth-grants-rules-and-guidelines.pdf
and the Cooperative Research Centres Projects Guidelines (the Program Guidelines) available at https://www.business.gov.au/CRC-P.
To be eligible to receive funding, applicants must meet the eligibility criteria and rank competitively on the selection criteria against all other compliant applications. The selection criteria are set out in section 12 of the instrument and further guidance is outlined in the Program Guidelines.
At first instance, applications are assessed by the Department of lndustry, Innovation and Science (the department) against the eligibility criteria, with the program delegate determining each application's compliance with the eligibility criteria.
Following this, the merit selection process outlined in section 13 of the instrument applies. Innovation and Science Australia (the Board) considers eligible applications against each of the six selection criteria. To be competitive, applications must score highly against each selection criterion.
After considering the applications, the Board makes recommendations to the Minister on: which projects are suitable for funding; the national benefits to be delivered through funding the projects; the level of program funding proposed for each project; and any conditions that should apply to any offers of funding.
The Minister makes the final decision about which grants to approve and the level of funding for each project, taking into consideration the Board's recommendations, and the availability of grant funds. Funding will not be approved if there are insufficient Program funds available across relevant financial years for the Program.
Both successful and unsuccessful applicants are informed in writing. Unsuccessful applicants are given feedback and may request an opportunity to discuss the outcome with the department. Unsuccessful applicants can submit a new application for the same or similar project in future funding rounds if weaknesses identified in their previous application are addressed.
Persons who are otherwise affected by decisions or who have complaints about the Program also have recourse to the department. The department will investigate any complaints about the Program in accordance with its complaints policy and procedures. If a person is not satisfied with the way the department handles the complaint, they may lodge a complaint with the Commonwealth Ombudsman.
I have approved a replacement Explanatory Statement containing this explanation (copy attached), and my department has amended its processes to ensure future Explanatory Statements contain such detail.

Committee's response

The committee thanks the minister for her response, and notes the minister's advice that funding decisions involve the allocation of finite resources, and that overturning an original funding decision could affect an allocation to another party.

The committee notes that the replacement ES provided to the committee has now been registered on the Federal Register of Legislation, and further notes the minister's advice that the department has amended its processes to ensure that future ESs provide information in relation to merits review of decisions.

The committee has concluded its examination of the instrument.

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[1] In the event of any change to the Senate's sitting days, the last day for the notice would change accordingly.

[2] Regulations and Ordinances Committee, Guideline on regulations that amend Schedule 1AB to the Financial Framework (Supplementary Powers) Regulations 1997, http://www.aph.gov.au/ Parliamentary_Business/Committees/Senate/Regulations_and_Ordinances/Guidelines/FFSP_Regulations_1997.