Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Ralph Willis, MP)Development allowance
Overview
11.1 The Bill will amend the Development Allowance Authority Act 1992 to require the applicant's signature on applications for the various stages of the development allowance, including variations and transfers of certificates of registration and pre-qualification.
Summary of the amendments
11.2 Currently, the applicant's signature (where the applicant is a natural person), the chairperson's signature (where the applicant is a company with a board of directors), or for other applicants, a signature as specified in the form, is only required on applications for registration for the development allowance. The amendments will extend this requirement to applications for pre-qualifying certificates, and for transfers and variations of certificates of registration and pre-qualification for the development allowance. [Item 1 of Schedule 7]
11.3 The amendments apply only to applications, and any associated reports, made after the date the Bill receives Royal Assent. [Item 9 of Schedule 7]
Background to the legislation
11.4 An application for the development allowance may be made by individuals, firms, joint ventures and partnerships. There are two phases in obtaining the development allowance:
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- the granting of a registration certificate at an early stage of the project's implementation, when an applicant has met basic eligibility requirements; and
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- the granting of a pre-qualification certificate at an advanced stage of the project's implementation, when further requirements, including the competitiveness test, have been met. The competitiveness test requires companies to meet certain micro-economic reform objectives in terms of work practices and input prices.
11.5 The existing provisions only specify a signature requirement in the case of an application for a certificate of registration. This signature is necessary because it obtains a broad commitment to complete the project and hence seeks to avoid registering speculative projects. Such an application must be accompanied by a report. An application is to be signed by the natural person who is the applicant, the chairperson of the Board for a company or, for non company entities, as specified in the form. The expectation is that a person of equivalent authority to a chairperson of a company board would be specified for a non-company entity. In the case of an individual, that person would sign the form.
11.6 At present, applications and associated reports in the following cases need only be in an approved form and no signature requirements are mentioned:
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- a pre-qualifying certificate (section 37);
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- a variation in a registration certificate or a pre-qualifying certificate (section 43);
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- a transfer of the benefits of registration or the pre-qualifying certificate where a takeover has occurred (section 50);
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- a transfer of the benefits of registration or the pre-qualifying certificate where a reconstitution of a joint venture has occurred (section 60); and
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- a transfer of the benefits of registration or the pre-qualifying certificate where a reconstitution of a partnership has occurred (section 70).
As a result, uncertainty and inconsistency can arise if different officers of a company were involved in different parts of the application process, particularly where the authority of lower level officers is not clear in regard to the company's micro-economic reform commitments.
Explanation of the amendments
11.7 The amendments will provide a consistent approach throughout all stages of obtaining the development allowance. This will extend the signature requirements to an application for a pre qualifying certificate, and for a transfer and a variation of certificates of registration and pre-qualification for the development allowance. The applicant's signature at the pre-qualification stage would serve to clearly indicate a commitment to meet the requirements of the competitiveness test and confirm the earlier commitment to the project.
11.8 The amendments expand the existing signature requirement to include not only an application for a registration certificate but also the associated report. As the report is used to determine eligibility for the allowance, the applicant's signature should certify the accuracy of the report. To achieve this effect the existing section 28(3) is repealed and is replaced with a provision that specifies that applications for a registration certificate and the associated report must be signed by the applicant, the company chairperson, or for other entities, as specified in the form. [Items 2 and 3 of Schedule 7]
11.9 To place the issue of accountability and company commitments beyond doubt, it is proposed the applicant's signature (where the applicant is a natural person), the chairperson's signature (where the applicant is a company with a board of directors), or for other applicants, a signature as specified in the form, will also be required for applications and any associated reports in the following cases:
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- a pre-qualifying certificate [item 4 of Schedule 7];
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- a variation in a registration certificate or a pre-qualifying certificate [item 5 of Schedule 7];
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- a transfer of the benefits of registration or the pre-qualifying certificate where a takeover has occurred [item 6 of Schedule 7];
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- a transfer of the benefits of registration or the pre-qualifying certificate where a reconstitution of a joint venture has occurred [item 7 of Schedule 7]; and
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- a transfer of the benefits of registration or the pre-qualifying certificate where a reconstitution of a partnership has occurred [item 8 of Schedule 7].