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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AUTOMOTIVE TRANSFORMATION SCHEME BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon Kim Carr, Minister for
Innovation, Industry, Science and Research)
AUTOMOTIVE TRANSFORMATION SCHEME BILL 2009
OUTLINE
The Automotive Transformation Scheme Bill 2009 (the Bill) establishes the
legislative framework for the Automotive Transformation Scheme (the
Scheme), which is the centrepiece of the Government's automotive policy, A
New Car Plan for a Greener Future (the New Car Plan)
(http://www.innovation.gov.au/Industry/Automotive/Documents/NEWCARPLANGREENE
RFUTURE.pdf).
The object of the Scheme is to encourage competitive investment and
innovation in the Australian automotive industry. The Scheme will achieve
this in a way that improves environmental outcomes and promotes the
development of workforce skills. The Scheme provides assistance to
participants for the production of motor vehicles and engines, and for
investment in eligible research and development, and plant and equipment.
The Bill, together with the ACIS Administration Amendment Bill 2009, will
revitalise the Australian automotive industry by increasing support to
reinvigorate the industry and to ensure its long-term economic and
environmental sustainability.
These Bills, along with other elements of the New Car Plan, demonstrate the
Government's commitment to securing the future of this strategically vital
sector of the Australian economy. That is why in 2008, the Government
commissioned the Hon Steve Bracks to conduct the Review of the Australian
Automotive Industry. The Government, in its response to the Review-the New
Car Plan-committed to the establishment of a new, better targeted
legislative scheme, the Automotive Transformation Scheme, to replace
assistance under the Automotive Competitiveness and Investment Scheme
(ACIS) from 2011. The passage of these Bills will implement this
commitment.
The Scheme improves on the existing ACIS by placing a renewed emphasis on
innovation by increasing the support for eligible investment in research
and development. That is why the new Scheme increases the rate of claims
for investment in eligible research and development from 45 per cent to
50 per cent. The Scheme will also provide assistance in the form of grants
instead of duty credits as in ACIS. This is consistent with the
recommendation of the Brack's Review of the Australian Automotive Industry.
These changes are supported by the automotive industry, which has been
extensively consulted as part of the Review's process and through the
development of this legislation.
The Bill provides for assistance under the Scheme to include both capped
and uncapped assistance. Capped assistance is limited to $1.5 billion in
stage 1 (2011 to 2015) and $1 billion in stage 2 (2016 to 2020). Capped
assistance is guaranteed through a standing appropriation. Uncapped
assistance will be provided through an annual appropriation.
The Bill establishes a framework for the Scheme with the administrative
details to be included in the regulations. This reduces the administrative
complexity of the legislation and provides the flexibility required to deal
with changing circumstances in the Australian automotive industry.
The Bill sets out what matters the regulations will contain, including the
registration of participants, the payment of amounts subject to
participants meeting certain conditions, the recovery of amounts by the
Commonwealth in prescribed circumstances, the payment of interest by scheme
participants on overpaid amounts, the review of decisions, and other
matters required or incidental to the Scheme.
The Bill ensures that debts under the Scheme may be recoverable by the
Commonwealth, including by offsetting against a participant's future
payments. Monies recovered may then be redistributed within a relevant
stage.
The Bill also includes a strong monitoring regime, including provision for
authorised officers to obtain a monitoring warrant to check compliance with
the Scheme. These provisions are necessary, given that the Scheme is a self-
assessment scheme, to facilitate effective monitoring and to ensure the
integrity of the Scheme. The Bill also includes provisions that protect the
rights of occupiers of premises, such as judicial oversight of the process
for obtaining monitoring warrants.
FINANCIAL IMPACT STATEMENT
The total administered expenses for the Automotive Transformation Scheme,
established by the Automotive Transformation Scheme Bill 2009, are
estimated at $3,347 million over the period 2010-11 to 2020-21. This figure
is made up of two kinds of assistance:
. capped assistance worth $2,500 million administered through a special
appropriation; and
. uncapped assistance, estimated at $847 million administered through
annual appropriations.
Note: The total administered expenses are an estimate as the uncapped
component is partially based on the value of motor vehicles sold by motor
vehicle producers registered under the Scheme.
AUTOMOTIVE TRANSFORMATION SCHEME BILL 2009
NOTES ON CLAUSES
This Explanatory Memorandum uses the following abbreviation:
. 'Scheme' means the Automotive Transformation Scheme
Part 1-Preliminary
Clause 1 - Short title
1. This clause provides for the Bill, once enacted, to be cited as the
Automotive Transformation Scheme Act 2009.
Clause 2 - Commencement
2. Subclause (1) provides that the commencement date for sections 1 and
2, and anything in this Act not elsewhere covered by the table, is the day
on which this Act receives Royal Assent. The date of commencement for
sections 3 to 29 is the 1 July 2010, unless the ACIS Administration
Amendment Act 2009 does not receive Royal Assent before 1 July 2010, then
these sections do not commence at all.
3. Subclause (2) allows for column 3 of the table to contain additional
information that is not part of this Act.
Clause 3 - Object
4. Subclause (1) sets out the object of the Bill, which is to encourage
competitive investment and innovation in the Australian automotive industry
through the provision of assistance to Scheme participants.
5. Subclause (2) states that the object of the Bill is to be achieved in
a way that improves environmental outcomes and promotes the development of
workforce skills.
Clause 4 - Definitions
6. This clause defines the terms used throughout the Bill.
Part 2-The Automotive Transformation Scheme
Division 1-Making the Automotive Transformation Scheme
Clause 5 - Making the Automotive Transformation Scheme
7. This clause requires regulations to be made that prescribe the Scheme
and further the object of the Bill.
8. Subclause (1) provides that the Scheme must prescribe certain
matters, namely: the registration of participants; the payment of an amount
subject to certain conditions; the recovery by the Commonwealth of amounts
in circumstances set out in the regulations; the payment of interest by
participants for overpaid amounts; review of decisions by the
Administrative Appeals Tribunal or a court; the appointment of authorised
officers; and dealing with matters required or permitted by the Act to be
included in the Scheme, as well as dealing with ancillary or incidental
matters.
Note:
Ancillary or incidental matters could include the making of guidelines
as part of the Scheme. The guidelines may include guidelines that set
out how certain types of assistance are to be adjusted to ensure the
Scheme cap is not exceeded due to over demand for the Scheme.
9. Subclause (2) makes it clear that the Scheme is a self-assessment
scheme.
Clause 6 - Other matters that may be included in the Automotive
Transformation Scheme
10. This clause provides for other matters that may be included in the
Scheme, namely, any or all of the following: the application process for
registration; the assessment criteria for registration; the amount of a
payment to a Scheme participant; that assistance under the Scheme is not
transferable under any circumstances except with approval of the Secretary;
and the deregistration of a Scheme participant.
Division 2-Assistance
Subdivision A-Assistance available
Clause 7 - Kinds of assistance
11. This clause provides that the Scheme has two types of assistance:
capped assistance and uncapped assistance.
Note:
Uncapped assistance is available to participants registered as motor
vehicle producers for the production of approved motor vehicles,
engines and engine components.
Capped assistance is available to registered motor vehicle producers
for the production of motor vehicles, and investment in research and
development, and plant and equipment. Capped assistance is also
available to registered automotive supply chain participants for
investment in research and development, and plant and equipment.
Clause 8 - Amount of capped assistance available
12. Subclause (1) states that capped assistance under the Scheme must not
exceed the stage caps. Stage 1, commencing 1 January 2011 and ending on 31
December 2015, must not exceed $1.5 billion and stage 2, commencing 1
January 2016 and ending on 31 December 2020, must not exceed $1 billion.
13. Subclause (2) provides that total capped assistance under the Scheme
must not exceed $300 million in respect of a Scheme year, not including the
amounts set out in subclause (3).
14. Subclause (3) allows for unspent capped assistance to be rolled over
to later calendar years within the relevant stage. This aims to address the
situation when the industry under demands the Scheme.
15. Subclause (4) prevents capped assistance in respect of a Scheme year
to be paid on or after 1 April of the following year. This does not include
amounts of capped assistance recovered by the Commonwealth in subclause
(6).
16. Subclause (5) allows for capped assistance that is recovered in a
particular year to be redistributed in that year or any later years within
the relevant stage.
17. Subclause (6) permits amounts of capped assistance recovered by the
Commonwealth to be paid in the year following the last year of the stage.
This allows recovered amounts of capped assistance to be redistributed to
Scheme participants.
Subdivision B-Payments of assistance
Clause 9 - Payments
18. This clause ensures that payments made to participants of the Scheme
may only be paid if certain conditions are satisfied. These include that
money may be offset or recovered, including from a party owing money to a
Scheme participant, in the circumstances specified in the regulations.
Note: Conditions, which need to be satisfied by Scheme participants,
may include an obligation to retain documents relating to the Scheme,
for participants to update business plans that are provided with a
participant's registration and for participants to answer questions
and produce documents relating to their claim for assistance under the
Scheme.
Subdivision C-Miscellaneous
Clause 10 - Appropriation
19. This clause provides that amounts of capped assistance under the
Scheme will be appropriated from the Consolidated Revenue Fund.
20. A standing appropriation ensures the effective administration of the
Scheme operating on calendar years. The standing appropriation gives the
industry the certainty it needs to plan long-term investment. Additionally,
it allows capped assistance that is recovered or capped assistance that is
unspent in a calendar year to be returned to the Scheme in each stage for
redistribution.
21. The standing appropriation is limited in amount by the Scheme caps
and in duration as the Scheme ends on 31 December 2020.
Division 3-Monitoring powers
Subdivision A-Powers for monitoring compliance
Clause 11 - Authorised officer may enter premises by consent or under a
monitoring warrant
22. This clause provides that an authorised officer may enter premises-
either by the occupier's consent or under a monitoring warrant-for the
purpose of checking compliance or substantiating information provided by a
participant under the Scheme.
Clause 12 - Powers available for monitoring compliance
23. This clause sets out the monitoring powers available to an authorised
officer.
24. Subclause (1) provides comprehensive monitoring powers to authorised
officers, which are necessary, as the Scheme is a self-assessment scheme
for which quarterly payments are provided on trust, subject to later
compliance and verification. These powers aim to ensure the integrity of
the Scheme by deterring participants from over-claiming assistance.
25. Subclause (2) allows an authorised officer to secure a thing for no
longer
than 24 hours subject to certain conditions.
26. Subclause (3) and (4) includes the power to operate equipment to see
whether the equipment contains information relevant to compliance or to
assessing information provided under the Scheme.
Subdivision B-Obtaining consent
Clause 13 - Consent
27. Subclause (1) provides that, before obtaining consent from a person
to enter premises (under clause 11), the authorised officer must inform the
person that he or she may refuse consent.
28. Subclause (2) to (4) clarifies that any consent given by a person to
enable entry to premises by the inspector must be voluntary and can be
withdrawn.
29. Subclause (5) provides that an authorised officer, whilst on a
premises with the occupier's consent, must show their identity card when
required by the occupier and they must leave the premises if asked to do so
by the occupier.
Subdivision C-Monitoring warrants
Clause 14 - Application for a monitoring warrant
30. Subclause (1) allows an authorised officer to apply to a magistrate
for a monitoring warrant for the purposes of establishing whether the
Scheme has been complied with.
31. Subclause (2) provides that an authorised officer must give a
magistrate information to support the application for a monitoring warrant.
Clause 15 - When a monitoring warrant may be issued
32. Subclause (1) enables a magistrate to issue a warrant that permits
more than one authorised officer to enter the same premises for the
purposes of establishing whether a participant has complied with the
Scheme. The clause restricts the use of monitoring warrants to
circumstances when a magistrate is satisfied that it is reasonably
necessary for authorised officers to access the premises under a monitoring
warrant.
33. Subclause (2) provides that the magistrate must not issue the warrant
unless the authorised officer or some other person has given the magistrate
information concerning the grounds on which the issue of the warrant is
being sought.
Clause 16 - Content of warrant
34. This clause describes the matters that must be contained in a
monitoring warrant issued by a magistrate.
Subdivision D-Obligations and incidental powers of authorised officers
Clause 17 - Authorised officer must produce identity card on request
35. This clause provides that an authorised officer cannot exercise any
of the powers under this Part, in relation to premises if they do not show
their identity card upon being requested to do so by the occupier of those
premises. The form of the identity card will be specified in the
regulations.
Clause 18 - Announcement before entry
36. This clause provides that before an authorised officer enters
premises under a monitoring warrant they must announce that they are
authorised to enter the premises, and give any person at the premises an
opportunity to allow entry to the premises.
Clause 19 - Copy of warrant to be shown to occupier etc.
37. Subclause (1) provides that, if a warrant in relation to premises is
being executed, a copy of the warrant must be made available to the
occupier of the premises or another person who represents the occupier,
where the occupier or their representative are present at the premises.
38. Subclause (2) requires an authorised officer to identify himself or
herself.
39. Subclause (3) provides that the copy need not include the signature
of the magistrate who issued the warrant.
Clause 20 - Use of electronic equipment in exercising monitoring powers
40. Subclause (1) provides that an authorised officer may operate
electronic equipment at the premises in order to exercise monitoring
powers, as long as the authorised officer believes that the equipment may
be operated without damaging it.
41. Subclause (2) provides that the authorised officers may secure the
electronic equipment in certain circumstances where they require expert
assistance to operate the equipment.
42. Subclauses (3) to (7) set out certain requirements for, and
limitations on, securing equipment for the purposes of executing monitoring
powers.
Clause 21 - Compensation for damage to electronic equipment
43. Subclause (1) provides that where electronic equipment, recorded
data, or programs are damaged in the operations mentioned in clause 20, and
the damage occurs because of insufficient care in the operation or choice
of person to operate the equipment, compensation is payable to the owner.
44. Subclause (2) requires the Commonwealth to pay the owner of the
equipment or the user of data or programs reasonable compensation for the
damage, as the owner and Commonwealth agree.
45. Subclause (3) provides that if the owner and Commonwealth are unable
to agree, then the owner may commence proceedings in the Federal Court of
Australia.
46. Subclause (4) provides that in determining the amount of compensation
payable regard is to be had as to whether the occupier (or his or her
employees or agents) had provided any warning or guidance as to the
operation of the thing. This clause aims to minimise compensation where an
occupier fails to mitigate damage by providing a warning or guidance.
47. Subclause (5) provides that compensation is payable from the money
appropriated by the Parliament.
Subdivision E-Occupier's rights and responsibilities
Clause 22 - Occupier entitled to be present during execution of monitoring
warrant
48. This clause provides that, when present, the occupier of the
premises, or a person who represents the occupier, is entitled to observe
the execution of a monitoring warrant, unless the occupier impedes the
execution. This clause does not prevent the execution of the warrant in two
or more areas of the premises at the same time.
Clause 23 - Occupier to provide authorised officer with facilities and
assistance
49. This clause requires an occupier of the premises, or a person who
represents the occupier, to assist an authorised officer in the execution
of a monitoring warrant. Failure to comply with this requirement is an
offence.
Subdivision F-Offences
Clause 24 - Offence for failure to answer questions, produce books etc.
50. An offence is committed if a person refuses or fails to answer
questions or to produce a document that is requested by the authorised
officer who enters the premises under a monitoring warrant. The offence
provision is included to enhance the effectiveness of clause 12(1)(e). The
offence is punishable by a maximum six months imprisonment.
51. The person is not required to answer questions or produce documents
if it may incriminate the person or expose the person to a penalty. The
note in subclause (2) explains that a defendant bears an evidential burden
in relation to this defence and refers to subsection 13.3(3) of the
Criminal Code, which explains the concept of an evidential burden.
Note:
The provision is designed to be consistent with paragraph 4.6 of A
Guide to Framing Commonwealth Offences, Civil Penalties and
Enforcement Powers. The onus is placed on the defendant as the defence
of whether a person has a reasonable excuse in relation to clause
12(1)(e) is wholly within the knowledge of the defendant.
Additionally, it is significantly more difficult and costly for the
prosecution to disprove than for the defendant to establish.
Clause 25 - Offence for failing to provide authorised officers with
facilities and assistance
52. An offence is committed if a person breaches the requirement of
providing reasonable assistance to the authorised officer when executing a
monitoring warrant. The offence is punishable by 30 penalty units for non-
compliance with this section.
Note:
The inclusion of the offence is designed to improve the ability of
authorised officers to verify and substantiate information in relation
to the Scheme in an efficient and effective manner.
Subdivision G-Miscellaneous
Clause 26 - Magistrates-personal capacity
53. This clause provides that the power conferred on magistrates in
respect of monitoring warrants, is conferred on them in their personal
capacity, and not as a court or a member of a court, although they retain
any protection and immunity afforded to them as a member of the court of
which they are a member.
Part 3-Miscellaneous
Clause 27 - Transitional arrangements
54. This clause provides for the Scheme to recognise matters of a
transitional nature relating to ACIS. This clause allows for the
recognition of eligible investments made under ACIS by persons or entities
who become participants in the Scheme. Under ACIS, a claim for assistance
for eligible investment is paid to a participant over twelve quarterly
instalments. The Scheme will therefore continue to recognise claims of
registered participants in eligible investment made under ACIS from 2008.
Clause 28 - Delegation
55. Subclause (1) provides for the Minister, in relation to powers under
the Scheme, to delegate those powers to the Secretary.
56. Subclauses (2) to (5) provide for the Secretary in relation to powers
and functions under the Act or the regulations, to delegate those powers
and functions to an SES employee in the Department. In exercising powers or
functions under a delegation, the delegate must comply with any directions
of the Secretary.
Clause 29 - Regulations
57. This clause sets out a power to make regulations that prescribe
matters that are required or permitted by the Bill, or are necessary or
convenient for carrying out or giving effect to this Bill.