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2013-14
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
EXPORT MARKET DEVELOPMENT GRANTS
AMENDMENT BILL 2014
REVISED EXPLANATORY MEMORANDUM
and
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
(circulated by authority of the Minister for Trade and Investment, the Hon
Andrew Robb MP)
EXPORT MARKET DEVELOPMENT GRANTS AMENDMENT BILL 2014
OUTLINE
This Bill aligns the Export Market Development Grants (EMDG) scheme rules
to the revised level of scheme funding. It also contains technical and
simplification measures.
The purpose of this bill is to amend the Export Market Development Grants
Act 1997 (the Act) to:
. increase the number of grants able to be received by an applicant from
seven to eight
. reduce the minimum expenses threshold required to be incurred by an
applicant from $20,000 to $15,000
. reduce the current $5,000 deduction from the applicant's provisional
grant amount to $2,500
. prevent the payment of grants to applicants engaging an EMDG
consultant assessed to be a not fit and proper person
. enable a grant to be paid more quickly where a grant is determined
before the 1 July following the balance distribution date
. allow the payment of additional expenses above the cap on
administration costs for the financial year 2013-14 only. These
additional costs will be met from Austrade's departmental
appropriation.
FINANCIAL IMPACT
Expenditure under the Act is set through annual Appropriation acts. A
capping mechanism ensures that expenditure under the scheme is limited to
the amount appropriated.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
This Bill 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. This Bill is compatible with
human rights as it does not raise any human rights issues.
EXPORT MARKET DEVELOPMENT GRANTS AMENDMENT BILL 2014
ABBREVIATIONS
EMDG Act Export Market Development Grants Act 1997
grant year The year in which expenses are incurred by a grants
applicant
Austrade Australian Trade Commission
the scheme The scheme of financial assistance to exporters covered by the
Export Market Development Grants Act 1997
NOTES ON CLAUSES
Clause 1 This Act may be cited as the Export Market Development Grants
Amendment Act 2014.
Clause 2 This Act commences on the day on which it receives the Royal
Assent.
Clause 3 There is one Schedule amending the Export Market Development
Grants Act 1997.
SCHEDULE 1-Amendment of the Export Market Development Grants Act 1997
Item 1
This Item removes the Reader's guide to the Act (including the list of
terms defined in Part 9) as a simplification measure. The Part 9 terms are
defined in the body of the Act.
Item 2
The Act currently provides for applicants (except approved bodies and
approved joint ventures) to receive up to seven grants. This Item provides
for applicants currently subject to the seven grant limitation to now be
entitled to receive up to eight grants with no change to the rules for
approved bodies and approved joint ventures.
Item 3
The Act currently provides for a $20,000 minimum expenses threshold. This
amendment Bill reduces this amount to $15,000
Item 4
An EMDG applicant's provisional grant is currently calculated under the
formula at subsection 63(1) of the Act. Under this rule, an amount of
$5,000 is deducted from the provisional grant amount. This Item reduces the
amount deducted from $5,000 to $2,500. The impact of this measure on grant
amounts will be as shown in the following table, given that the minimum
expenses threshold amount is being reduced to $15,000 - refer Item 3.
Table: EMDG grants amount - current and proposed
|Eligible expenditure|Grant - current |Grant - proposed |
| |rules |rules |
|$5,000 |0 |0 |
|$10,000 |0 |0 |
|$15,000 |0 |$5,000 |
|$20,000 |$5,000 |$7,500 |
|$25,000 |$7,500 |$10,000 |
|$30,000 |$10,000 |$12,500 |
|$50,000 |$20,000 |$22,500 |
|$100,000 |$45,000 |$47,500 |
|$200,000 |$95,000 |$97,500 |
|$300,000 |$145,000 |$147,500 |
|$305,000 |$147,500 |$150,000 |
|$310,000 |$150,000 |$150,000 |
Item 5
The amendments made by items 2 to 4 apply to 2013-14 grant year
applications and later grant year applications.
Item 6
The EMDG scheme not fit and proper person rules under section 87AA of the
EMDG Act provide for the non-payment of an EMDG grant if the CEO of
Austrade has formed an opinion, in accordance with EMDG (Associate and Fit
and Proper Person) Guidelines 2004 (Not Fit and Proper Person Guidelines),
that a person or an associate of the person is 'not fit and proper' to
receive a grant.
However, under current scheme rules, where an applicant engages an EMDG
consultant to prepare or to help prepare an EMDG claim and the EMDG
consultant is 'not fit and proper' such an applicant is not subject to the
provisions of section 87AA of the Act (in respect of their EMDG
consultant).
The only current circumstance under the Act where an applicant might be
affected by the actions of their EMDG consultant is where the consultant is
disqualified in terms of section 78 of the Act. This section lists relevant
Corporations Act 2001, Crimes Act 1914 and Criminal Code offences.
Sections 74 to 79 inclusive of the Act provide that where a claim, prepared
by a disqualified EMDG consultant, has been lodged, the claim is taken not
to have been made and the applicant is invited to make a fresh application.
This Item extends the not fit and proper person provisions to EMDG
consultants who engage in false and misleading behaviour or whose behaviour
is considered to be inconsistent with accepted community standards of
commercial and personal propriety.
This Item provides the legislative framework to enable the CEO of Austrade
to decide whether a person should be assessed as an excluded consultant.
Similar to the provisions applying to general EMDG applicants and to their
associates, the consultant not fit and proper person rules also apply to
both EMDG consultants and to their associates.
This Item provides that the consultant not fit and proper person rules will
apply to any person who is or has been a consultant or an associate of a
consultant.
Rules for determining whether a person is an associate of an EMDG
consultant will be in a legislative instrument to be made by the Minister
for Trade and Investment as provided for in Item 9. This instrument will
also contain assessment criteria to be used by the CEO of Austrade to
determine whether a person or an associate of the person is not a fit and
proper person. It is expected that the assessment criteria will be based on
those currently used in the Export Market Development Grants (Associate and
Fit and Proper Person) Guidelines 2004. This approach, whilst through the
use of a legislative instrument, will provide transparency and oversight,
it will also provide the CEO of Austrade a mechanism to deal responsively
to the variety and diversity of yet unknown circumstances and behaviours
that may arise.
To determine whether a person or an associate of the person should be
assessed to be an excluded consultant, Austrade may need to seek
information about that person or the person's associate. This Item also
provides for Austrade to be able to request that a person provide Austrade
with (1) specified information, books, records or documents; and/or (2)
written consent (whether of the person or of any associate of the person)
to enable the CEO of Austrade to obtain relevant information to assist in
forming an opinion as to whether a person is not a fit and proper person.
A failure to comply with any request for information, books, records,
documents or written consent will not be an offence. However, the proposed
subsection 79A(3) provides that any failure to comply with such a request
may be a relevant consideration in the Ministerial guidelines to be made -
Item 9 refers.
Information or documents sought by the CEO of Austrade will only be used
for the purpose of deciding whether to make a determination to exclude a
consultant. This provision is considered necessary so that the CEO of
Austrade is be able to form a view about whether a consultant should be
excluded on the basis of the behaviour of his or her associate. Any
documents or information sought by and provided under this provision must
be for that purpose and is covered by the secrecy provision as set out in
section 94 of the Australian Trade Commission Act 1985.
The effect of lodging an application prepared by or with the help of an
excluded consultant is that the application must be rejected by the CEO of
Austrade with written notice to this effect to be provided to the applicant
as soon as practicable. This written notice must set out how, and in what
timeframe, the applicant can make a fresh application.
An excluded consultant may apply for revocation of a determination that the
person, or an associate of the person, is not a fit and proper person.
In applying the assessment criteria to be set out in the Guidelines, it is
expected that the CEO of Austrade would only form an opinion that a
consultant was not a fit and proper person where there was a concern with
that person's capacity or trustworthiness to act as a consultant in the
best interests of both their applicant client and the public funds from
which EMDG grants are paid.
Without seeking to exhaustively list the circumstances in which an opinion
could appropriately be formed that a consultant was not a fit and proper
person, some examples are as follows. A simple, minor, isolated and
explicable mistake would not be expected to be sufficient to warrant an
opinion that a person was not a fit and proper person to act as an EMDG
consultant, but a history of repeated and material errors of the same type
may be considered sufficient. Similarly, the making of a claim based on an
interpretation of the law or the factual circumstances that is reasonably
arguable although not agreed by Austrade would not be sufficient, but the
making of claims that are clearly inconsistent with the established law or
that misrepresent the factual circumstances may be sufficient.
The power to reject a claim lodged by an EMDG consultant who is in the
opinion of the CEO not a fit and proper person is viewed as significant.
The CEO's decisions will be subject to administrative review. All such
decisions are subject to review by the Administrative Appeals Tribunal.
Item 7
The operation of the EMDG scheme two-tranche system is explained at section
67 of the Act. Essentially, applicants entitled to a grant of less than the
'initial payment ceiling amount' (IPCA) are paid their grant at the time
the claim is determined. Applicants entitled to an amount exceeding the
IPCA are paid the IPCA amount and then, often many months later and
following the setting of the 'balance distribution date', are paid the
balance of their entitlement. This balance amount will depend on the
assessed value of all applicants' entitlements and will be paid to
applicants entitled to a second tranche amount on a pro rata basis.
Under the EMDG Act's current two-tranche payment arrangements, Austrade is
unable to pay the full amounts of assessed grants to applicants as quickly
as desirable when scheme demand is lower than expected or where additional
money is appropriated for the scheme.
For example, in some years, it is clear to Austrade once all annual claims
are lodged that all applicants will be entitled to their full claim, i.e.
the payout factor for the year will be 100 per cent.
In these circumstances it is preferable to bring the 'balance distribution
date' forward. However Section 82 prevents the payment of grants that are
determined after the 'balance distribution date' until after that 1 July.
This item amends Section 82 to provide that if Austrade determines the
amount of a grant after the 'balance distribution date' the grant becomes
payable immediately. There is no additional cost associated with this
change. It ensures more flexible and quicker payment of grants to
applicants when circumstances permit.
Item 8
This Item provides that any decision by the CEO of Austrade in relation to
determinations that a person, or an associate of the person, is an excluded
consultant is a reviewable decision, with internal review and AAT review
rights.
Item 9
This Item provides for the Minister for Trade and Investment to make
Ministerial guidelines to be used by the CEO of Austrade to make decisions
to do with excluded consultants.
Items 9A and 9B
Currently, section 105 of the EMDG Act provides that the EMDG scheme
administration costs for any financial year must not exceed 5 per cent of
the money appropriated by Parliament for the scheme for that financial
year.
This item amends that section for the 2013-14 financial year only to allow
additional costs of administration above the 5 per cent cap to be met from
departmental appropriations.
Item 10
Item 6 refers
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