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Clean Energy Bill 2011

Part 7 Jobs and Competitiveness Program

Division 1 Introduction

143   Aim and objects

             (1)  The aim of this Part is to recognise issues relating to the impact of this Act and the associated provisions on the international competitiveness of activities that are:

                     (a)  identified as emissions-intensive trade-exposed activities; and

                     (b)  carried on in Australia.

             (2)  The objects of this Part are:

                     (a)  to enable the identification of activities as emissions-intensive trade-exposed activities; and

                     (b)  to reduce the incentives for such an activity to be located in, or relocated to, foreign countries as a result of different climate change policies applying in Australia compared to foreign countries; and

                     (c)  to provide transitional assistance in respect of such an activity if carried on in Australia; and

                     (d)  to provide such assistance in a manner that is economically and environmentally efficient;

until such assistance is no longer warranted, having regard to:

                     (e)  whether measures to reduce emissions of carbon dioxide and other greenhouse gases that have an impact that is comparable to the impact of Australian emissions reduction measures (including the impact of associated assistance) have been implemented in respect of markets:

                              (i)  that are outside Australia; and

                             (ii)  that are for goods produced as a result of such an activity (whether carried on in or outside Australia); and

                            (iii)  in which persons who carry on such an activity in Australia compete; and

                      (f)  whether foreign countries that are responsible for the substantial majority of the world’s emissions of carbon dioxide and other greenhouse gases have implemented measures to reduce those emissions that have an impact that is comparable to the impact of Australian emissions reduction measures (including the impact of associated assistance); and

                     (g)  any other relevant matters.

144   Simplified outline

                   The following is a simplified outline of this Part:

•      The regulations may formulate a program, to be known as the Jobs and Competitiveness Program, for the issue of free carbon units in respect of activities that:

               (a)     under the program, are taken to be emissions-intensive trade-exposed activities; and

              (b)     are, or are to be, carried on in Australia during a financial year specified in the program.

•      The Jobs and Competitiveness Program may:

               (a)     require a recipient of free carbon units to relinquish units; and

              (b)     impose reporting or record-keeping requirements on a recipient of free carbon units.

•      The Productivity Commission will conduct periodic reviews of:

               (a)     the operation of assistance arrangements under the Jobs and Competitiveness Program; and

              (b)     the impact of this Act and the associated provisions on emissions-intensive trade-exposed industries; and

               (c)     the economic and environmental efficiency of assistance arrangements under the Jobs and Competitiveness Program.



 

Division 2 Formulation of the Jobs and Competitiveness Program

145   Jobs and Competitiveness Program

             (1)  The regulations may formulate a program (to be known as the Jobs and Competitiveness Program ) for the issue of free carbon units in respect of activities that:

                     (a)  under the program, are taken to be emissions-intensive trade-exposed activities; and

                     (b)  are, or are to be, carried on in Australia during an eligible financial year specified in the program.

             (2)  The Jobs and Competitiveness Program must provide that free carbon units must not be issued to a person in accordance with the program unless the person:

                     (a)  meets such requirements as are specified in the program; and

                     (b)  has a Registry account.

             (3)  The Jobs and Competitiveness Program must not provide that the extraction of coal is an activity that, under the program, is taken to be an emissions-intensive trade-exposed activity.

             (4)  The Minister must take all reasonable steps to ensure that regulations are made for the purposes of subsection (1) before 1 March 2012.

             (5)  In making a recommendation to the Governor-General about regulations that amend regulations made for the purposes of subsection (1), the Minister must have regard to the following matters:

                     (a)  the aim and objects of this Part;

                     (b)  the most recent report given to the Productivity Minister by the Productivity Commission in relation to an inquiry mentioned in section 155;

                     (c)  the principle that changes that will have a negative effect on recipients of assistance under the Jobs and Competitiveness Program should not take effect before the later of the following:

                              (i)  1 July 2017;

                             (ii)  the end of the 3-year period that begins when the reduction is announced;

                     (d)  such other matters (if any) as the Minister considers relevant.

146   Relinquishment requirement

             (1)  The Jobs and Competitiveness Program may provide that, if:

                     (a)  a number of free carbon units have been issued to a person in accordance with the program; and

                     (b)  any of the following subparagraphs applies:

                              (i)  a specified event happens;

                             (ii)  a specified circumstance comes into existence;

                            (iii)  the Regulator is satisfied about a specified matter;

the person is required to relinquish a number of carbon units ascertained in accordance with the program.

Note:          An administrative penalty is payable under section 212 for non-compliance with a relinquishment requirement under the Jobs and Competitiveness Program.

             (2)  The number of carbon units required to be relinquished by the person must not exceed the number of units mentioned in paragraph (1)(a).

             (3)  Subsection (1) does not, by implication, limit subsection 145(1).

147   Reporting requirement

Scope

             (1)  This section applies to a person if free carbon units have been issued to the person in accordance with the Jobs and Competitiveness Program.

Requirement

             (2)  The Jobs and Competitiveness Program may make provision for and in relation to requiring the person to give one or more written reports to the Regulator.

             (3)  Subsection (2) does not, by implication, limit subsection 145(1).

148   Record-keeping requirement

Scope

             (1)  This section applies to a person if free carbon units have been issued to the person in accordance with the Jobs and Competitiveness Program.

Requirement

             (2)  The Jobs and Competitiveness Program may make provision for and in relation to requiring the person to:

                     (a)  make records of information specified in the program; and

                     (b)  retain such a record, or a copy, for 5 years after the record was made.

             (3)  Subsection (2) does not, by implication, limit subsection 145(1).

149   Other matters

             (1)  The Jobs and Competitiveness Program may make provision for and in relation to the following matters:

                     (a)  applications for free carbon units;

                     (b)  the approval by the Regulator of a form for such an application;

                     (c)  information that must accompany such an application;

                     (d)  documents that must accompany such an application;

                     (e)  the method of calculating the number of free carbon units to be issued to a person in accordance with the program.

             (2)  The Jobs and Competitiveness Program may provide that an application for free carbon units must be accompanied by a prescribed report.

             (3)  The Jobs and Competitiveness Program may provide for verification by statutory declaration of statements in applications for free carbon units.

             (4)  The Jobs and Competitiveness Program may provide for the Regulator to give information to prospective applicants to assist them in preparing applications for free carbon units.

             (5)  The information under subsection (4) may include information in relation to the ways in which volumes of production may be measured, by prospective applicants, for the purposes of preparing applications for free carbon units.

             (6)  Subsection (5) does not limit subsection (4).

             (7)  This section does not, by implication, limit subsection 145(1).

150   Ancillary or incidental provisions

             (1)  The Jobs and Competitiveness Program may contain ancillary or incidental provisions.

             (2)  Subsection (1) does not, by implication, limit subsection 145(1).



 

Division 3 Compliance with reporting and record-keeping requirements under the Jobs and Competitiveness Program

151   Compliance with reporting and record-keeping requirements

Reporting requirements

             (1)  If a person is subject to a requirement under the Jobs and Competitiveness Program to give a report to the Regulator, the person must comply with that requirement.

Record-keeping requirements

             (2)  If a person is subject to a requirement under the Jobs and Competitiveness Program to:

                     (a)  make a record of information; or

                     (b)  retain such a record or a copy;

the person must comply with that requirement.

Ancillary contraventions

             (3)  A person must not:

                     (a)  aid, abet, counsel or procure a contravention of subsection (1) or (2); or

                     (b)  induce, whether by threats or promises or otherwise, a contravention of subsection (1) or (2); or

                     (c)  be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection (1) or (2); or

                     (d)  conspire with others to effect a contravention of subsection (1) or (2).

Civil penalty provisions

             (4)  Subsections (1), (2) and (3) are civil penalty provisions .

Note:          Part 17 provides for pecuniary penalties for breaches of civil penalty provisions.



 

Division 4 Special information-gathering powers

152   Minister may obtain information

Scope

             (1)  This section applies to a constitutional corporation if:

                     (a)  a person (who may be the corporation) has indicated to the Commonwealth that the person believes that an activity may be, or should be, eligible for emissions-intensive trade-exposed assistance; and

                     (b)  that activity is not an activity that, under the Jobs and Competitiveness Program, is taken to be an emissions-intensive trade-exposed activity; and

                     (c)  the Minister believes on reasonable grounds that the corporation has information that:

                              (i)  relates to the activity; and

                             (ii)  is likely to assist the Commonwealth to formulate or vary the policy embodied in the Jobs and Competitiveness Program.

Request for information and report

             (2)  The Minister may, by written notice given to the corporation:

                     (a)  request the corporation to give to the Minister, within the period and in the manner and form specified in the notice, any such information; and

                     (b)  request that the information be accompanied by a report specified in the notice.

             (3)  A period specified under subsection (2) must not be shorter than 60 days after the notice is given.

Request for information

             (4)  The Minister may, by written notice given to the corporation, request the corporation to give to the Minister, within the period and in the manner and form specified in the notice, any such information.

             (5)  A period specified under subsection (4) must not be shorter than 30 days after the notice is given.

153   No assistance for 2 eligible financial years if corporation refuses or fails to comply with request for information

Scope

             (1)  This section applies if:

                     (a)  a constitutional corporation is given a request under subsection 152(2) or (4) at a particular time; and

                     (b)  the corporation is capable of complying with the request; and

                     (c)  the corporation refuses or fails to comply with the request; and

                     (d)  the Minister notifies the Regulator, in writing, that the Minister considers that the non-compliance is significant.

No assistance for 2 eligible financial years

             (2)  No free carbon units that have a vintage year of:

                     (a)  the first eligible financial year that begins after that time; or

                     (b)  the eligible financial year that next follows the eligible financial year mentioned in paragraph (a);

are to be issued to the corporation in accordance with the Jobs and Competitiveness Program.

154   Disclosure of information to the Regulator

Scope

             (1)  This section applies to information obtained under section 152.

Disclosure

             (2)  The Minister may disclose the information to the Regulator for the purposes of, or in connection with, the performance of the functions, or the exercise of the powers, of the Regulator.

Other powers of disclosure not limited

             (3)  This section does not, by implication, limit the Minister’s powers to disclose the information to a person other than the Regulator.



 

Division 5 Productivity Commission inquiries

155   Productivity Commission inquiries

Review period

             (1)  For the purposes of this section, each of the following is a review period :

                     (a)  the 12-month period ending at the end of 30 June 2015;

                     (b)  the period beginning at the start of 1 July 2015 and ending at the end of 31 December 2016;

                     (c)  the period beginning at the start of 1 January 2017 and ending at the end of 31 December 2018;

                     (d)  the 5-year period beginning at the start of 1 January 2019;

                     (e)  each succeeding 5-year period.

Inquiry by Productivity Commission

             (2)  During each review period, the Productivity Minister must, under paragraph 6(1)(a) of the Productivity Commission Act 1998 , refer the following matters to the Productivity Commission for inquiry:

                     (a)  the matter of the operation of assistance arrangements under the Jobs and Competitiveness Program;

                     (b)  the matter of the impact of this Act and the associated provisions on emissions-intensive trade-exposed industries;

                     (c)  the matter of the economic and environmental efficiency of assistance arrangements under the Jobs and Competitiveness Program.

             (3)  In referring the matters to the Productivity Commission for inquiry, the Productivity Minister must, under paragraph 11(1)(b) of the Productivity Commission Act 1998 , specify the review period in which the referral occurs as the period within which the Productivity Commission must submit its report on the inquiry to the Productivity Minister.

Note:          Under section 12 of the Productivity Commission Act 1998 , the Productivity Minister must cause a copy of the Productivity Commission’s report to be tabled in each House of Parliament.

Matters relating to industry, industry development and productivity

             (4)  For the purposes of paragraph 6(1)(a) of the Productivity Commission Act 1998 , each matter mentioned in subsection (2) of this section is taken to be a matter relating to industry, industry development and productivity.

156   Matters to which the Productivity Commission must have regard

Scope

             (1)  This section applies to an inquiry mentioned in section 155.

Matters

             (2)  In holding the inquiry, and preparing its report on the inquiry, the Productivity Commission must have regard to the following matters:

                     (a)  whether assistance under the Jobs and Competitiveness Program is still warranted having regard to the matters in paragraphs 143(2)(e) and (f);

                     (b)  the progress made by persons carrying on emissions-intensive trade-exposed activities towards achieving best practice for energy and emissions efficiency in relation to the industrial sector to which those activities relate;

                     (c)  whether there are additional activities that should be identified as emissions-intensive trade-exposed activities for the purposes of the Jobs and Competitiveness Program;

                     (d)  the extent to which foreign countries have implemented emissions reduction measures that have an impact that is comparable to the impact of Australian emissions reduction measures (including the impact of associated assistance);

                     (e)  whether it is:

                              (i)  feasible; and

                             (ii)  consistent with the aim and objects of this Part;

                            to change the method of issuing free carbon units in accordance with the Jobs and Competitiveness Program to a method based on an assessment of the anticipated increase in international prices of individual emissions-intensive trade-exposed industry products that would result from foreign countries implementing emissions reduction measures that have an impact that is comparable to the impact of Australian emissions reduction measures (including the impact of associated assistance);

                      (f)  whether windfall gains are being conferred on persons carrying out emissions-intensive trade-exposed activities as a result of the Jobs and Competitiveness Program;

                     (g)  to the extent to which there is no cap on free carbon units issued in accordance with the Jobs and Competitiveness Program for particular facilities, the effect of those facilities not being subject to such a cap;

                     (h)  the growth in the emissions-intensive trade-exposed sector, and implications of that growth for the number of free carbon units issued within the limits of the carbon pollution cap;

                      (i)  the appropriateness of any supplementary allocations of free carbon units issued in accordance with the Jobs and Competitiveness Program in respect of liquefied natural gas production;

                      (j)  the impact of this Act and the associated provisions on the competitiveness of emissions-intensive trade-exposed industries;

                     (k)  whether the assistance under the Jobs and Competitiveness Program for a specific industry should be changed;

                      (l)  whether the Jobs and Competitiveness Program is supporting Australia’s medium-term and long-term emissions reduction objectives;

                    (m)  the extent to which the Jobs and Competitiveness Program gives effect to:

                              (i)  the aim and objects of this Part; and

                             (ii)  the objects of this Act;

                     (n)  any other matters specified in a legislative instrument made by the Productivity Minister;

                     (o)  such other matters (if any) as the Productivity Commission considers relevant.

             (3)  In having regard to the matters in paragraphs (2)(d) and (k), the Productivity Commission must consider the following:

                     (a)  whether less than 70% of the relevant competitors of each emissions-intensive trade-exposed industry are located in foreign countries where the impact on those competitors of emissions reduction measures (including the impact of associated assistance) is comparable to the impact on the industry of Australian emissions reduction measures (including the impact of associated assistance);

                     (b)  whether, having regard to the matter in paragraph (a), the application of the rate of assistance for a specific industry should pause when assistance rates reach:

                              (i)  90% for highly emissions-intensive industries; and

                             (ii)  60% for moderately emissions-intensive industries.

             (4)  In having regard to the matter in paragraph (2)(e), the Productivity Commission must consider whether the relevant method is the most effective and efficient means of achieving the aim and objects of this Part.

             (5)  In having regard to the matters in paragraphs (2)(f) and (j), the Productivity Commission must consider the following:

                     (a)  an analysis of the carbon cost passed on (to and by emissions-intensive trade-exposed industries);

                     (b)  the reduction in emissions of greenhouse gases resulting from emissions-intensive trade-exposed activities;

                     (c)  the effect of a declining rate of assistance under the Jobs and Competitiveness Program on emissions-intensive trade-exposed activities.

             (6)  Subsection (2) of this section has effect in addition to section 8 of the Productivity Commission Act 1998 .

             (7)  In conducting the inquiry, the Productivity Commission must consult the Climate Change Authority about the following matters:

                     (a)  the matter mentioned in paragraph (2)(l);

                     (b)  the matter mentioned in paragraph (2)(m).

157   Report of inquiry

Scope

             (1)  This section applies to the report of an inquiry mentioned in section 155.

Recommendations

             (2)  Recommendations in the report may include recommendations regarding the rates of assistance under the Jobs and Competitiveness Program over time that are specified in the regulations.

             (3)  When making recommendations in accordance with subsection (2), the Productivity Commission must have regard to the principle that changes that will have a negative effect on recipients of assistance under the Jobs and Competitiveness Program should not take effect before the later of the following:

                     (a)  1 July 2017;

                     (b)  the end of the 3-year period that began when the change was announced.

Government response to recommendations

             (4)  If the report sets out one or more recommendations to the Commonwealth Government:

                     (a)  as soon as practicable after receiving the report, the Productivity Minister must cause to be prepared a statement setting out the Commonwealth Government’s response to each of the recommendations; and

                     (b)  the Productivity Minister must cause copies of the statement to be tabled in each House of the Parliament before the later of the following:

                              (i)  the end of the period of 25 sitting days of that House after the day on which the Productivity Minister receives the report;

                             (ii)  the end of the 6-month period beginning on the day on which the Productivity Minister receives the report.

             (5)  The Commonwealth Government’s response to the recommendations may have regard to the views of the following:

                     (a)  the Climate Change Authority;

                     (b)  the Regulator;

                     (c)  the Productivity Commission;

                     (d)  such other persons as the Productivity Minister considers relevant.

Publication of report

             (6)  As soon as practicable after the Productivity Minister tables the report in each House of the Parliament, the Productivity Commission must publish the report on the Productivity Commission’s website.

Note:          The Productivity Minister must cause a copy of the report to be tabled in each House of Parliament—see section 12 of the Productivity Commission Act 1998 .

158   No limit on Productivity Minister’s powers

                   This Division does not limit the Productivity Minister’s powers under paragraph 6(1)(a) of the Productivity Commission Act 1998 .