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Egg Industry Service Provision Bill 2002

Part 3 Funding of the industry services body

   

7   Funding contract

             (1)  The Minister may, on behalf of the Commonwealth, enter into a contract for the purposes of this subsection with an eligible body that provides for the Commonwealth to make payments of the following kinds to the body if the body is declared to be the industry services body:

                     (a)  payments referred to as promotion payments ;

                     (b)  payments referred to as R&D payments ;

                     (c)  payments made in respect of particular financial years, referred to as matching payments .

             (2)  Before entering into a contract for the purposes of subsection (1), the Minister must be satisfied that the terms of the contract make adequate provision to ensure that:

                     (a)  promotion payments are spent by the body on the promotion of eggs and the provision of industry services for the benefit of the Australian egg industry; and

                     (b)  R&D payments are spent by the body on research and development activities for the benefit of the Australian egg industry; and

                     (c)  matching payments are spent by the body on research and development activities for the benefit of the Australian egg industry and the Australian community generally.

             (3)  The contract may require the Commonwealth to pay amounts up to, but not exceeding, the limits applicable under section 8.

Note:          For example, the contract may provide that the Commonwealth will pay a lesser amount so it can deduct the costs of collecting promotion amounts and R&D amounts and have the capacity to deal appropriately with refunds and payments made in error.

             (4)  The contract may include provisions relating to assets and liabilities that are transferred to the body under the contract or the Egg Industry Service Provision (Transitional and Consequential Provisions) Act 2002 . This subsection does not impliedly limit the matters that may be included in the contract.

             (5)  This section does not impliedly limit the executive power of the Commonwealth to enter into agreements.

8   Appropriation for payments under funding contract

             (1)  The Consolidated Revenue Fund is appropriated for the purposes of payments by the Commonwealth under the funding contract.

Overall limits for payments

             (2)  The total limit on the appropriation for the purposes of each type of payment under the funding contract is:

                     (a)  for promotion payments—the total amount of promotion amounts; and

                     (b)  for R&D payments—the total amount of R&D amounts; and

                     (c)  for matching payments—the total amount of matching amounts.

Matching payments—annual limit

             (3)  For matching payments in respect of a particular financial year, the limit on the appropriation is the lesser of:

                     (a)  0.5% of the amount determined by the Minister to be the gross value of egg production in Australia in that financial year; and

                     (b)  50% of the amount spent by the industry services body in that financial year on activities that qualify, under the funding contract, as research and development activities.

             (4)  For the purposes of subsection (3), the regulations may prescribe the manner in which the Minister is to determine the gross value of egg production in Australia in a financial year.

Matching payments—unmatched R&D excess

             (5)  If there is an unmatched R&D excess for a financial year, the amount spent by the eligible body in the following financial year on activities that qualify, under the funding contract, as research and development activities is taken, for the purposes of this section (including for the purposes of this subsection and subsection (6)), to be increased by the amount of the unmatched R&D excess.

Note:          This means that research and development expenditure that is not “50% matched” in one financial year because of the cap in paragraph (2)(c) or (3)(a) can be carried forward into later years.

             (6)  For the purposes of subsection (5), there is an unmatched R&D excess for a financial year if:

                     (a)  the eligible body spends a particular amount (the R&D spend amount ) in the financial year on activities that qualify, under the funding contract, as research and development activities; and

                     (b)  because of the operation of paragraph (2)(c) or paragraph (3)(a), the matching payments for the financial year are less than 50% of the R&D spend amount;

and the amount of the unmatched R&D excess is: