Chapter 1Introduction
1.1On 4 July 2024, the Senate referred the provisions of the Future Made in Australia Bill 2024 (the FMIA bill) and the Future Made in Australia (Omnibus Amendments No. 1) Bill 2024 (the Omnibus bill) to the Senate Economics Legislation Committee (the committee) for inquiry and report by 5September2024. On 19 August 2024, the Senate agreed to an extension of time to report to 6September 2024.
1.2The first chapter of this report outlines the purpose and provisions of the bills. Chapter two examines the objectives and policy design of FMIA more broadly while chapter three looks at specific parts of the FMIA bill and provides the committee view and recommendation.
Purpose of the bills
1.3The FMIA bill and the Omnibus bill provide a legislative framework for parts of the government’s Future Made in Australia policy. This policy was first announced by the government as part of the 2024-25 Budget.
1.4The Future Made in Australia policy would provide for an investment of $22.7 billion over the next ten years to ‘help Australia become an indispensable part of the global economy as the world transforms to net zero emissions and undergoes the most significant changes since the industrial revolution’.
1.5The FMIA bill gives effect to the Future Made in Australia policy by creating a National Interest Framework, which will support government decision making for public investment and encourage private sector investment in industries for the national interest.
1.6The Omnibus bill also supports the Future Made in Australia policy by making changes to the Export Finance and Insurance Act 1991 (EFIC Act) to allow Export Finance Australia (EFA) to make domestic investments in the national interest that are aligned with the National Interest Framework contained in the FMIA bill. It also amends the Australian Renewable Energy Agency Act 2011 (ARENA Act) to allow the Australian Renewable Energy Agency (ARENA) to support the development and deployment of renewable energy technologies that will assist in Australia’s transition to net zero.
Background
1.7As mentioned above, the FMIA bill and the Omnibus bill form part of the government’s Future Made in Australia policy. A factsheet on the policy explains:
This plan is about maximising the economic and industrial benefits of the move to net zero and securing Australia’s place in a changing global economic and strategic landscape.
The global environment is changing rapidly. Supply chains are under pressure, with increasing fragmentation and intensifying global competition. New opportunities in clean energy industries are also emerging that will shape the future of the global economy over the next decade and beyond.
Given our critical and abundant natural endowments and skilled workforce, Australia is well positioned to strengthen priority supply chains and become an indispensable part of the net zero global economy.
1.8The Future Made in Australia policy includes the following broad aims:
attracting investment in key industries through the National Investment Framework (discussed further below), streamlining approval processes for investment, and encouraging private sector investment in sustainable industries;
making Australia a ‘renewable energy superpower’ through the transition to net zero by establishing the Future Made in Australia Innovation Fund (discussed further below) to invest in net zero industries and increasing the demand for Australia’s green exports;
strengthening resources and economic security by investing in resources and critical minerals supply chains, as well as investing in manufacturing of clean energy technology; and
investing in new technologies and capabilities, reforming tertiary education and providing a training and skills pipeline for Future Made in Australia priority industries, strengthening defence capability and increasing drought and disaster resilience, among other things.
Provisions of the bills
The FMIA bill
1.9The FMIA bill contains four parts:
Part 1 contains the objects of the FMIA bill as well as relevant definitions;
Part 2 sets out the National Interest Framework (NIF) and sector assessments (both of these are detailed further below);
Part 3 details the provision of Future Made in Australia support and the Community Benefit Principles (CBPs) which a decision-maker must have regard to when making a decision to provide Future Made in Australia support; and
Part 4 contains miscellaneous sections, including the ability for the Secretary to delegate sector assessment decisions to a Senior Executive Service employee, annual reporting requirements, and the Minister’s ability to make rules by legislative instrument.
Part 1
1.10Part 1 of the FMIA bill includes the objects of the bill, which are:
(a)To establish the NIF;
(b)To enable the NIF to be used for sector assessments which will determine which sectors of the economy are ones where Australia could have a competitive advantage in a net zero economy but require government investment, or where some degree of domestic capacity is required for economic resilience and security; and
(c)To ensure that the funds provided under the Future Made in Australia policy considers community benefits, such as:
(i)Promoting safe, secure and well paid work;
(ii)Developing skilled and inclusive workforces;
(iii)Working with communities to achieve positive outcomes, in particular First Nations communities and those affected by the transition to net zero;
(iv)Strengthening domestic industrial capabilities, including local supply chains; and
(v)Demonstrating compliance and transparency to tax law.
1.11Part 1 also includes several relevant definitions, as well as a simplified outline of the FMIA bill to assist readers in understanding the substantive provisions of the bill.
Part 2
1.12Part 2 of the FMIA bill establishes the NIF and the sector assessment process.
The National Interest Framework
1.13Section 7 in Part 2 of the FMIA bill establishes the NIF, which ‘will support the Australian Government’s consideration and decision making in relation to significant public investment at scale in the public interest’. The framework will have two streams:
the net zero transformation stream; and
the economic resilience and security stream.
1.14As the explanatory memorandum sets out:
The net zero transformation stream will identify sectors which could have a sustained comparative advantage in a net zero economy and where public investment is likely to be needed for the sector to make a significant contribution to emissions reduction at an efficient cost.
1.15References to ‘significant contribution to emissions reduction’ in the framework include both domestic and global emissions reduction. The references to greenhouse gas emission reduction targets are defined consistently across Australian legislation and includes the targets set out in the Climate Change Act 2022.
1.16A sector can be considered for investment under the net zero transformation stream if it:
is energy intensive and is able to substantially reduce Australia’s or another country’s greenhouse emissions by making use of Australia’s renewable energy resources;
has ‘output that embodies low emissions’ or can contribute to emissions reductions in other parts of the economy;
can leverage Australia’s workforce;
is able to achieve economies of scale; or
aligns with either the current or future needs of one of Australia’s international trading partners.
1.17The economic resilience and security stream relates to sectors where Australia requires a degree of domestic capacity and resilience for domestic economic or security reasons, and there is an absence of private sector investment without government support.
1.18A sector will be considered for investment under the economic resilience and security stream if it:
forms part of a supply chain which is vulnerable to disruption, requires diversification, or is highly concentrated; or
is a sector which is required for the maintenance or development of another sector which is necessary for Australia’s security or resilience.
1.19A decision to invest in a sector under the economic resilience and security stream will also give consideration as to whether the Australian economy could prevent or adapt to disruptions in the supply of goods provided by this sector.
Sector Assessments
1.20Part 2 of the FMIA bill gives the Minister, after consultation with other Ministers, power to direct the Secretary of a relevant Department to conduct a sector assessment against the NIF to determine if it is suitable for investment under the FMIA policy. This direction is given through a notifiable instrument.
1.21The term ‘sector’ as used in the FMIA bill has not been defined and it is intended that the ordinary meaning of the word will be applied. This is to provide the relevant Minister with flexibility to identify sectors either broadly or narrowly, depending on need. The Minister can define the scope of the sector to be assessed in the notifiable instrument to the Secretary. This instrument may also include general instructions to the Secretary for the sector assessment, such as undertaking a public consultation process, and any further considerations which should be taken into account.
1.22Sector assessments are intended to be robust processes which draw on a variety of information and views. The FMIA bill states clearly that the Minister must not seek to influence or give directions to a Secretary about a particular outcome of a sector assessment.
1.23The FMIA bill sets out the matters to be considered by the Secretary when performing a sector assessment:
whether Australia could be competitive in the sector;
whether the sector could contribute to the transition to net zero, including through the use of renewable energy;
whether the sector could generate employment in the regions and build Australian capability;
whether supporting the sector could improve Australia’s security and resilience; and
whether supporting the sector could deliver value for money and ‘recognise the key role of the private sector’.
1.24When conducting a sector assessment, the Secretary may take into account whichever of the above factors they consider relevant. The Secretary is not required to consider all the above factors when conducting an assessment.
1.25To ensure that there is certainty around how sector assessments will be conducted, the legislative instrument to conduct a sector assessment will not be a disallowable instrument. The instrument can be amended or repealed and is intended to remain in place until revoked by the Minister. The Minister may also direct a Secretary to review a sector assessment as policy and market conditions change over time.
1.26The EM is clear that sector assessments are not intended to replace other policy frameworks or inform all government decisions:
…the National Reconstruction Fund has been tasked to invest in several priority areas to support, diversify and transform Australia’s industry and economy. While decisions made by the National Reconstruction Fund may align with priority areas identified through the National Interest Framework, this is not a requirement under the Fund’s investment mandate.
1.27After the completion of a sector assessment, the Secretary will provide the Minister with a report of the assessment which must be tabled in the Parliament within 30 days of being received. The Minister has the power to make redactions in such a sector assessment report in the case of information being personal, confidential or commercially sensitive, or likely to cause damage to security, defence or the relationship of the Commonwealth with the states or territories or an international state.
Part 3
1.28Part 3 of the FMIA bill details the provision of support provided under the FMIA policy. This includes the CBPs which are contained in section 10 of the bill.
1.29Decision makers must have regard to the CBPs when deciding whether to provide ‘Future Made in Australia (FMIA) support’. FMIA support is defined in the FMIA bill as:
support provided from the FMIA Innovation Fund (administered by ARENA, discussed further below);
support provided from EFIC under section 23B of the EFIC Act or under its net zero function or its national economy function (changes made to the EFIC Act by the Omnibus bill are discussed further below); or
support identified as FMIA support under another law of the Commonwealth.
1.30This support can be from any Commonwealth entity or Commonwealth company and can be in the form of a grant, loan, indemnity, guarantee, warranty, investment of money, or any other form of support.
1.31In brief, the CBPs that a decision maker should have regard to are:
promoting safe and secure jobs;
developing more skilled and inclusive workforces;
engaging with local communities, including First Nations communities and communities affected by the net zero transition;
strengthening domestic industrial capabilities; and
demonstrating transparency and compliance in relation to the management of tax affairs.
1.32Each of these principles are discussed in more detail below.
Promoting safe and secure jobs that are well paid and have good conditions.
1.33This principle is to ensure that government investment supports the creation of employment consistent with the Fair Work Act 2009 and the modern award objective of improving access to secure work. According to the EM, the employment promoted by this principle would be characterised by more stable employment (such as employment on a permanent basis and engaged directly by the entity) as well as generally meeting the prevailing industry or sector standard pay and conditions and being compliant with health and safety laws.
1.34From the EM:
The effect of this principle is to ensure that when assessing applications for Future Made in Australia support, decision makers consider the type and nature of employment opportunities that might be generated by the application should the support be provided.
Develop more skilled and inclusive workforces, including by investing in training and skills development and broadening opportunities for workforce participation
1.35A decision maker should have regard to the potential for FMIA support to encourage the development of skilled and inclusive workforces. This would include investment in skills and training, such as an applicant’s engagement in training partnerships with TAFE, as well as initiatives that improve employment outcomes for First Nations people, youth, women, or people otherwise experiencing barriers to employment in the local area.
Engage collaboratively with and achieve positive outcomes for local communities, such as First Nations communities and communities directly affected by the transition to net zero.
1.36This principle is intended to prioritise ‘early and collaborative’ engagement with the abovementioned local communities, in order to achieve outcomes aligned with those communities’ priorities. This is to ensure that support provided under the FMIA policy contributes to a transition to net zero that is fair and just.
1.37The decision maker having regard to this principle may consider how the applicant intends to engage with the local community and how they will ensure that these views are taken into account when deciding on the action they will take.
Strengthen domestic industrial capabilities including through stronger local supply chains
1.38This principle is intended to ensure that, where possible, a recipient of FMIA support should provide opportunities for local and Australian businesses to participate in the project and its supply chains for the life of the project. The decision maker should consider whether Australian industry has been given an opportunity to participate in or benefit from a project, and may also consider whether the project will contribute to Australian innovation and knowledge sharing.
Demonstrate transparency and compliance in relation to the management of tax affairs, including benefits received under Future Made in Australia supports.
1.39A decision maker should have regard to an applicant entity’s history of tax compliance, including compliance with the policy intent of tax law. The ability of an applicant to show compliance with Commonwealth tax law ‘ensures entities are acting in the national interest and ensures that the provision of Future Made in Australia support continues to uphold the integrity of the federal tax system’.
Future Made in Australia rules and plans
1.40The bill also contains provisions which allow the Minister to make rules in relation to FMIA plans. These rules can detail when a FMIA plan is required, what content such a plan must include, when the plan must be submitted to the Minister and when it will commence or cease to be in effect. It is not intended that all parties or entities that apply for FMIA support would be required to prepare and submit a FMIA plan.
1.41When required by the rules, an entity applying for FMIA support must have a FMIA plan which will explain how the support will provide the community benefits consistent with the community benefit principles listed above.
Part 4
1.42This part of the bill contains miscellaneous sections. These include the requirement to prepare an annual report on the operation of the bill, the power of the Secretary to delegate their powers and functions under the bill to a member of the Senior Executive Service of their department, and the power of the Minister to make rules.
The Omnibus bill
1.43The Omnibus bill is made of up two schedules:
Schedule 1 amends the EFIC Act to allow the EFA to make domestic investments in alignment with the FMIA policy’s NIF; and
Schedule 2 amends the ARENA Act to both update and modernise the Act itself, as well as administer the FMIA Innovation Fund (the Innovation Fund).
Schedule 1- amendments to EFA
1.44As mentioned above, Schedule 1 of the Omnibus bill amends the EFIC Act to allow the EFA to make investments aligning with the FMIA policy where support had not been previously available.
1.45Various definitions are added to the bill to bring the EFIC Act into line with the NIF’s two streams (discussed above), introducing the ‘EFIC’s net zero function’ and ‘EFIC’s national economy function.’ The ‘Responsible Minister’ definition is also amended to include the Finance Minister as the minister administering the EFIC Act.
1.46Section 7 of the EFIC Act is amended to include the NIF streams to allow the EFA to support these investment priorities. Item 12 of the bill is inserted into the EFIC Act to allow the EFA to use its existing financing tools (providing or guaranteeing finance, entering into contracts for insurance and indemnity) for these NIF streams, subject to the EFA referring the service or product to the responsible Ministers if required.
1.47This schedule of the Omnibus bill also allows EFA to disregard two of its primary duties for the purposes of performing its new national economy and net zero functions. These duties are that it performs its functions so as to best assist Australia’s export trade, and to have regard to the desirability of extending the range of financial services and products available to persons who are involved in Australian export trade.
1.48The amendments in the Omnibus bill make changes so that the ‘responsible Ministers’ includes the Finance Minister as joint minister with the Minister responsible for administering the EFIC Act. This is in line with the government’s approach to improving oversight and transparency in its specialist investment vehicle portfolio. Mirror amendments to the Public Governance, Performance and Accountability Act 2013 are also included in Schedule 1 to give effect to this change.
1.49The Omnibus bill also makes various technical amendments to modernise the EFIC Act, such as replacing ‘his or her’ with ‘the’ and ensuring that the roles of Chair and Managing Director are not automatically filled with acting roles when these people are not in Australia.
Schedule 2 – Amendments to ARENA
1.50ARENA is an independent statutory authority that aims to facilitate Australia’s greenhouse gas emission reduction goals and improve competition and supply of renewable energies in Australia. It does this by providing funding to researchers and developers in the renewable energy sector as well as sharing knowledge about renewable energy technologies.
1.51Schedule 2 of the Omnibus bill makes wide-ranging changes to the ARENA Act in order to modernise it and to allow it to give effect to the FMIA policy.
Objects and functions of the ARENA Act
1.52The objects of the ARENA Act are amended to include that the ARENA Act contribute to the reduction of global greenhouse gas emissions in accordance with the Paris Agreement, ‘including through increasing the supply and competitiveness of renewable energy technologies.’
1.53ARENA’s functions (contained in section 8 of the ARENA Act) are also amended by the bill to include the manufacture of renewable energy. This is mirrored by amendments to section 14 of the ARENA Act (Constitutional limits) to add manufacturing as one of the constitutional bases ARENA may perform its functions under.
1.54According to the EM:
These amendments are intended to support Australia to become a renewable energy superpower and ease supply-chain issues, through enhancing the competitiveness of Australian-made renewable energy technologies and products made with renewable energy.
Definitions
1.55The Omnibus bill repeals the definition of ‘Chief Finance Officer’ and inserts a new definition of ‘Deputy Chair’. This forms part of changes to ARENA’s governance which is discussed further below.
1.56The Omnibus bill also amends the ARENA Act by moving two definitions from the ARENA Regulation into the Act: ‘electrification technologies’ and ‘energy efficiency technologies’. These terms are also added to several sections within the ARENA Act so that ARENA’s functions and powers in relation to these technologies remain the same.
1.57The EM states that the movement of these definitions into the ARENA Act from the ARENA Regulation is not intended to change the definitions in question, as they are transposed directly from the Regulation in question. Rather, this change has been made to reflect the important role of electrification and energy efficiency technologies in the transition to net zero, as well as address concerns expressed by the Senate Standing Committee on the Scrutiny of Delegated Legislation about the number of regulations made under the ARENA Act.
Governance Arrangements
1.58Under the Omnibus bill, several changes are made to ARENA’s governance. These include:
ARENA will now be able to employ staff under its own terms, rather than being assisted by staff employed under the Public Service Act 1999 or consultants. Other provisions are also amended to allow ARENA to pay salaries and allowances of any staff it employs;
The membership of the ARENA Board will be increased from six to seven, with the period of appointment being increased from two years to three (allowing a maximum number of years on the Board to be nine years);
ARENA will be able to employ consultants to assist in the expansion of its functions and capabilities, such as those with expertise in media, communications and administration. Previously ARENA was only able to employ consultants to provide specialist and technical advice; and
The requirement that ARENA prepare a workplan is repealed.
1.59The Omnibus bill also allows the Minister, with the agreement of the Finance Minister, to appoint one member of the ARENA Board as Deputy Chair. In cases where the Chair of ARENA is unable to perform their functions, the Minister may appoint an acting Chair, and if no such appointment is made the Deputy Chair is to act as Chair. The Minister also has the power to appoint an acting Deputy Chair.
1.60The Omnibus bill also introduces a power of sub-delegation for the Chief Executive Officer who may, in writing, delegate a power to a senior member of staff. The ARENA Board will have oversight of any of these sub-delegations. The EM states that it is expected that these sub-delegations will generally be made to senior staff in ARENA, equivalent to at least an Australian Public Service Executive Level 2 officer, and that this will be administratively necessary as ARENA’s workload is expanded to meet its role in actioning the Future Made in Australia policy.
Joint Ministerial responsibility
1.61Several sections of the ARENA Act are amended by the Omnibus bill to increase the role of the Finance Minister in relation to governance and strategic matters of ARENA. This has been done to create a consistent approach to oversight for specialist investment vehicles across government.
1.62The amendments include:
requiring the Board of ARENA to have regard to the ARENA Statement of Expectations, which will be jointly issued by Minister and Finance Minister, when developing its general funding strategy;
requiring the Minister to consult with the Finance Minister prior to the approval or variation of the general funding strategy, appointing or terminating the CEO of ARENA, or determining the terms and conditions of ARENA Board appointments;
requiring that the Minister act with the agreement of the Finance Minister in making appointments or terminating the appointments of the ARENA Board, Chair and Deputy Chair, as well as requiring the Minister to notify the Finance Minister of any acting appointments to these roles and any absences of the Chair and Deputy Chair; and
requiring that any interests of the ARENA Board members and the CEO be disclosed to both the Minister and the Finance Minister and that Board member resignations be provided to both the Minister and the Finance Minister.
1.63The Omnibus bill also allows for the Minister to delegate certain powers for specified projects or programs to other Ministers. These powers delegated to other Minsters must be exercised in accordance with the ARENA Act and only in relation to the project or program that has been specified in the instrument of delegation. This power has been included in the Omnibus bill to reflect ARENA’s expanded role under the Future Made in Australia policy.
Funding arrangements
1.64The Omnibus bill introduces a requirement for ARENA to have regard to the most recent statement of expectations jointly issued by the Minister and the Finance Minister when developing its general funding strategy. The EM gives more detail in relation this requirement:
The statement of expectations is intended to give greater weight to the Government’s priorities and objectives for ARENA and shape how ARENA strategically deploys its funding due to its growing importance in supporting the transition to a net zero economy. This does not diminish ARENA’s independence and role in developing the General Funding Strategy under the ARENA Act.
1.65The Omnibus bill also provides an updated table, in proposed section 64 of the ARENA Act, of funding amounts for ARENA for future financial years from 2025-26 to 2038-39. The money specified in this table does not limit the amount of money ARENA can receive in a financial year and can be increased by regulation.
1.66Any future extra funding amount prescribed by regulation would be subject to normal Federal Budget processes and would be subject to disallowance. The EM states that the intention of allowing these kinds of regulations would be for exceptional circumstances, such as where an increase in funding would be required in order for Australia to meet its greenhouse gas emission reduction targets and ARENA’s existing funding arrangements would not be adequate for this purpose.
Consequential amendments
1.67As mentioned previously in this chapter, the definitions of electrification technologies and energy efficiency technologies have been moved into the ARENA Act by the Omnibus bill. Consequential amendments are made to the ARENA Regulation to remove these definitions to avoid duplication.
Consultation
1.68As the FMIA bill and the Omnibus bill are wide ranging and cover many policy areas there have been a variety of consultations on these bills, both ongoing and completed.
1.69Treasury completed a support paper in May 2024 relating to the FMIA policy and outlining the NIF and the CBPs.
1.70The Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) is currently undertaking a consultation on opportunities to support a low carbon liquid fuel in Australia as part of the FMIA policy. Submissions to this consultation closed on 18 July 2024.
1.71In addition, the Department of Industry, Science and Resources (DISR) is undertaking consultation on the production of low emission iron, steel, alumina and aluminium and the decarbonisation of the sector. A consultation paper was provided in May 2024 and submissions closed in July 2024.
Commencement
1.72Both the FMIA bill and the Omnibus bill would commence the day after receiving Royal Assent.
Financial impact
The FMIA bill
1.73The FMIA bill has been assessed to have nil financial impact.
The Omnibus bill
1.74Schedule 1 of the Omnibus bill is estimated to have a financial impact of $11.4 million for the period of 2024-25 to 2028-29 (see table below) and an ongoing financial impact of $3.1 million a year from 2028-29 ongoing.
Table 1.1Omnibus bill schedule 1 financial impact
Source: EM, p. 2. Note: All figures in this table represent $millions.
1.75Schedule 2 of the omnibus bill reintroduces statutory funding for ARENA (totalling $6.19 billion for the period of 2025-26 through 2038-39). This funding has already been allocated to ARENA through the Federal Budget process and as such the bill does not provide any new funding for ARENA.
Legislative scrutiny
1.76In Scrutiny Digest 9 of 2024, the Senate Standing Committee on the Scrutiny of Bills (Scrutiny Committee) raised concerns about the power in the Omnibus bill of the CEO of ARENA to subdelegate their powers to senior staff members.
1.77As at the time of writing, the Scrutiny Committee has not made any comment on the FMIA bill.
Broad delegation of administrative powers
1.78As mentioned above, the Omnibus bill amends the ARENA Act to allow the CEO to subdelegate their powers or functions to ‘a senior member of staff referred to in section 61’. Proposed section 61 of the ARENA Act does not define ‘senior members of staff’.
1.79The EM does provide some guidance on these amendments:
It is expected that, for the purposes of this provision, ‘senior staff’ in ARENA would generally hold managerial positions equivalent to at least an Executive Level 2 officer or higher in the Australian Public Service. It is administratively necessary to allow the CEO to subdelegate their powers or functions to senior staff of ARENA, particularly given the expansion of ARENA’s workload and workforce in its delivery of the FMA agenda. This would ensure that day-to-day operations are not unduly delayed or interrupted where decisions or approvals that are required cannot be made by senior staff holding appropriate subdelegations.
1.80The Scrutiny Committee has previously raised concerns about subdelegation powers that allow for delegation to a relatively large group of people ‘with little or no specificity as to their qualifications or attributes’. It prefers to see limits set in relation to subdelegations on either the scope of the powers being delegated or on the categories of people who could be delegated to. The Scrutiny Committee also expressed a preference for delegations to be limited to members of the Australian Public Service Senior Executive Serve (SES) or nominated office holders. Where these delegates are included in a bill, the Scrutiny Committee considers that an explanation should be included in the EM.
1.81As noted above, the EM does include an explanation of the reasons for such broad subdelegation powers on behalf of the CEO of ARENA. The Scrutiny Committee raised the following concerns with this explanation:
While the EM states that the intention of the bill is that ‘senior members of staff’ would mean Executive Level 2 (EL2) or equivalent management positions, this is not captured in the bill and, as the current ARENA Act already allows for subdelegation to SES or EL2 level staff, this seems to indicate that there is an intention to subdelegate to levels lower than EL2.
There is no requirement in the bill for powers and functions to be subdelegated to members of staff with appropriate skills, experience or qualifications to perform those subdelegated functions.
1.82Because of this, the Scrutiny Committee requested the minister’s advice as to:
why it is necessary and appropriate for any of the CEO’s powers to be subdelegated to any ‘senior member of staff’ under proposed subsection 73(1) of the bill;
whether proposed section 61 of the bill can be amended to include a definition of ‘senior member of staff’; and
whether proposed subsection 73(1) of the bill can be amended to provide that the CEO’s powers or functions can only be subdelegated where the CEO is satisfied that the subdelegate possesses the appropriate skills, qualifications or experience to exercise the powers or perform the functions.
Human rights implications
1.83As at the time of writing, the Parliamentary Joint Committee on Human Rights has not commented on the bills.
1.84The EM includes a discussion of the human rights implications of the bills.
The FMIA Bill
1.85The EM states that the FMIA bill engages positively with the following human rights contained in the International Covenant on Economic, Social and Cultural Rights (ICESCR):
The right to work; and
The right to the highest attainable standard of physical and mental health.
1.86The right to work (contained in articles 6(1), 7 and 8(1)(a) of the ICESCR) states that a person has a right to freely choose their work and to not be unfairly deprived of work. According to the EM, the FMIA bill positively engages with this right through the requirement that the community benefit principles be considered when making decisions about providing Future Made in Australia support. The community benefit principles include promoting safe and secure employment and developing skilled and inclusive workforces.
1.87By promoting safe and secure employment, this part of the bill addresses the right to freely choose work. The community benefit principles of developing skilled and inclusive workforces and engaging collaboratively with local communities (including First Nations communities and communities affected by the transition to net zero) also addresses the right to not be unfairly deprived of work by encouraging workforce participation.
1.88Article 12 of the ICESPR recognises the right of all people to ‘the enjoyment of the highest attainable standard of physical and mental health.’ Article 12(2) specifies the steps for states to take to fully achieve this right as including ‘the improvement of all aspects of environmental and industrial hygiene.’
1.89The bill positively impacts this right by:
…encouraging and expanding private investment in sectors of the Australian economy that will make a significant contribution to emissions reduction, and by considering for support sectors which could contribute to an orderly path to net zero transformation.
The Omnibus bill – Schedule 1
1.90Schedule 1 of the Omnibus bill engages with the right to an adequate standard of living contained in article 11 of the ICESPR. According to the EM, this right is positively engaged by schedule 1 as it will enhance EFA’s ability to increase competition, and by extension supply, of renewable energy in Australia.
1.91As such, according to the EM, this schedule is compatible with human rights.
The Omnibus bill – Schedule 2
1.92Similarly, schedule 2 engages with article 11 of the ICESPR. As this schedule allows ARENA to improve competition and supply of renewable energy in Australia, it will help Australia meet its greenhouse gas emission reduction targets and will improve living standards in Australia.
1.93As with schedule 1, according to the EM, this schedule is compatible with human rights.
Regulatory impact
1.94The EM offered no discussion about a Regulatory Impact Statement for either the FMIA bill or the Omnibus bill.
Conduct of the inquiry
1.95The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting written submissions by 26July 2024.
1.96The committee received 57 submissions as well as answers to questions on notice, which are listed at Appendix 1.
1.97The committee held two public hearings for the inquiry in Canberra on 28 and 29August2024. The names of witnesses who appeared at the hearing can be found at Appendix 2.
Acknowledgements
1.98The committee thanks all individuals and organisations who assisted with the inquiry, especially those who made written submissions and participated in the public hearing.
Notes on references
1.99In this report, references to the Committee Hansard are to the Proof Hansard and page numbers may vary between Proof and Official Hansard transcripts.
Report structure
1.100Stakeholder views on the bill have been divided into two chapters. The first of these (chapter 2) examines the objectives and policy design of FMIA more broadly.
1.101Chapter 3 of the report looks at specific parts of the FMIA bill, being the National Interest Framework, Sector Assessments and the Community Benefit Principles. This chapter will also contain the committee view for the FMIA bills.