Chapter 2
Individual 2012–13 Annual Reports
2.1
On this occasion, the committee has decided to examine in more detail the
following annual reports tabled by 30 April 2014 or before the tabling of this
Report on Annual Reports:
2.2
For the Industry portfolio:
2.3
For the Treasury portfolio:
- Foreign
Investment Review Board.
Reports under the Industry portfolio
Innovation Australia—annual report 2012–13
Reporting requirements
2.4
The committee considers that Innovation Australia has met its reporting
requirements under the Industry Research and Development Act 1986
(IR&D Act).
2.5
However, the committee notes some recurring issues identified in
previous reports remain in the 2012‒13
report, including:
-
the date missing on the transmittal letter; and
-
the lack of a compliance index indicating clearly the report was
prepared in accordance with identified sections of the IR&D Act data.
Operational matters
2.6
Innovation Australia is an independent statutory body established to
assist with the administration of the Australian Government's innovation and
venture capital programs designed to support industry innovation.[1]
2.7
Established on 27 September 2007, Innovation Australia is an
amalgamation of the former Industry Research and Development (IR&D) Board
and the Venture Capital Registration (VCR) Board (formerly known as the Pooled
Development Funds Registration Board). On its establishment, Innovation
Australia assumed the roles, responsibilities and powers of the two former
Boards. Its aim is to promote the development, and improve the efficiency and
international competitiveness, of Australian industry by encouraging
research and development, innovation and venture capital activities. It also
provides advice to government in relation to the operation of income tax law
legislation (Income Tax Assessment Act 1936 and the Income Tax
Assessment Act 1997). In 2012‒13,
Innovation Australia reported to the Minister for Industry and Innovation.[2]
2.8
During the reporting period, Innovation Australia undertook an analysis
of businesses with international development and expansion strategies that had
been recipients of Australian Government innovation grants. The results found
that participants looking to expand to international markets, partner and grow
globally, show stronger performance in terms of employment levels, average
turnover, research and development expenditure and intellectual property
protection.[3]
2.9
During 2012‒13,
Innovation Australia's programs were delivered by AusIndustry, a division
within the Department of Industry, Innovation, Climate Change, Science,
Research and Tertiary Education (and which has since changed to the Department
of Industry following machinery of government changes).[4]
2.10
As of 30 June 2013, the following eight committees with specific
functions reported to Innovation Australia: R&D Incentives Committee;
R&D Tax Incentive Advisory Committee; Commercialisation Australia Board;
Clean Technology Investment Committee; Clean Technology Food and Foundries
Investment Committee; Clean Technology Innovation Committee; Innovation Grants
Committee; and Venture Capital Committee.[5]
2.11
Among some of the key outputs administered and delivered by Innovation
Australia during the 2012‒13
reporting period included:[6]
-
the Clean Technology Investment Program, which received 341 applications
and 200 approved grants at a total grant value of more than $130 million;
-
the Clean Technology Innovation Program, which received 63 applications
and 17 approved grants at a total grant value of more than $22 million;
-
Commercialisation Australia, which assisted
161 businesses, researchers and entrepreneurs with grants valued in excess
of $55 million; and
-
the Research and Development Tax Incentive, which registered 8,270 companies
(9,210 research and development performing entities) for the 2011‒12 income year with
$12.80 billion in reported industry research and development expenditure.
2.12
Other highlights during the 2012‒13
reporting period included:
-
the Clean Technology Food and Foundries Investment Committee,
established on 25 September 2012, which received 424 applications for its
program and 271 approved grants at a total grant value of more than $124
million;[7]
-
Innovation Australia's contribution to major areas of police
advice in 2013‒ 13,
including its input to the 2012 Review of Venture Capital and
Entrepreneurial Skills in Australia and the 2011 Board of Taxation
Review of Arrangements under the Venture Capital Limited Partnership Regime;[8]
and
-
Innovation Australia's review of the recommendations of the Smarter
Manufacturing for a Smarter Australia report of the non-government members
of the Prime Minister's Taskforce on Manufacturing; as a result of which
Innovation Australia identified strategic areas for government intervention in
its comprehensive submission to the government.[9]
2.13
In the Chairman's final report, Mr Miles AM, emphasised the importance
of Innovation Australia's work in helping to create the type of innovation
system that drives success and turns ideas and concepts into new products,
processes and services. He cautions that Australian business and industry must
embrace innovation, if they are to remain competitive, productive and able to
collaborate with the research sector to achieve growth and prosperity.[10]
Reports under the Treasury portfolio
Foreign Investment Review Board—annual report 2012–13
Reporting requirements
2.14
The committee notes that the annual reports of the Foreign Investment
Review Board (FIRB) are not statutorily mandated, but prepared in accordance
with the Board's responsibility to advise the government on foreign investment
matters.
2.15
The Board is a non-statutory body responsible for advising the Treasurer
on Australia's Foreign Investment Policy (the Policy) and its administration.
It examines foreign investment proposals submitted under the Foreign
Acquisitions and Takeovers Act 1975 (the Act) and under the Policy (the
latter being the second element of Australia’s foreign investment screening
regime). The Board is supported by the Department.[11]
Operational matters
2.16
In 2012‒13,
12,731 foreign investment proposals were approved from a total of 13,322
applications. Of the 13,322 applications for foreign investment approval, none
were rejected, though 446 were withdrawn and 145 were exempt as not subject to
the Policy or the Act.[12]
2.17
Of the 12,731 applications decided during the reporting period (those
approved or rejected but not those withdrawn or exempt), 11,840 were decided
within the Treasury's Foreign Investment and Trade Policy Division (the
Division)[13]
under the Treasurer's authorisation and 891 were decided by a Treasury
minister.[14]
Of these approved applications, 5,535 were approved without conditions imposed
and 7,196 were approved subject to conditions, all of which were in the
real estate sector.[15]
In contrast to 2012‒13
when there were no proposals rejected, 13 real estate‒related proposals were rejected in
2011‒12.[16]
2.18
The real estate sector was the largest destination by value, with
approvals in 2012‒13
of $51.9 billion. Other major sectors included: mineral exploration and
development, with approved proposal investment of $45.1 billion and services
(excluding tourism), with approved proposed investment of $25.9 billion.[17]
2.19
In 2012‒13,
the United States remained Australia's largest source country for approved
proposed investment with $20.6 billion in value. It was followed by Switzerland
($18.4 billion), China ($15.8 billion), Canada ($14.4 billion) and the United
Kingdom ($6.8 billion) as the other major source countries for approved
proposed investment.[18]
2.20
During the 2012‒13
reporting period, the FIRB reported an increase in its total expenses, from a
total of $176,745 in 2011–12
to a total of $257,501 in 2012‒13.
Similarly, the total expenses of the Division also increased, from $3.9 million
in 2011‒13 to
$4.0 million in 2012‒13.
The majority of the these expenses were attributed to remuneration of Board
members or Divisional employee salary, with the remainder comprising travel,
car hire and incidentals for Board members and administrative costs for the
Division. For the 2012‒13
period the Division employed an average of 34 staff.[19]
Senator Sean Edwards
Chair
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