Details of the Financial Framework (Supplementary Powers) Amendment
(Infrastructure, Transport, Regional Development and Communications Measures No. 7) Regulations 2020
Section 1 - Name
This section provides that the title of the Regulations is the Financial Framework (Supplementary Powers) Amendment (Infrastructure, Transport, Regional Development and Communications Measures No. 7) Regulations 2020.
Section 2 - Commencement
This section provides that the Regulations commence on the day after the instrument is registered on the Federal Register of Legislation.
Section 3 - Authority
This section provides that the Regulations are made under the Financial Framework (Supplementary Powers) Act 1997.
Section 4 - Schedules
This section provides that the Financial Framework (Supplementary Powers) Regulations 1997 are amended as set out in the Schedule to the Regulations.
Schedule 1 - Amendments
Financial Framework (Supplementary Powers) Regulations 1997
Item 1 - In the appropriate position in Part 4 of Schedule 1AB (table)
This item adds a new table item to Part 4 of Schedule 1AB to establish legislative authority for government spending on an activity administered by the Department of Infrastructure, Transport, Regional Development and Communications (the department).
New table item 425 establishes legislative authority for government spending on the Creative Economy Support Package (the program), which aims to mitigate, and support the recovery of the arts sector from, the adverse effects of the COVID-19 pandemic on that sector.
It is appropriate to include the program in the Financial Framework (Supplementary Powers) Regulations 1997 as government spending on the program will be time limited and not recurrent, and has a limited purpose and expenditure criteria, such as eligibility, which will be clearly described in the grant opportunity guidelines for the program. Further, spending on the program will not affect personal rights and liberties.
Australia's creative and cultural industries provide significant employment and economic benefits, while also supporting cultural expression, community cohesion, social wellbeing and reflecting unique Australian experiences and stories. The COVID-19 pandemic is having unprecedented effects on creative and cultural activity. Many arts and entertainment businesses have stopped activities, and revenue has been significantly, if not completely, reduced. Many arts and entertainment businesses have had to use their cash reserves during the pandemic to remain solvent, leaving little left to fund new activities and events when they are able to re-open.
On 25 June 2020, the Prime Minister, the Hon Scott Morrison MP, and the Minister for Communications, Cyber Safety and the Arts, the Hon Paul Fletcher MP, announced the $250 million JobMaker plan to restart Australia's creative economy, which includes the program. The media release is available at https://minister.infrastructure.gov.au/fletcher/media-release/250-million-jobmaker-plan-restart-australias-creative-economy.
Key components of the program are the Restart Investment to Sustain and Expand Fund (the RISE Fund) and the COVID-19 Arts Sustainability Fund (the Sustainability Fund). These components will operate in tandem with other Commonwealth support measures for the arts, such as concessional Show Starter loans and the Temporary Interruption Fund which are also part of the JobMaker plan for the creative economy.
The RISE Fund will provide financial assistance to eligible arts businesses, which will support employment in the creative and cultural sector - Australian authors, actors and performers, creative educators, roadies, lighting crew, stage builders, and front-of-house retail and administrative staff. The Sustainability Fund will provide financial assistance to significant Commonwealth-funded arts and culture organisations, including in the fields of dance, opera and theatre, to ensure they continue to operate and are able to plan a pathway for recovery from the effects of the COVID-19 pandemic.
RISE Fund
The RISE Fund will provide financial support to assist companies in the arts and entertainment sector to restart activities which have been disrupted by the COVID-19 restrictions (like arts exhibitions and music festivals). This will provide increased employment opportunities in the arts and entertainment sector and allied industries, help build the longer-term financial sustainability of cultural and creative companies, including increased revenue-earning capacity and provide creative and cultural experiences to audiences across Australia.
Funding of $75 million in 2020-21 will be delivered as an open competitive grant opportunity. Special consideration will be given to projects that support music activities, as well as activities that target underserved audiences in outer metropolitan, regional and remote areas. Grants will range between $75,000 and $2 million, depending on the scope of the grant activity and its complexity. Other grant amounts may be considered on a case by case basis, particularly for projects that support music activities, or activities that target underserved audiences in outer metropolitan, regional and remote areas. Funding can be applied for and used on a range of activities, including purchasing or leasing essential equipment for events, online projects and the development of COVIDSafe infrastructure and protocols.
Grant activity will be varied, from smaller projects to larger ones. For instance, a regional tour of a play might benefit from a grant at the lower end of the scale. A grant of $75,000 would provide funds to pay for performer fees, travel between venues, venue hire, marketing, staging costs (for example, building the sets and making costumes), and technical crew to mount the show in each venue (for example, to set up the lights and sound).
This kind of production would provide employment opportunities for the people in the play, the backstage workers, the ticketing and front-of-house staff, the venue managers, plus any café or bar that caters for performances at the venue.
A larger grant of up to $2 million would assist a big event such as a music festival to accommodate a larger crowd under COVIDSafe conditions. A large festival may employ up to 2,000 people, which a grant could support. Funds could also be used to make the venue COVIDSafe, pay for artists appearing at the festival and for services such as security, technical support, food and beverage supply, and audience facilities. The administration, management, design and marketing of the festival would also provide employment opportunities over a number of months (up to a year) depending on the scale of the activity.
Funding under the program will be committed in 2020-21, with activities to take place within one year from execution of a grant agreement. Activities must take place within Australia.
Applications will be assessed on the past performance of the applicant, on a value for money basis, within the available budget and against the following eligibility criteria: the degree to which the grant will contribute to achieving the objectives and outcomes of the RISE Fund; the demonstrated expertise and capacity of the applicant to undertake the grant activity in a COVIDSafe manner; and the demonstrated impact of the grant.
A range of different arts businesses and organisations will be eligible to apply for grant funding, with detailed eligibility and assessment criteria set out in the grant opportunity guidelines to be published on GrantConnect.
Sustainability Fund
The Sustainability Fund will provide 'last resort' financial assistance to key Commonwealth-funded arts organisations that are experiencing significant financial difficulty as a direct result of the COVID-19 pandemic, and have taken all reasonable action to maintain their financial position. It is intended to support the continued sustainability and viability of affected arts organisations, and thereby promote employment and the continued creation and delivery of arts to Australian communities.
The Sustainability Fund will deliver financial assistance through a targeted competitive grants process. Arts organisations will be eligible to receive funding if they meet certain eligibility criteria set out in the grant opportunity guidelines, which will be published on GrantConnect. Only arts organisations that are already party to, or are anticipated to enter into, a funding agreement with the Australian Government (Commonwealth) under certain pre-existing Australian Government arts programs will be eligible. Statutory bodies under Commonwealth, state or territory legislation, including but not limited to national cultural institutions and performing arts companies, are not eligible to apply.
Applications will be assessed within the available budget and against criteria including: the demonstrated impact of the COVID-19 public health restrictions on the organisation's capacity to earn revenue to meet operational costs; the significant financial difficulties faced by the organisation as a result of these restrictions; and all action taken to manage the organisation's financial position in the context of the COVID-19 pandemic, the contribution the arts organisation makes to communities and to supporting the Australian arts ecology.
Grant funding of $35 million will be made available in 2020-21. This grant opportunity will remain open until all funds are allocated or until 30 June 2021, whichever is sooner. The amount of the grant will be the subject of negotiation with the organisation based on financial information provided with the application, and will depend on the complexity of the organisation's operations and financial cash flow position.
Prospective grants will be assessed against objective assessment criteria, set out in the grant opportunity guidelines to be published on GrantConnect.
The grant processes for the RISE Fund and the Sustainability Fund will be separately developed and administered. Successful grant bids will also be published on the GrantConnect website in accordance with the Commonwealth Grants Rules and Guidelines 2017 (CGRGs), and departmental website (www.arts.gov.au).
Grant funding will be administered by the department in consultation with the Australia Council, consistently with the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and instruments made under that Act (including the CGRGs). Grant recipients must enter into a legally binding grant agreement whereby they directly deliver the agreed activity within defined terms and conditions.
The Minister for Communications, Cyber Safety and the Arts (the Minister) will be the decision maker for grant expenditure under the program, and all relevant approvals are subject to the PGPA Act.
The Minister will be supported by experienced assessors from the department. The grant opportunity guidelines specify that input from other expert bodies will or may be sought in making grant decisions, including:
* independent external financial assessors;
* the Australia Council, the Government's principal arts funding body; and
* the Creative Economy Taskforce, a body composed of external experts appointed by the Minister.
The department will then make recommendations to the Minister on applications to be approved.
Funding decisions will be made objectively, and in accordance with the assessment process set out in the grant opportunity guidelines and applicable legislative requirements under the PGPA Act. Applications that meet all eligibility criteria will be ranked against the assessment criteria. Only applications that strongly meet the assessment criteria will be awarded funding.
The Minister's decision is final in all matters, including the approval of grants, the grant funding amounts to be awarded, and the terms and conditions of grants.
Funding will not be approved if the program funding available will not accommodate the funding offer, and/or the application does not represent value for money.
Funding decisions made in connection with the program are not considered appropriate for independent merits review on the basis that it involves the allocation of a finite resource. The Administrative Review Council has recognised that it is justifiable to exclude merits review in relation to decisions of this nature (see paragraphs 4.11 to 4.14 of the guide, What decisions should be subject to merit review?).
With funding requests that are expected to exceed the limit of the available funding, only a proportion of suitable applications can be funded. A reviewed decision made in relation to one grant would also affect decisions in relation to all others, particularly around timing and funding amounts, which could jeopardise achievement of the program objectives.
In order to address accountability issues related to the exclusion of a merits review, the program design and assessment process places great emphasis on the administrative accountability for decisions to allocate funding. This includes ensuring that:
* the criteria for funding are made clear;
* the process includes input and advice from the Creative Economy Taskforce, the Australia Council, and the department, including seeking an independent financial assessment; and
* decisions are made objectively and in accordance with applicable legislative requirements under the PGPA Act.
An applicant who is dissatisfied about the handling of their grant application under the program by the department will be able to lodge a complaint to the Program Manager for consideration.
Applicants who are otherwise affected by decisions or who have complaints about the program also have recourse to the department, in accordance with the department's Client Service Charter, and such complaints would be investigated under the department's complaints policy and procedures. Information on the Client Service Charter and the handling of complaints is available at www.communications.gov.au/who-we-are/department/client-service-charter. If the applicant is not satisfied with the outcome of the department's assessment or investigation of their complaint, they will be able to contact the Commonwealth Ombudsman as a final recourse.
The program responds to extensive consultation across the arts sector and government to understand the magnitude and the nature of the impact of the COVID-19 pandemic on the creative and cultural industries in Australia, and the way forward. Between March and June 2020, the Minister met with approximately 158 people from 133 companies and organisations across the arts sector. The Minister also convened virtual roundtables with peak creative and cultural organisations to hear directly about how they are responding to the COVID-19 challenge as well as their suggestions for support measures. The Minister also consulted with state and territory Arts and Cultural Ministers.
Since 24 March 2020, the Office for the Arts (part of the department) and the Australia Council have held COVID-19 support workshops with peak arts bodies. A similar workshop for the screen sector has also been held by the Office for the Arts and Screen Australia. The discussions in these workshops have also informed the development of the program.
Funding for the program of $110.0 million in 2020-21 was included in the July Economic and Fiscal Update under the measure 'COVID-19 Response Package - communications, cyber safety and the arts'. Details are set out in the Economic and Fiscal Update July 2020, Appendix A: Policy decisions taken since the 2019-20 MYEFO at pages 149 to 151.
Funding will come from Program 6.1: Arts and Cultural Development, which is part of Outcome 6. Details will be set out in the 2020-21 Portfolio Budget Statements for the Infrastructure, Transport, Regional Development and Communications Portfolio.
Noting that it is not a comprehensive statement of relevant constitutional considerations, the objective of the item references the following powers of the Constitution:
* the express incidental power and the executive power (sections 51(xxxix) and 61), including the nationhood aspect;
* the interstate and overseas trade and commerce power (section 51(i));
* the communications power (section 51(v));
* the race power (section 51(xxvi));
* the external affairs power (section 51(xxix)); and
* the territories power (section 122).
Executive power and express incidental power, including the nationhood aspect
The express incidental power in section 51(xxxix) of the Constitution empowers the Parliament to make laws with respect to matters incidental to the execution of any power vested in the Parliament, the executive or the courts by the Constitution. The executive power in section 61 of the Constitution supports activities that are peculiarly adapted to the government of a nation and cannot be carried out for the benefit of the nation otherwise than by the Commonwealth.
The program responds to the nationwide adverse effects of the COVID-19 pandemic on the arts sector, and aims to enhance the resilience and sustainability of participants in that sector. Further, it supports national initiatives in the arts that advance the national interest.
Trade and commerce power
Section 51(i) of the Constitution empowers the Parliament to make laws with respect to 'trade and commerce with other countries, and among the states'.
The program will support interstate and/or international trade and commerce activities of funding recipients in the arts sector and will foster and encourage interstate and/or international tourism.
Communications power
Section 51(v) of the Constitution empowers the Parliament to make laws with respect to 'postal, telegraphic, telephonic and other like services'.
The program may, in part, be used to support the distribution of artistic content over the internet or other communications services.
Race power
Section 51(xxvi) of the Constitution empowers the Parliament to make laws with respect to 'the people of any race for whom it is deemed necessary to make special laws'.
The program may be used to support Indigenous arts organisations.
External affairs power
Section 51(xxix) of the Constitution empowers the Parliament to make laws with respect to 'external affairs'. The external affairs power supports legislation implementing Australia's obligations under international treaties to which it is a party.
Australia has obligations under the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. In particular, Article 7 requires Parties to endeavour to create an environment which encourages individuals and social groups to create, produce, disseminate, distribute and access their own cultural expressions, paying due attention to the special circumstances and needs of various groups.
Australia has obligations under the International Covenant on Economic, Social and Cultural Rights (ICESCR), including:
* Article 2(1) of the ICESCR which provides that each State Party undertakes to take steps to progressively realise the rights recognised in the Covenant 'by all appropriate means, including particularly the adoption of legislative measures';
* Article 6 of the ICESCR which provides that States Parties recognise the right to work and will take appropriate steps to achieve the realisation of this right including through 'technical and vocational guidance and training programmes, policies and techniques'; and
* Article 15 of the ICESCR which recognises the right to take part in cultural life, and provides that the steps taken by States Parties to achieve this right include those necessary for the conservation, development and diffusion of culture.
Australia also has obligations under the International Labour Organization's Convention concerning Employment Policy (ILO Convention 122) and Convention concerning Vocational Guidance and Vocational Training in the Development of Human Resources (ILO Convention 142). In particular:
* Articles 1 and 2 of the ILO Convention 122 require each Member to pursue 'an active policy designed to promote full, productive and freely chosen employment', including deciding on keeping under review measures to attain this objective; and
* Article 1 of the ILO Convention 142 requires each Member to adopt policies and programs of vocational guidance and training, linked with employment.
The program will support Australia's implementation of these obligations. It will support and promote employment in the arts sector, including by supporting arts events and productions that will create jobs and by mitigating or preventing job losses resulting from the COVID-19 pandemic. It will also promote the development and diffusion of cultural expression and the arts by supporting the delivery of arts events and productions.
Territories power
Section 122 of the Constitution empowers the Parliament to 'make laws for the government of any territory'.
The program may be used to support participants in the arts sector in a territory, or in relation to a territory.
Commonwealth Numbered Regulations - Explanatory Statements