Green Car Innovation Fund Directions No. 1 of 2009

The GCIF is defined as a competitive, merit based grants program designed to enhance research and development and the commercialisation of Australian technologies that significantly reduce fuel consumption or greenhouse gas emissions of passenger motor vehicles (clause 4 definition of Green Car Innovation Fund). “Passenger motor vehicle” is defined by reference to the Australian Design Rule 2005, covering passenger vehicles and variants with a gross vehicle mass up to 3.5 tonnes (clause 4 definition). This excludes heavy commercial vehicles, buses, and other heavy vehicles. Eligible activities must be carried out in Australia and consist of research and development, proof of concept, early stage commercialisation, or pre production development activities, all aimed at achieving the program’s policy objectives (clause 4 definition of eligible activities). A “project” is defined as one that directly relates to the creation, acquisition, application or commercialisation of knowledge, technology, process materials or products which are new or additional to the grantee and significantly reduce fuel consumption or emissions (clause 4 definition of project). The concept of “new or additional to the grantee” means that routine, existing business activities cannot qualify. The directions also define “eligible application” as one that the Program Delegate has determined eligible for technical assessment (clause 4 definition). That determination is made under the GCIF Guidelines, so eligibility is a gate kept by the Department, not by the Board. The five merit criteria are central: Criterion 1 concerns the extent of reduction in fuel consumption or emissions; Criterion 2 covers technical merit and the degree of innovation (new to the firm, new to the Australian automotive industry, new to Australia, or new to the world); Criterion 3 addresses the applicant’s capacity and capability, including management expertise and the need for funding (including justification for a government contribution different from the default one to three ratio); Criterion 4 covers commercialisation potential and a route to market benefiting Australia; and Criterion 5 looks at the project’s contribution to a sustainable and internationally competitive Australian automotive industry and broader economic benefits, including spill over effects such as diffusion of knowledge and collaboration (clause 8). The Board must assess each eligible application on its merit according to the extent it meets these criteria (clause 7). The directions use a permissive “may” for the Board’s advisory functions (clause 4 final sentence). The definition of “agreed project activities” and “agreement” ties the grant to a specific contract between the Commonwealth and the recipient, which may be varied. The Program Delegate is an employee of the Department with delegated authority to carry out functions under the program.

The directions directly bind Innovation Australia (the Board) in its performance of assessment and advisory functions. The Board’s staff and members must follow the procedures and criteria set out in the directions when reviewing eligible applications, variations, and other technical matters. The Program Delegate, an employee of the Department, is the decision maker who determines eligibility initially and receives the Board’s merit rankings and assessments. The Program Delegate may also request the Board to assess variations or technical matters (clauses 9 and 12). The Minister for Innovation, Industry, Science and Research is affected as the maker of the directions and the recipient of advice from the Board (clause 15). Applicants are directly affected: they must submit applications that meet the eligibility criteria and then undergo assessment against the five merit criteria. If the Board declines to provide a merit ranking because it is not satisfied with the level of merit, that decision effectively ends the application’s chance of funding (clause 6). Recipients of grant funding are affected, especially if they seek to vary their project. The Board’s assessment of a variation proposal can influence whether the Department approves it. Recipients also face technical compliance assessments under clause 12(b), where the Board may review progress against milestones or technical conditions. The broader Australian automotive industry and supply chain are indirectly affected because the program aims to support technologies that reduce fuel consumption and emissions, and Criterion 5 explicitly requires consideration of the project’s contribution to a sustainable and internationally competitive industry. Research institutions and commercialisation partners may be involved as consortium members. The geographic limitation that eligible activities must be carried out in Australia affects where R&D can be performed and which entities can apply. The definition of passenger motor vehicle up to 3.5 tonnes GVM means that manufacturers of heavier vehicles or components not fitting that definition are excluded from the program. The direction also affects the Department’s administration, as it must coordinate with the Board on timing of assessments (the Board must consider eligible applications as soon as practicable after receiving them, clause 5(b)). Finally, taxpayers and the general economy are affected because the program uses public funds to subsidise private R&D and commercialisation; the directions do not set a total budget but the grant funding ratio (generally one dollar government to three dollars applicant) implies a leveraging of private investment.

The Board has a duty to assess eligible applications and provide a merit ranking to the Program Delegate, subject to the right to decline if not satisfied with merit or eligibility (clauses 5 and 6). The Board must consider eligible applications as soon as practicable after they are provided (clause 5(b)). It must assess each eligible application on its merit according to the extent it meets the five criteria (clause 7). This duty is not discretionary: once an application is referred by the Program Delegate as eligible, the Board must assess it unless it exercises the power to decline under clause 6. If the Board receives a request to assess a variation proposal, it must do so as soon as practicable and provide the assessment to the Program Delegate (clause 10). In that assessment, the Board must determine the extent to which the changed project meets the merit criteria and whether the change would significantly improve outcomes, be consistent with policy objectives, or otherwise be appropriate (clause 11). If the Board receives a request for a technical assessment under clause 12, it must conduct the assessment within a reasonable time and provide the assessment to the Program Delegate (clause 14). The Board may advise the Minister on non financial administration matters and may collect and analyse data on program performance (clauses 15 and 16). These are permissive, not mandatory. The Program Delegate has the right to request the Board’s assessments under clauses 9 and 12, and to receive variations in project proposals. The programme delegate also holds the power to determine eligibility of applications under the GCIF Guidelines, a power not shared with the Board. Applicants have a right to have their eligible applications assessed and merit ranked, but that right is qualified: the Board may still decline under clause 6. There is no right to receive a grant, only to have the application considered through the prescribed process. Recipients have a right to have their variation proposals assessed by the Board if the Program Delegate requests it, but they have no direct right to compel the Board to assess; the request comes from the Program Delegate. Recipients also have obligations under their grant agreements, and the Board may be asked to assess technical compliance with those conditions (clause 12(b)). The directions do not grant any right of review or appeal; any such rights would be found in the Industry Research and Development Act or administrative law generally.

The directions themselves do not create penalties. Compliance is enforced through the grant agreement between the Commonwealth and the recipient. The Board may be asked to assess technical compliance with agreement conditions (clause 12(b)), which could form the basis for the Department to take action such as withholding payments, requiring repayment, or terminating the agreement. The Industry Research and Development Act 1986 contains offence and civil penalty provisions for providing false or misleading information, but those are not detailed in these directions. If the Board fails to perform its duties under the directions, that failure could be subject to judicial review under the Administrative Decisions (Judicial Review) Act 1977 or the common law, though the directions themselves do not specify a remedy. The Board’s decision to decline to provide a merit ranking under clause 6 is a decision that could be challenged if it were made in bad faith or without proper consideration. However, the directions give the Board a broad discretion: it may decline if it is “not satisfied” with the level of merit or eligibility. As long as the Board has properly considered the application and reached a reasonable view, it is unlikely to be overturned. The directions also provide that the Board must assess applications as soon as practicable (clause 5(b)) and within a reasonable time for technical assessments (clause 14). Failure to meet these timelines could give rise to an application for mandamus or an order for specific performance, though such remedies are rarely sought in practice. The requirement for the Board to provide an assessment to the Program Delegate is mandatory for variation proposals (clause 10) and technical assessments (clause 14), but the directions do not prescribe consequences if the Board refuses. The Department and the Minister could ultimately rely on other provisions of the Industry Research and Development Act or the general law of delegation to enforce compliance. For recipients, the more immediate enforcement mechanism is through the agreement: if the Board reports that technical milestones are not met, the Department may treat that as a breach. The directions thus create an indirect enforcement chain: the Board’s technical assessments inform the Department’s decisions, which then trigger contractual remedies.

These directions are made under the Industry Research and Development Act 1986, specifically subsections 18A, 19 and 20(1). They do not amend or override any other legislation. The GCIF Guidelines, which are made by the Minister for the Department, are incorporated by reference throughout the directions. The directions state that the Board must take into account any relevant policies relating to the administration of the program issued under the GCIF Guidelines when carrying out technical assessments (clause 13). Therefore, the directions and the Guidelines must be read together. The definition of “passenger motor vehicle” in the directions incorporates the Vehicle Standard (Australian Design Rule - Definitions and Vehicle Categories) 2005, a legislative instrument made under the Motor Vehicle Standards Act 1989. That cross reference means the scope of the program is shaped by that vehicle standard, which may be amended from time to time. The directions themselves are a legislative instrument subject to the Legislative Instruments Act 2003 (now the Legislation Act 2003) and were registered on the Federal Register of Legislative Instruments. As a direction to the Board, they have binding legal effect within the framework of the Industry Research and Development Act. The directions do not interact with state or territory laws, but the requirement that eligible activities be carried out in Australia means that state based regulations on R&D, environmental approvals, and workplace safety may apply to the actual project activities. The directions do not reference taxation law, but the grant funding received under the GCIF may have tax implications (e.g., assessability of grants, interaction with the R&D tax incentive). However, that interaction is not addressed in the directions and would be governed by general tax law and the terms of the agreement. The directions also do not reference competition or consumer law, but recipients engaging in collaborative arrangements must still comply with the Competition and Consumer Act 2010. The program’s objective of contributing to a sustainable automotive industry could intersect with industry policy measures such as the Automotive Transformation Scheme or other assistance programs, but those are not mentioned. The directions are specific to the GCIF and do not affect the Board’s other functions under the Industry Research and Development Act, such as assessing R&D tax incentive applications.

These directions are titled Green Car Innovation Fund Directions No 1 of 2009. They were made by Minister Kim Carr on 24 April 2009 and were to commence on the day after registration on the Federal Register of Legislative Instruments. The text before us does not contain any amendment history or amending instruments. There is no indication within the instrument that it has been amended. It is a standalone set of directions. Under the Legislation Act 2003, legislative instruments must be registered and may be amended or repealed by subsequent instruments. It is possible that later directions (No 2, No 3, etc.) were made, or that the GCIF program itself was replaced or abolished. However, the source provided does not include any such information. The directions were made under provisions of the Industry Research and Development Act 1986. That Act has been amended many times, but the specific subsections cited (18A, 19, and 20(1)) remain in the Act as at the time of this writing. The directions themselves have not been updated in the text provided. Any changes to the program’s scope, merit criteria, or procedures would require new directions or an amendment to these directions. The GCIF Guidelines, which are separate, may have been amended periodically, and the directions require the Board to consider policies under the Guidelines as in force from time to time (clause 4 definition). Because the directions are a legislative instrument, they are subject to disallowance by either house of the Commonwealth Parliament, though that does not appear to have occurred. The directions also fall within the sunsetting regime: they would have been automatically repealed after 10 years unless remade. Given that the GCIF program was a specific initiative associated with the 2009 New Car Plan for a Greener Future, its funding was time limited. The directions remain in force unless specifically repealed or replaced, but their practical significance depends on whether the GCIF is still active. The text does not indicate any sunset date or expiry.

The directions themselves do not refer to any litigation, and the source contains no case law references. It is possible that decisions made under the GCIF program have been challenged in the courts, for example, through judicial review of funding decisions or the Board’s assessment process. Such challenges could have arisen under the Administrative Decisions (Judicial Review) Act 1977 or the common law. However, without specific information from the source, it is not possible to cite any cases. The directions do not create a private right of action; any litigation would likely involve applicants or recipients arguing that the Board or the Program Delegate failed to follow the directions or acted beyond power. The broad language of the merit criteria and the Board’s discretion to decline to rank applications (clause 6) would make it difficult to succeed on a merits based challenge. A court would likely defer to the Board’s assessment of technical merit unless the decision was irrational or procedurally unfair. There is no history of litigation mentioned in the text, and it is reasonable to infer that the program operated without high profile court cases, though that is speculation. The directions are a legislative instrument, so they could be challenged as ultra vires the Industry Research and Development Act. The empowering provisions (s 18A, s 19, s 20(1)) give the Minister power to give directions about the Board’s functions, so such a challenge would be unlikely to succeed if the directions were within the scope of those sections. The directions also define terms and procedures; any inconsistency with the parent Act could be litigated. But again, no case law is referenced. In writing this section, we must stick strictly to the source, which is silent on litigation. Therefore, the most honest answer is that the directions do not mention any litigation, and no cases are cited in the text.

Several provisions contain traps for the unwary. First, the Board may decline to provide a merit ranking under clause 6 if it is not satisfied with the level of merit or the eligibility of the activities. Note that eligibility is already determined by the Program Delegate before the application reaches the Board (clause 4 definition of eligible application). Yet the Board can revisit eligibility under clause 6(b) and decide the activities are not eligible. This creates a duplication of eligibility assessment, and applicants cannot assume that passing the Program Delegate’s gate means the Board will accept eligibility of the activities. Second, the definition of “project” requires that the knowledge, technology, process materials or products be “new or additional to the grantee” (clause 4 definition). An established firm undertaking incremental R&D on existing technology may not qualify if it cannot show the project is new or additional to itself. The phrase “new or additional” is subjective; the Board can take a strict view. Third, Criterion 2(d) mentions “the degree of technical risk, or that the project is building on prior work that has an appropriate level of technical risk, and strategies or collaborative arrangements to manage those risks.” This is a double edged sword: an applicant who claims low risk by building on prior work might be seen as insufficiently innovative, while an applicant with high risk must show adequate risk management. The Board’s discretion is wide. Fourth, the default investment ratio is one dollar of government funding for every three dollars provided by the applicant (Criterion 3(e)). Applicants seeking a higher ratio must argue for it. If they fail to provide adequate justification, the Board may assess the application as less meritorious under Criterion 3. Fifth, the directions refer to “eligible activities” that must be carried out in Australia. If a project involves any offshore component, even minor, it could be deemed ineligible. The Board may look at the entire project description. Sixth, for Stream A applicants (which likely refers to vehicle manufacturers), commercialisation plans must include the development or engineering and sale or fitment of technologies to passenger motor vehicles, or introduction of new vehicle models (Criterion 4). This is a more specific requirement than for other applicants. Seventh, variation proposals under clause 11 require a demonstration that the change would “significantly improve the outcomes of the project” or be consistent with policy objectives. A minor change may be rejected. Eighth, the Board’s technical assessments under clause 12 include assessing progress reported by a recipient against technical milestones (clause 12(b)). Recipients must be accurate; any overstatement could be flagged. Ninth, the directions use “may” for the Board’s advice function (clause 15) and for the Program Delegate’s power to request assessments (clause 9). No one is compelled to request or give advice; the program could remain underassessed if the Program Delegate does not ask. Tenth, the directions do not set any time limit for the Board to provide a merit ranking other than “as soon as practicable” (clause 5(b)). Delays could affect applicants’ planning. Finally, the GCIF Guidelines are not set out in the directions; they may contain additional conditions, definitions, or processes that override or supplement these directions. Applicants and recipients must obtain and read the Guidelines.

For applicants, compliance begins with understanding the eligibility gate. Ensure that the proposed activities are eligible: R&D, proof of concept, early stage commercialisation, or pre production development, all carried out in Australia and aimed at reducing fuel consumption or emissions of passenger motor vehicles (up to 3.5 tonnes GVM). Check that the project involves knowledge, technology, or products that are new or additional to your firm. Prepare a detailed application addressing all five merit criteria. For Criterion 1, quantify the expected reduction in fuel consumption or emissions, using recognised test cycles or modelling. For Criterion 2, demonstrate technical capacity: describe infrastructure, equipment, staff qualifications, track record, and the degree of innovation (new to firm, industry, Australia, or world). Clearly articulate technical risks and risk mitigation strategies. For Criterion 3, provide evidence of management capability: project management, commercialisation, business management. If you are an established company, show stability or growth over the past two financial years. For the default investment ratio (1:3), justify any request for a higher government share. For Criterion 4, present a concrete commercialisation plan with a route to market, understanding of trade barriers, access to partners, and realistic market demand and competitive analysis. If you are a Stream A applicant (likely a vehicle manufacturer or tier one supplier), ensure your plan includes engineering, sale, or fitment of technologies to vehicles or introduction of new models. For Criterion 5, show how the project will contribute to a sustainable Australian automotive industry, improve supply chain skills, boost innovation and productivity, deliver social or environmental benefits, and generate spill overs (knowledge diffusion, collaboration). For recipients already under agreement, comply with all technical milestones and conditions. If you need to vary the project (add, discontinue, substitute activities, change funding or timeframe), submit a proposal to the Department. Ensure the proposal demonstrates that the changed project meets the merit criteria and that the change will significantly improve outcomes, is consistent with policy objectives, or is otherwise appropriate. The Board will assess the proposal; your evidence should be as strong as in the original application. For technical compliance, keep accurate records of progress against milestones and be prepared for the Board to review them. For the Board itself, comply by establishing a robust assessment process that applies the merit criteria consistently and documents reasons for any decision to decline a merit ranking under clause 6. The Board should maintain a pipeline of assessments to provide rankings as soon as practicable. When assessing variations, apply the same merit criteria and the three factors in clause 11(b). For technical assessments under clause 12, take into account relevant policies under the GCIF Guidelines and complete the assessment within a reasonable time. For the Program Delegate, ensure that applications are eligible before referring them to the Board, and request Board assessments for variations and technical matters when needed. The Program Delegate should also keep records of referrals and Board outputs. For the Department, ensure the GCIF Guidelines are consistent with these directions and made available to applicants.