R & D Start Program Directions No. 3 of 2002

The instrument defines a compact set of programmatic concepts that determine who may apply, what activities the Commonwealth will support, and on what terms.

R&D Start Program and its components. The Program is the umbrella merit‑based scheme. Start Grants encompass Core Start (projects by non tax‑exempt companies with combined turnover under $50 million for each relevant year), Start Plus (non tax‑exempt companies with combined turnover $50 million or more for at least one relevant year) and Start Premium (repayable assistance for high‑merit projects) (clause 4 definitions). Start Graduate targets graduate employment for research‑related work in small companies (clause 4; clause 11(2)). Concessional Loans focus on early commercialisation tasks such as trial production, IP protection and compliance (clause 4 definition; clause 12(1)(c)). COMET is a distinct commercialisation support program with its own guidelines (clause 4; clause 7(3)).

Applicant and project eligibility. The directions limit approvable applicants principally to non tax‑exempt companies (clause 10(1)). For joint applications, at least one party must be a non tax‑exempt company (clause 10(1)(b)). Turnover aggregation is required across related bodies corporate as determined under the Corporations Act (clause 4(2); clause 10(2)-(3)). The “relevant year” for turnover aggregation is the company’s income years in the three years preceding the year of income in which the application is made or fewer if incorporated for under three years (clause 4 definition). For loans, an employee headcount cap of fewer than 100 applies (clause 12(1)(a)). The instrument excludes applicants or projects that are connected to companies registered under section 39P of the parent Act from COMET support and allows refusals for such connections in grants and loans (clauses 8, 9(4), 12(5)).

Merit assessment. Applications are meant to be assessed comparatively. The Board must assess accepted applications by reference to the stated merit criteria (clauses 13-15). For grants the core criteria include management capability, commercial potential and capacity to exploit it, technical capability and resources, national benefit and whether the project would proceed unaided (clause 14(1)). Start Premium candidates must meet those criteria to a high degree and provide repayment terms (clause 14(2)). Loan merit criteria focus on management capability, market demand and competitiveness, synergies and national benefits, with additional technical and pricing considerations (clause 15).

Funding rules and caps. The directions set maximum contributions as percentages of eligible expenditure: Core Start and Start Graduate up to 50%, Start Plus 20%, Start Premium aggregate 56.25% but with fixed maximum shares when paired with Core Start (6.25%) or Start Plus (36.25%) so total maximum is 56.25% (clause 22(1)). Loans are capped at 50% of eligible expenditure (clause 22(2)). There is an overall cap of $15,000,000 on assistance for a single project or linked projects provided after 18 December 1996 (clause 25(1)); the Board must ignore amounts that have been repaid (clause 25(2)).

Repayment and interest. Start Premium assistance is repayable and subject to a maximum interest rate equal to 1.5 times the Reserve Bank Table F5 indexed lending rate in force when the agreement was made (clause 27). Loan repayments operate on a default timetable that begins 42 months after agreement, with six equal instalments over the six years following the agreement and interest accruing from the end of 36 months (clause 28). The Board may adopt alternative repayment arrangements (clause 29) and may waive repayments or interest on Start Premium where it reasonably considers this appropriate after taking into account the benefits obtained from the project (clause 30).

Program administration and controls. The Board must enter agreements before payments (clause 18) and agreements must contain specified terms including the amount and timing of payments, project obligations, record‑keeping, inspection rights, reporting, repayment provisions where applicable and compliance with the Affirmative Action (Equal Opportunity for Women) Act 1986 (clause 19). The Board can make COMET Guidelines and determine eligible expenditure in writing or by guideline (clause 7(3), clause 20(2)-(3)). The Board is required to monitor projects and cooperate with independent evaluation at the Minister’s request (clause 31). Program funding available each year is the funding nominated in the Portfolio Budget Statement as varied by Portfolio Additional Estimates or by the Minister (clause 4 definition of program funding).

Procedural constraints and discretion. Although some provisions use “must” (binding), the directions supply discretionary powers (express “may” where intended) and set budgetary threshold checks that can prevent grants being made even when an application meets technical eligibility and merit (clause 17). The instrument also revokes earlier directions and sets transitional provisions for applications in process at commencement (clauses 33-36).

Primary affected parties

• Applicants and potential applicants: The directions principally target non tax‑exempt companies as applicants for financial assistance and loans (clause 10(1)). For joint applications, at least one party must be a non tax‑exempt company (clause 10(1)(b)). Start Graduate targets small companies (turnover less than $50 million) that engage graduates (clause 11(2); clause 10(2)). Concessional Loans are limited to applicants (and their related bodies corporate) with fewer than 100 employees (clause 12(1)(a)).

• Related bodies corporate and corporate groups: Turnover thresholds and aggregation of turnover for eligibility are determined by reference to related bodies corporate as under the Corporations Act (clause 4(2); clause 10(2)-(3)). That means corporate structuring and intra‑group arrangements affect whether a firm is Core Start or Start Plus eligible.

• Research institutions: Research institutions are defined expansively in clause 4 and are relevant to Start Graduate projects (clause 4 definition; clause 11(2)(b)). For Start Graduate, part of grant payments may be paid directly to a research institution (clause 19(i)).

• Entities registered under s 39P of the Industry Research and Development Act: COMET applications may be refused if the applicant is registered under s 39P, if related to a company registered under s 39P, or if the application relates to IP developed under such a project (clause 8). Similar refusal grounds apply for loans and other financial assistance (clauses 9(4), 12(5)).

• The Industry Research and Development Board and the Minister: The Board administers the program and makes grants, loans and COMET decisions in accordance with the directions (clause 7). The Minister supplies program funding via the Portfolio Budget Statement; the Board must consider program funds and future commitments when deciding whether a meritorious application can be granted (clause 4 definition; clause 17). The Board must also cooperate with Minister‑requested independent evaluations (clause 31).

Secondary affected parties

• Commonwealth financial administration: Program funding is drawn from appropriations as set out in the Portfolio Budget Statement and can be varied by the Minister or in Additional Estimates (clause 4 definition of program funding; clause 21 on authorised payment years).

• Suppliers and contractors: Eligible expenditure is a defined concept under Board guidelines or determinations; suppliers to a project will be affected because grants and loans are calculated as percentages of eligible expenditure (clauses 20-22). GST reimbursement for supplies made to the Commonwealth under grant agreements is expressly allowed but limited to the GST actually payable (clause 22(1) ancillary GST wording).

• Affirmative Action Agency: Applicants named by the Affirmative Action Agency as non‑compliant with the Affirmative Action (Equal Opportunity for Women) Act 1986 cannot receive financial assistance (clause 10(7)). This creates an operational link between grant eligibility and the Agency’s non‑compliance listings.

Who pays and who decides

• Who pays: Funding is paid by the Commonwealth, drawn against program funds appropriated for the R&D Start Program (clause 4 definition; clause 21). For Start Graduate, part of the payment may be made directly to a research institution (clause 19(i)).

• Who decides: The Board decides acceptance, merit assessment and awards subject to the directions’ constraints (clause 7(2), 9(1), 13(1)). The Minister does not appear to have a direct veto in the text, but program funding is set in Budget material that the Minister may vary, and the Minister can request independent evaluation (clause 21; clause 31(b)).

Other practical effects

• Companies with connections to s 39P registered entities face exclusion or discretionary refusal for COMET and possibly grants or loans (clauses 8, 9(4), 12(5)).

• Companies approaching the $50 million turnover threshold must consider aggregation rules when choosing whether to apply under Core Start or Start Plus (clause 4; clause 10(2)-(3)).

• Applicants who cannot obtain commercial funding and small employers seeking early commercialisation finance are particularly affected by the loan conditions (clause 12(1)(b)-(c)).

• The Board’s contractual powers (clause 19) and monitoring obligations (clause 31) create ongoing compliance duties for successful applicants.

Duties of the Board

• Administer program components: The Board must administer Start Grants, Start Graduate, Concessional Loans and COMET (clause 7(1)-(2)).

• Deal promptly: The Board must deal with an application as soon as practicable after receipt (clause 6).

• Accept eligible applications: For financial assistance, the Board must accept an application where it is satisfied the applicant and project meet clauses 10 and 11 respectively (clause 9(1)). For loans, the Board must accept an application if it considers the applicant meets clause 12 eligibility criteria (clause 12(1)).

• Merit assessment and comparative determination: Once accepted, the Board must assess and rank the relative merit of applications against specified criteria (clauses 13-15). This includes comparing eligible applications and, for loans, a similar comparative assessment (clauses 13(1)(a)-(b)).

• Enter formal agreements before payments: The Board must enter an agreement with a successful applicant before providing financial assistance or a loan (clause 18).

• Monitor and evaluate: The Board must ensure projects are monitored to obtain evaluation information and cooperate with independent evaluation at the Minister’s request (clause 31).

• Make COMET Guidelines and determine eligible expenditure: The Board may make COMET guidelines (clause 7(3)) and may make guidelines or written determinations about eligible expenditure (clause 20).

• Observe policy objectives: The Board must have regard to specific policy objectives such as increasing commercially promising R&D, fostering commercialisation, and encouraging collaboration (clause 5).

Duties and obligations imposed on recipients in agreements

• Conduct the project: Agreements must require the applicant to conduct the project (clause 19(c)).

• Reporting and records: Agreements must require applicants to keep records, report on project conduct and management, and permit inspection of premises and records (clause 19(d)-(f)).

• Repayable assistance and loans: For Start Premium and loans, agreements must provide for repayment; interest may be charged as provided by the directions (clause 19(g)). Start Premium agreements must provide for repayment by each joint applicant where relevant (clause 10(5); clause 19(g)(i)).

• Legislative compliance: Agreements must not be inconsistent with Commonwealth, State or Territory laws and must require compliance with the Affirmative Action (Equal Opportunity for Women) Act 1986 (clause 19(a), (j)).

Rights and entitlements of applicants

• Right to apply and to have application dealt with promptly: Applicants can lodge applications and the Board must deal with them as soon as practicable (clause 6, clause 9).

• Right to acceptance where statutory tests are met: The Board “must accept” applications for financial assistance and “must accept” loan applications subject to the stated satisfaction criteria (clauses 9(1), 12(1)). That language creates a procedural entitlement where the Board’s satisfaction is confined to the directions’ criteria and the Board must act accordingly.

• Right to variation of decisions: An applicant may request the Board to vary certain decisions (clause 32(1)). The Board may vary decisions if the variation would significantly advance project objectives, be consistent with policy objectives, and be appropriate in all circumstances (clause 32(2)).

• Right to GST reimbursement limited to GST actually payable: Financial assistance may include reimbursement of GST payable by the applicant on supplies made to the Commonwealth, up to the GST actually paid (clause 22(1)).

Constraints and conditional rights

• Budget and program‑funding constraint: Even where an application meets eligibility and merit, the Board must not grant if the application cannot be accommodated within current and projected program funds and indicative targets for approvals (clause 17). That places a practical budgetary limit on the procedural acceptance obligations.

• Previous application history and similarity: The Board may refuse if the application is the same or substantially the same as a previously refused or unsuccessful application, or where the applicant already has more than one outstanding undecided application (clauses 9(2)-(3), 12(3)-(4)).

• Legal and policy compliance: Applicants named by the Affirmative Action Agency as non‑compliant are ineligible for financial assistance (clause 10(7)). COMET and other assistance may be refused for connections to s 39P registered entities (clauses 8, 9(4), 12(5)).

Operational powers

• Determine eligible expenditure and payment years: The Board can determine what expenditures qualify and can authorise payments in the current and subsequent years where appropriations exist (clauses 20-21).

• Set repayment terms within prescribed parameters: For Start Premium and loans the directions set maximum interest rates and default repayment timetables, but the Board can agree different arrangements (clauses 27-29). The Board may also waive repayments or interest for Start Premium in appropriate cases (clause 30).

Overall, the directions create a structured set of predictable duties and reciprocal rights: the Board must process and assess applications according to the rules; applicants must meet eligibility and performance obligations and accept monitoring and repayment terms where applicable.

The directions do not create express criminal penalties or specific statutory civil penalties within their text; they instead establish contractual, administrative and funding‑related enforcement mechanisms that operate through agreements, monitoring and repayment provisions.

Contractual enforcement via agreements. The Board must enter an agreement with each successful applicant before making payments (clause 18). Agreements are required to include project conduct obligations, record‑keeping, reporting and inspection powers (clauses 19(c)-(f)). These contractual terms provide the Board with conventional enforcement levers: termination, variation and repayment clauses are expressly contemplated (clause 19(h)). While the directions do not spell out default remedies (for example, acceleration, set‑off, or recovery procedures), the presence of repayment terms and inspection and reporting requirements implies enforcement through breach of contract processes available to the Commonwealth.

Repayment and interest obligations. Start Premium assistance is repayable by the recipient and the agreement must provide for repayment (clause 19(g)). Loans must be repaid within the term and interest is charged according to the directions unless otherwise provided (clause 28). The repayment schedules and interest accrual rules create quantifiable financial obligations that the Commonwealth can enforce under the terms of the agreement and, where necessary, by ordinary debt recovery procedures. The Board also has express power to vary repayment arrangements (clause 29) or to waive repayments/interest in certain Start Premium cases (clause 30).

Monitoring and evaluation as compliance tools. The Board is required to monitor projects and to facilitate independent evaluation at the Minister’s request (clause 31). Monitoring, reporting and inspection rights in agreements (clause 19(d)-(f)) enable the Board to detect non‑compliance and to rely on contractual termination or repayment mechanisms where agreements are breached.

Administrative refusal and discretionary control. The directions also create administrative enforcement through refusals, suspensions or non‑funding. The Board may refuse applications on specified grounds (clauses 8, 9, 12). It must not grant funding if program funds and future commitments mean a meritorious application cannot be accommodated (clause 17). Those controls limit the Commonwealth’s financial exposure and act as a pre‑payment enforcement layer.

Absence of statutory penalty clauses in the directions. The instrument contains no express criminal sanctions or detailed civil penalty clauses for false statements, fraud, misuse of funds, or breach of monitoring obligations. Nor does it state administrative pecuniary penalties separate from contractual obligations. Recovery, penalties and sanctions for non‑compliance will therefore depend on the terms of the agreements entered into under clause 18 and on the Commonwealth’s general legal remedies for breach of contract and debt recovery. The directions do permit inspection and reporting obligations which, if breached, will typically be enforced through the contractual regime rather than by new statutory penalties within the directions.

Interaction with other enforcement regimes. Because agreements must not be inconsistent with Commonwealth, State or Territory law (clause 19(a)), additional enforcement mechanisms , for example, tax law, corporations law or fraud offences , remain available under other statutes. The directions also link eligibility to the Affirmative Action Agency’s non‑compliance list (clause 10(7)), which imposes an administrative exclusionary sanction on grant eligibility.

In short, enforcement is implemented through contract terms, monitoring and administrative refusals, with repayment and interest provisions providing the clearest monetary enforcement trigger. The directions themselves do not set out a standalone penalty schedule.

Direct references to other Commonwealth statutes and financial indices in the directions create explicit interaction points and constraints.

Industry Research and Development Act 1986. The directions are made and operate under subsections 19(1) and 20(1) of the Industry Research and Development Act 1986 (preamble). Clauses 8, 9(4) and 12(5) reference registration under section 39P of that Act as a trigger for refusal in COMET applications and for refusing certain financial assistance or loans. That embeds the directions within the regulatory regime of the parent Act and creates interdependence between the Board’s program administration and registration decisions under the parent statute.

GST and A New Tax System (Goods and Services Tax) Act 1999. The directions adopt the GST definition from the GST Act (clause 4(1)) and permit grant and loan payments to include a reimbursement for GST payable by an applicant on supplies made to the Commonwealth under the grant agreement, limited to the GST actually paid (clause 22(1)). That creates a direct interaction between grant accounting and GST obligations and entitlements under the GST Act.

Income Tax Assessment Act 1997. The directions exclude companies to which Division 50 of the Income Tax Assessment Act 1997 applies from being “non tax‑exempt companies” for the program’s purposes (clause 4 definition of non tax‑exempt company). That cross‑reference affects who may be eligible for grants and loans under clauses 10 and elsewhere.

Corporations Act 2001. Aggregation of turnover for eligibility purposes uses the related‑body‑corporate concept as determined under the Corporations Act (clause 4(2); clause 10(2)-(3)). This requires applicants to apply corporations law concepts to compute combined turnover and thereby determines whether they qualify for Core Start or Start Plus.

Affirmative Action (Equal Opportunity for Women) Act 1986. Clause 10(7) disqualifies applicants named by the Affirmative Action Agency as non‑compliant with that Act from receiving financial assistance. Agreements must also require compliance with the Affirmative Action Act (clause 19(j)). These provisions make grant eligibility contingent on compliance with separate Commonwealth equal opportunity requirements.

Reserve Bank and Commonwealth Bank indices. Interest rates for Start Premium and loans are tied to market indices. Start Premium interest is capped at 1.5 times the indexed rate set out in Table F5 (Indicator Lending Rates) published monthly in the Reserve Bank of Australia Bulletin or a similar commercial borrowing rate index current at the time the agreement is entered into (clause 27). Loan interest is to be charged at 40% of the Commonwealth Bank Loan Index Rate or such other rate as the Board may decide (clause 28(3)(a)). The directions therefore reference external financial benchmarks to set maximum payable interest, linking Commonwealth assistance pricing to market indices.

Portfolio Budget Statement and appropriation. Program funding or program funds are defined as the funding made available by the Commonwealth for the R&D Start Program in any given financial year as specified in the Portfolio Budget Statement, subject to variation by Additional Estimates or by the Minister (clause 4 definition). Clause 21 restricts authorised payments to years for which the Program receives an appropriation. Clause 17 requires the Board to consider program funds, commitments and indicative targets before granting assistance. This makes the Budget appropriation and the Minister’s control over it a practical constraint on awarding assistance.

Commonwealth, State and Territory laws. Agreements must not be inconsistent with any Commonwealth, State or Territory law (clause 19(a)). That is a general savings clause preserving the application and primacy of other regulatory regimes.

Transitional and revocation interactions. The directions revoke earlier R&D Start Program Directions No. 1 and No. 2 of 2002 and carry transitional provisions preserving the application of earlier directions to grants made under revoked directions (clauses 33-36). That provides continuity while changing the Board’s rules.

Taken together, these cross‑references mean applicants and the Board must apply tax law, corporations law, equal opportunity administrative lists, financial indices and Budget appropriation conditions when determining eligibility, calculating grant amounts, setting interest, and administering agreements. The directions are therefore not a free‑standing instrument: compliance requires integration with multiple other legislative and administrative regimes.

This instrument itself is a set of directions dated 28 November 2002 and signed by the Minister for Industry, Tourism and Resources (preamble). The directions commence on the day they are published in the Gazette (clause 2).

Revocation of prior directions. Clauses 33 and 34 revoke R&D Start Program Directions No. 1 of 2002 and R&D Start Program Directions No. 2 of 2002 respectively, subject to transitional provisions (clauses 33-34). Clause 4 defines “revoked directions” to include directions revoked by clause 33, those revoked by R&D Start Program Directions No 1 of 2002, No 1 of 2000 or No 1 of 1998. This indicates the instrument replaces and consolidates earlier directional instruments.

Transitional provisions. Clause 35 preserves the application of R&D Start Program Directions No. 1 of 2000 and R&D Start Program Directions No. 1 of 2002, as in force before commencement, for grants, loans or other payments provided under any revoked directions. Clause 36 deems the Board to have refused any application for financial assistance or loan that it had received but not granted before the commencement of R&D Start Program Directions No. 2 of 2002. These transitional clauses address applications and payments that straddle the changeover between instruments.

Commencement mechanics. The operative commencement clause is clause 2, which ties commence­ment to Gazette publication. There is no staged commencement; the instrument takes effect on publication.

No textual amendments within the instrument. The text provided sets out the directions as a standalone instrument. The instrument does not itself record prior amendments to these directions beyond the revocation and transitional treatment of older directional instruments. It also contains its own internal policy and operational settings (eligibility, merit criteria, funding percentages, repayment regimes). Any further amendments after this instrument would need to be found in later directions, legislative amendments to the parent Act, or subsequent administrative instruments; none are recorded within this text.

Administrative hierarchy. The directions are issued under the Industry Research and Development Act 1986; therefore any subsequent amendment to the parent Act or further directions under ss 19 or 20 of that Act could alter the Board’s functions or the program’s parameters. This instrument expressly contemplates that program funding is determined by the Portfolio Budget Statement and may be varied by additional estimates or by the Minister (clause 4 definition).

Record of date. The directions are dated 28 November 2002 and signed by the Minister (preamble and signature). That date is the instrument’s signature date and situates the instrument relative to the revocation and transitional chronology specified in clauses 33-36.

In short, these directions replace and consolidate earlier directional instruments governing the R&D Start Program as at their commencement, and include explicit transitional provisions to preserve or deem outcomes from those earlier instruments where specified.

The directions do not reference any litigation, cases, or judicial determinations. The text contains no judicial citations, nor does it record that any judicial or administrative review decisions have interpreted these directions.

What is explicit in the instrument:

• The directions make administrative decisions and create a decision‑making regime (acceptance, merit assessment, grant or refusal, agreements, monitoring). Those decisions could, in principle, be the subject of judicial review or contractual litigation in the ordinary course. However, the directions themselves do not canvass or prescribe remedies, nor do they mention how disputes under agreements should be determined.

• The directions use mandatory procedural language in parts (for example, the Board “must accept” applications meeting eligibility and project requirements under clause 9(1), and “must enter into an agreement” before payment under clause 18). Parties disappointed by administrative decisions (for example, refusals under clauses 9(2)-(4), 12(3)-(5), or refusal due to program fund constraints under clause 17) may have grounds to seek judicial review on standard public law grounds, but the instrument contains no litigation guidance.

• The directions create contractual obligations that, if breached by either party, would be enforced through contract law and ordinary civil remedies. They do not create a distinct statutory enforcement tribunal within the instrument.

Because the instrument contains no mention of litigation history or judicial interpretation, users must consult external legal databases, case law repositories or government records to identify whether any disputes have since arisen in relation to these directions, and to ascertain the judicial treatment of any Board decisions made under them. This directions text alone does not provide a litigation record.

The directions are operationally precise but include several technical pitfalls and practical traps that applicants and advisers must account for.

“Must accept” versus budgetary override. Clause 9(1) states the Board must accept an application for financial assistance if it is satisfied the applicant meets clause 10 and the project meets clause 11. However, clause 17 then bars granting assistance if, after assessing program commitments, available funds and indicative targets, the application cannot be accommodated. The result is that statutory satisfactions as to eligibility and merit do not guarantee grant payment if program funding constraints make the award impracticable. That creates a contingent entitlement , acceptance for assessment is distinct from awarding funds.

Aggregation of turnover and related bodies corporate. Eligibility for Core Start versus Start Plus turns on combined turnover for each “relevant year” (clause 10(2)-(3)). Clause 4(2) ties related‑body‑corporate status to the Corporations Act. Practically, that requires careful consolidation of group turnover across three preceding income years (or fewer if incorporated recently) to determine whether an applicant falls under the $50 million threshold. Group structuring, acquisitions, or related party arrangements can change eligibility overnight; advisers must apply Corporations Act concepts to compute aggregated turnover.

Definition of “relevant year” and turnover timing. The “relevant year” is the company’s income years in the three years preceding the year of income in which the application is made (clause 4). That may produce counterintuitive outcomes for companies with non‑standard income year ends or recent incorporations. Applicants must ensure their tax year accounting aligns with the turnover tests and confirm which income years are counted.

COMET exclusions tied to s 39P registrations. Clause 8 allows the Board to refuse COMET applications where the applicant or connected entities are registered under s 39P of the Act. Clauses 9(4) and 12(5) extend similar refusal powers to grants and loans. Applicants must check whether their related projects involve IP or entities connected to s 39P registered companies, because that connection may be sufficient for refusal even if the applying entity itself is eligible on other grounds.

Similarity and prior applications. The Board may refuse an application it reasonably considers to be the same or substantially the same as another application that was not accepted or that was accepted but did not result in funding (clause 9(2), clause 12(3)). Applicants with rejected prior proposals should carefully distinguish new submissions to avoid being treated as repetitious. The Board can also refuse where an applicant already has more than one pending undecided application (clause 9(3), clause 12(4)), so pipeline management is important.

Eligible expenditure is not automatic. Clause 20 permits the Board to set eligible expenditure by guideline or by written determination, and clause 20(3) permits the Board to determine eligible expenditure incurred after an application is received. But if expenditure is not included in the guideline or the determination, it will not be eligible for funding. Applicants should obtain written clarity on what the Board will accept as eligible costs before committing large sums.

GST reimbursement limited to GST actually paid. Clause 22 allows reimbursement for GST on supplies made to the Commonwealth under the grant agreement, but only up to the GST actually payable by the applicant. Applicants should document GST payments and ensure supplies to the Commonwealth are structured so GST reimbursement can be claimed where intended.

Start Premium arithmetic and interaction with Core Start/Start Plus. Clause 22(1)(c) gives Start Premium an aggregate funding figure of 56.25% of eligible expenditure, but then specifies that when Start Premium is provided with Core Start its maximum contribution is 6.25%, and when provided with Start Plus it is 36.25%. Practically, this means:

• Core Start (50%) + Start Premium (6.25%) = 56.25% total available; and
• Start Plus (20%) + Start Premium (36.25%) = 56.25% total available.

Applicants and advisers must understand that Start Premium does not add to Core Start or Start Plus beyond the fixed totals. Also, Start Premium is repayable and subject to a minimum amount of $60,000 (clauses 22(1)(c), 23).

Loan timing and repayment quirks. Loans carry a fixed default repayment timetable (repayable in six equal instalments starting no later than 42 months after the agreement; interest accrues from the end of 36 months) (clause 28). Interest is fixed for the term and is set at 40% of the Commonwealth Bank Loan Index Rate unless the Board selects another rate (clause 28(3)). However clause 29 allows the Board to make different arrangements. Applicants must plan cashflows carefully: loans do not require immediate repayment but begin to accrue interest after three years and repayments start at 42 months.

Project duration limits and suspension determinations. Non‑Start Graduate projects are limited to three years (clause 26(1)). The Board can extend to five years if it reasonably considers objectives will be advanced and can exclude periods of suspension (up to one year total) provided suspension is continuous for at least 30 days (clause 26(3)-(4)). Applicants relying on long development cycles should budget for the need to seek formal extensions and to document suspensions.

Affirmative Action exclusion. Failure to comply with the Affirmative Action (Equal Opportunity for Women) Act 1986 will exclude applicants named by the Affirmative Action Agency from receiving financial assistance (clause 10(7)). That is an adjacency risk: HR compliance failures can directly jeopardise funding.

Program funding constraint. Clause 17 requires the Board to consider existing commitments and future program funds in deciding grants, making funding effectively subject to public budgeting cycles. Even meritorious projects can be declined for budgetary reasons, so applicants should consider variant funding strategies.

Transitional deemed refusals. Clause 36 deems the Board to have refused applications it had received but not granted before the commencement of the R&D Start Program Directions No. 2 of 2002. Applicants with applications in process during changes in directions risk administrative discontinuity and must check transitional status.

Overall, these directions demand careful pre‑application due diligence on corporate group structure, tax and GST positions, prior application history, connections to s 39P registered entities, and financial planning for repayable assistance and loans.

Practical compliance requires both preparatory and ongoing actions. The following is a structured compliance checklist mapped to the directions’ key clauses.

Pre‑application due diligence

1. Confirm applicant status.

   • Verify that the applicant is a “non tax‑exempt company” (clause 10(1)) by checking whether Division 50 of the Income Tax Assessment Act 1997 applies. If a joint application, ensure at least one party qualifies (clause 10(1)(b)).

2. Aggregate turnover and related party analysis.

   • Determine related bodies corporate as under the Corporations Act (clause 4(2)).
   • Calculate combined turnover for each relevant year (the three preceding income years or fewer if recently incorporated) to determine Core Start (<$50m) or Start Plus (≥$50m) eligibility (clause 4 definition; clause 10(2)-(3)). Document methodology and supporting tax returns.

3. Confirm employee headcount for loan eligibility.

   • For loan applicants, establish that total employees in the applicant and related bodies corporate are fewer than 100 (clause 12(1)(a)).

4. Check for s 39P connections.

   • Search whether the applicant, any related company, or any relevant project IP is connected to a company registered under s 39P of the Industry Research and Development Act (clauses 8, 9(4), 12(5)). If such connections exist, consider whether COMET or other assistance might be refused.

5. Affirmative Action compliance.

   • Confirm the applicant is not named by the Affirmative Action Agency as non‑compliant, otherwise clause 10(7) disqualifies grant receipt.

6. Funding and pipeline considerations.

   • Check recent program approvals and the Portfolio Budget Statement or Budget papers for program funding levels; be prepared for clause 17 constraints due to program commitments.

Application preparation

1. Project definition and scope.

   • Ensure the project aims to produce a clearly identified product, process or service and involves R&D activities (clause 11(1)(a)-(b)). For Start Graduate ensure the project involves a graduate working in R&D related activities and is intended to form or strengthen links with research institutions (clause 11(2)).

2. Evidence for merit criteria.

   • Prepare supporting documentation mapped to the merit criteria. For grants include management capability evidence, market and commercialisation plans, technical capability and resources, expected national or industry benefits, and evidence that the project would not proceed satisfactorily without assistance (clause 14(1)). For loans, emphasise management capability, market demand, competitiveness, technical/commercial synergies and national benefit (clause 15).

3. Eligible expenditure and budgets.

   • Consult Board guidelines or seek a written determination on eligible expenditure under clause 20(2)-(3) before finalising budgets. Clearly identify costs to be funded and the applicant’s co‑funding capacity, since the Board must not grant assistance unless the applicant can fund costs not met by assistance (clause 10(6), clause 12(2)(b)).

4. GST and invoicing.

   • Structure supplies to the Commonwealth under the grant agreement so that GST is properly invoiced and documented. The directions permit GST reimbursement up to the GST actually payable (clause 22(1) ancillary wording).

5. Prior application history.

   • If there were prior similar applications, document how the current submission differs to avoid a refusal under clause 9(2) or clause 12(3). Avoid having more than one undecided application per applicant where possible or explain the need for multiple pipeline applications (clause 9(3), clause 12(4)).

Application submission and post‑acceptance

1. Timing.

   • The Board must deal with applications as soon as practicable (clause 6), but approvals are subject to program funding conditions (clause 17). Track submission dates and follow up promptly.

2. Agreements.

   • Be prepared to enter an agreement containing the required terms (clause 19). Review the draft agreement to ensure the amount, timing and method of payment is clear; confirm record‑keeping, inspection and reporting obligations are practical, and ensure repayment provisions (Start Premium or loan) are understood.

3. Cashflow and repayment modelling.

   • For Start Premium model repayments and interest under clause 27 (maximum interest 1.5 times RBA Table F5 rate). For loans build cashflow for interest accrual from 36 months, first repayment by 42 months and five subsequent six‑monthly instalments (clause 28). Consider whether to request alternative repayment terms under clause 29 and prepare supporting financial evidence if seeking variation.

4. Monitoring, reporting and record retention.

   • Implement project management controls to meet reporting and record‑keeping requirements (clause 19(d)-(f), clause 31). Maintain accessible records for inspection and be ready to cooperate with independent evaluation if requested by the Minister (clause 31(b)).

5. Managing project timelines and extensions.

   • Note project duration limits: non‑Start Graduate projects ordinarily no more than three years, Start Graduate no more than two years, with Board discretion to extend to five years where objectives would be advanced and to exclude suspension periods within limits (clause 26). If suspension is anticipated, document reasons and timings to support any determinations excluding suspended periods.

6. Exercising variation rights.

   • If project circumstances change, an applicant may request decision variation under clause 32. Prepare evidence showing that variation would significantly advance project objectives, aligns with clause 5 policy objectives, and is appropriate in all circumstances.

Operational compliance and audit readiness

1. Internal audit trail.

   • Maintain an audit trail that maps expenditure to the Board’s eligible expenditure guidelines/determination (clause 20), GST invoices, procurement records, staff time allocations, and technical progress reports.

2. Subcontracting and supplier arrangements.

   • Ensure subcontractor agreements permit disclosure and inspection to satisfy clause 19(e), and that subcontracted tasks fall within eligible expenditure categories.

3. Record retention.

   • Keep project records for the contractually stipulated period and for a reasonable period after completion to respond to audits, inspections or Ministerial evaluations (clause 19(d)-(f); clause 31).

4. Communication with the Board.

   • Use formal channels to seek clarifications about eligible expenditure, repayment schedules or variation requests. Confirm in writing any material determinations from the Board (for example, a written determination that certain expenditure is eligible under clause 20(3)).

Special considerations

• For COMET applicants, consult the Board’s COMET Guidelines (clause 7(3)) and ensure there is no disqualifying connection to s 39P registrations (clause 8).

• Joint applications should have a clear agreement among parties that addresses joint repayment obligations for Start Premium and reporting responsibilities (clause 10(5), clause 19(g)(i)).

• For applicants seeking loans, prepare credible evidence that commercial funding was unavailable and that project results will be exploited to benefit the Australian economy (clause 12(1)(b); clause 12(2)(c)).

By treating the directions as a contractually enforced programme with Budget dependency, applicants should integrate legal, accounting and project management controls from pre‑application through to post‑completion monitoring. Where ambiguity exists about eligible expenditure or repayment terms, seek written clearance from the Board as early as possible to avoid later funding disputes under clause 20(3) and to ensure compliance with clause 19 contractual terms.