Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2004 2005 2006 - 2007
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
FORESTRY MARKETING AND RESEARCH AND DEVELOPMENT
SERVICES BILL 2007
EXPLANATORY MEMORANDUM
(Circulated by Authority of the Minister for Fisheries, Forestry and Conservation,
Senator the Hon Eric Abetz)
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FORESTRY MARKETING AND RESEARCH AND DEVELOPMENT
SERVICES BILL 2007
GENERAL OUTLINE
This bill is one of two bills designed to provide for the creation of a forestry industry
services company to provide marketing and research and development and other
industry services to the forestry industry. The new company will replace the current
Commonwealth statutory authority, Forest and Wood Products Research and
Development Corporation (FWPRDC).
The new company will be limited by guarantee under the Corporation Act 2001, and
will assume the research and development functions currently provided by the
FWPRDC and incorporate the new functions of marketing and promotion. Under
FWPRDC's enabling legislation, the Primary Industries and Energy Research and
Development Act 1989 the FWPRDC could not undertake marketing and promotion
activities.
The new company will be not-for-profit and all levy payers who pay statutory levies
and state growers who pay contractual payments will be eligible to register for
membership and then be eligible for voting rights in the company, allocated according
to the amount of levy or contractual payments paid.
This bill provides the Minister with the power to enter into a funding contract with a
company to enable it to receive and administer levies and state grower contractual
payments collected by the Commonwealth for industry promotion, research and
development, and the Commonwealth's matching funding for eligible research and
development expenditure. The Minister may then declare the company with which the
contract is made to be the industry services body.
The contract between the Commonwealth and the company will set certain obligations
and accountability requirements for the industry services body, including provisions
relating to the use of levies and contractual payments, matching research and
development funding and the transfer of assets and liabilities from FWPRDC. The
detail of the new industry services body's accountability arrangements to its members
and to the Commonwealth will be outlined in the contract and the constitution of the
company.
FINANCIAL IMPACT STATEMENT
The second bill, the Forestry Marketing and Research and Development Services
(Transitional and Consequential Provisions) Bill 2007 provides for the transfer of assets
and liabilities and current employees associated with FWPRDC to the new industry
services body.
The net value of assets (including cash balances) and liabilities to be transferred to the
new industry services body is approximately $6.4 million.
The final outcome will be determined following the financial transfer on the cessation
date of the FWPRDC.
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NOTES ON CLAUSES
Part 1 Preliminary
Clause 1: Short title
This clause provides for the Act to be called the Forestry Marketing and Research and
Development Services Act 2007.
Clause 2: Commencement
This clause provides for the Act to come into effect the day after it receives Royal
Assent.
Clause 3: Simplified outline of this Act
This clause provides a simplified outline of the Act.
Clause 4: Definitions
This clause provides for terms of the Act to be defined.
Clause 5: Extensions to external Territories
This clause provides for the Act to extent to all external Territories.
Clause 6: Application of this Act
This clause provides for the Act to apply both within and outside Australia.
Part 2 Funding contract
Clause 7: Simplified outline of this Part
This clause provides a simplified outline of the Part.
Clause 8: Funding contract
This clause provides for the Minister, on behalf of the Commonwealth, to enter into or
vary a contract with a company which will allow the Commonwealth to make forestry
service and matching research and development payments to the company.
Before the Commonwealth enters into or varies a contract with a company, the Minister
must be satisfied that the funds are spent accordingly.
The forestry service payments can be spent on marketing, promotion, research and
development activities or other activities for the benefit of the Australian forestry
industry and/or to repay the Commonwealth for expenses (the administrative expenses)
in relation to the collection and recovery of the tax-related amounts, the administration
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of the funding contract and refunds in relation to tax-related amounts. The matching
payments can be spent on research and development activities for the benefit of the
Australian forestry industry and the Australian community generally and/or to repay the
Commonwealth for the administrative expenses incurred.
The funding contract does not oblige the Commonwealth to pay the full amounts that
could be paid out the money appropriated.
In addition, the clause provides that the contract may include provisions relating to the
assets and liabilities being transferred from the FWPRDC to the company under the
Forestry Marketing and Research and Development Services (Transitional and
Consequential Provisions) Act 2007.
The Minister must table a new or varied contract in each House of the Parliament within
15 sitting days of that House.
Clause 9: Appropriation for payments under funding contract
This clause appropriates the Consolidated Revenue Fund for the purposes of making
payments to the industry services body under the funding contract.
This clause sets the overall limits on the appropriation for the Commonwealth to make
tax-related amounts and matching payments to the industry services body. In terms of
the matching payments, the clause also sets annual limits on what can be paid to the
industry services body. The annual limit is the lesser of either 0.5% of the gross value
of production (GVP) of the Australian forestry industry for the financial year or 50% of
the amount spent by the industry services body on research and development activities
that qualify under the funding contract in that financial year. It provides for regulations
to be made to prescribe the manner in which the Minister is to determine the GVP of the
Australian forestry industry.
This clause allows for research and development expenditure that is not "50% matched"
in one financial year, because of the cap based on the GVP of the Australian forestry
industry, to be carried forward into later years. The clause also provides a formula for
calculating the unmatched research and development excess.
A special appropriation for the payment of levies out of the Consolidated Revenue Fund
is required to provide assurance to industries that levy collected and Commonwealth
matching funds will be paid out to industry service bodies. Legislation prevents the
payment of amounts greater than the total amount of levy collected and matching funds
due.
Part 3 Industry services body
Clause 10: Simplifies outline of this Part
This clause provides a simplified outline of the Part.
Clause 11: Declaration of industry services body
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This clause provides for the Minister, on behalf of the Commonwealth, to declare a
company to be the industry services body if there is a contract under Part 2 with the
company and the Minister is satisfied that the company will comply with its contractual
and statutory obligations.
This declaration must be tabled by the Minister in each House of the Parliament within
15 sitting days of each House.
A declaration made under Clause 8 subsection (1) is not a legislative instrument within
the meaning of section 5 of the Legislative Instruments Act 2003.
Clause 12: Cessation of declaration industry services body
This clause enables the Minister, on behalf of the Commonwealth, to declare that the
company that is the industry services body will cease to be the industry services body
when the company gives a written request to the Minister to declare such, when the
Minister has reasonable grounds to believe that the company has contravened this Act
or the funding contract, when the Minister has reasonable grounds to believe the
company's constitution is no longer appropriate or when the company has failed to
comply with its constitution, when an administrator of the company is appointed, when
the company starts to be wound up or ceases to carry on a business, when a receiver of
property of the company is appointed or when the company enters into a compromise or
arrangement with some or all of its creditors. The declaration must specify the day on
which the company is to cease to be the industry.
A declaration made under Clause 8A subsection (1) is not a legislative instrument
within the meaning of section 5 of the Legislative Instruments Act 2003.
Part 4 Miscellaneous provisions
Clause 13: Ministerial directions to industry services body in an emergency
This clause provides for the Minister to give written direction to the industry services
body if the direction is in Australia's national interest because of exceptional and urgent
circumstances; if the direction would not require the body to incur expenses greater than
the amounts the body will receive under the funding contract during the period to which
the direction relates; and if the Minister has given the body's directors an adequate
opportunity to discuss with the Minister the need for the direction and the impact of
compliance on the body's commercial activities. The direction must be made for a
purpose that is within the Commonwealth's legislative power.
Subsection (3) requires the Minister to publish a copy of the direction in the Gazette as
soon as practicable after giving the direction and to table a copy of the direction in each
House of Parliament within 5 sitting days of that House after giving the direction.
Subsection (4) requires the industry service body to include particulars of the direction
and an assessment of the impact of the direction on the industry body's operations in the
annual report for the periods to which the direction relates.
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Subsection (5) allows for (3) and (4) to not apply to the written direction if compliance
with the subsections would prejudice the industry body's commercial activities or if the
Minister determines in writing that compliance would be contrary to the public interest.
A direction made under subsection (1) (written direction regarding exceptional and
urgent circumstances) or a determination made under subsection (5) is not a legislative
instrument within the meaning of section 5 of the Legislative Instruments Act 2003.
Clause 14: Delegations
This clause provides for the Minister to delegate any or all of his or her powers and
functions under this Bill to either the Secretary of the Department or an SES employee
or acting SES employee of the Department. The delegate, in exercising these powers or
functions, must comply with any directions of the Minister.
Clause 15: Compensation for acquisition of property
This clause provides for compensation to be paid by the Commonwealth to a person
from whom property is acquired on other than just terms as a result of the operation of
the Bill. If the Commonwealth and the person in question cannot agree on the amount of
any such compensation to be paid, the Federal Court may, on application by the person
from whom the property was acquired, determine what is a reasonable amount of
compensation for the acquisition of the property.
Clause 16: Regulations
This clause provides for the Governor-General to make regulations under the Act.
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