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2013-14
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
EXPORT MARKET DEVELOPMENT GRANTS
AMENDMENT BILL 2014
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
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
Grant - Grant -
Eligible
current proposed
expenditure
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.
Item 10
Item 6 refers