Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024 - Initial Scrutiny [2025] AUSStaCSBSD 4 (5 February 2025)

• Future Made in Australia (Production Tax Credits and Other Measures) Bill 202422
• Instruments not subject to an appropriate level of parliamentary oversight23
• Significant matters in delegated legislation31

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Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024^[22]

Purpose	Schedule 1 to the Bill establishes the Hydrogen Production Tax Incentive, in the form of a new tax offset called the hydrogen production tax offset. Schedule 2 to the Bill establishes the Critical Minerals Tax Production Incentive (CMPTI), in the form of a new refundable tax offset, the CMPTI tax offset, to support the processing of critical minerals in Australia. Schedule 3 amends the Aboriginal and Torres Straits Islander Act 2005 to enable Indigenous Business Australia to leverage their capital to invest in First Nations communities and businesses.
Portfolio	Treasury
Introduced	House of Representatives on 25 November 2024
Bill status	Before the House of Representatives

Instruments not subject to an appropriate level of parliamentary oversight^[23]

1.23 This bill provides that a company that produces hydrogen products and holds a registered production profile for these products, may apply to the Clean Energy Regulator for the profile to be certified.^[24] When applying for certification, the application is taken not to be made unless it complies with certain requirements, which include being in a prescribed form and being accompanied by any prescribed information, documents or materials.^[25] The Clean Energy Regulator may prescribe a form or information, documents or materials to be included in the application by a notifiable instrument.^[26]

1.24 Similarly, another provision in the bill allows the Industry Secretary to approve a form or require the form to be accompanied by specified information, documents or other materials as specified by notifiable instrument.^[27]

1.25 A notifiable instrument is not subject to the tabling, disallowance or sunsetting requirements that apply to legislative instruments,^[28] and as such, this precludes any parliamentary oversight over the content of such instruments. Noting the importance of parliamentary scrutiny, the committee expects that where legislation confers a power to make a notifiable instrument, the explanatory materials should include a justification as to why the matters to be contained in the instrument are not considered to be legislative in character.^[29] The committee notes that, in general, an instrument will be legislative in character if it:

• is made under a power delegated by the Parliament; and

• any provision of the instrument:

(iv) determines, or alters the content of, the law (rather than determining particular cases or circumstances in which the law is to apply); and

(v) affects a privilege or interest or imposes, creates, varies or removes an obligation or right.^[30]

1.26 In this instance, the explanatory memorandum only restates the operation of both provisions and does not provide a justification as to the use of notifiable instruments.

1.27 It is not clear to the committee how an instrument that prescribes the form in which applications should be made and information, documents or materials that should accompany an application is not legislative in character. The committee understands that the failure to comply with these requirements would result in the application being taken to have not been properly made in all instances, which would appear to determine the content of that law as a result.

1.28 In light of the above, the committee seeks the Treasurer’s advice as to why it is considered necessary and appropriate that the Clean Energy Regulator and the Industry Secretary may prescribe requirements such as forms, information, documents and materials in relation to applications by notifiable, rather than legislative instrument, and why these instruments are not considered legislative in character.

Significant matters in delegated legislation^[31]

1.29 This bill seeks to provide that the minister may make rules, known as the Indigenous Business Australia rules.^[32] These rules may prescribe the circumstances in which Indigenous Business Australia may borrow money for a purpose in connection with its functions and may prescribe limits or conditions on the borrowing of such money.

1.30 Where a bill includes matters in delegated legislation, the committee expects the explanatory memorandum to the bill to address why it is appropriate to include the relevant matters in delegated legislation and whether there is sufficient guidance on the face of the primary legislation to appropriately limit the matters that are being left to delegated legislation. A legislative instrument made by the executive is not subject to the full range of parliamentary scrutiny inherent in bringing forward proposed legislation in the form of a bill.

1.31 In this instance, the committee notes that this matter may be appropriate for inclusion in delegated legislation due to its highly technical nature. However, this is unclear as the explanatory materials do not provide any justification as to why it is appropriate to include these matters in the Indigenous Business Australia rules.

1.32 Noting the importance of explanatory materials as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation,^[33] the committee considers that a justification for the inclusion of the these matters in the Indigenous Business Australia rules should be included in the explanatory memorandum of this bill.

1.33 The committee requests that the explanatory memorandum to the bill be updated to include information addressing the committee’s concerns.

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^[22] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024, Scrutiny Digest 1 of 2025; [2025] AUSStaCSBSD 4.

^[23] Schedule 1, item 3, proposed subsection 421-50(5) and schedule 2, item 1, proposed section 419-150. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(v).

^[24] Proposed subsection 421-50(1).

^[25] Proposed subsection 421-50(3).

^[26] Proposed subsection 421-50(5).

^[27] Proposed section 419-150.

^[28] See Legislation Act 2003.

^[29] By reference to the criteria set out in the Legislation Act 2003, subsection 8(4).

^[30] Legislation Act 2003, subsection 8(4).

^[31] Schedule 3, item 2, proposed subsections 183(2) and 189A(2). The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(iv).

^[32] Proposed subsection 189A(2).

^[33] See Acts Interpretation Act 1901, section 15AB.