3 May 2014 – Following are highlights of the recommendations from the Commission of Audit relevant to the built environment sector and sustainability, collated by Willow Aliento

The Commission recommends abolishing the Australian Reinsurance Pool Corporation (over time) and the Clean Energy Finance Corporation.

In addition to the potential rationalisation of a number of industry assistance programs, scope exists to rationalise agencies and bodies within the portfolio, including consolidating the Australian Renewable Energy Agency into the Department of Industry.

The Commission also recommends abolishing the Climate Change Authority and Low Carbon Australia Limited, noting legislation to abolish the Climate Change Authority is currently before Parliament as part of the carbon tax repeal bills.

The Commonwealth provides around $9 billion A year in support for Australian research and innovation. Australia’s research system generally performs well relative to other nations.

The Productivity Commission identified two rationales for public support of science and innovation.

The first is that governments need to fund research and development associated with their own core functions (for example research into defence technology and biosecurity concerns). The second is that not all of the benefits from research can be captured by the innovator, with some benefits “spilling over” to later researchers or adopters. These positive spillovers mean that some research that would benefit the overall economy may not be undertaken by business, as each individual business would not receive a sufficient return.

Where the benefits from capturing these spillovers clearly exceed the costs to government from intervening, there may be a role for Commonwealth support.

A significant amount of firm and sector-specific research is supported by measures such as the Research and Development tax concession. Specific grant programs in addition to this support have the potential to skew investment decisions.

The Commission considers that sector-specific grants (such as those through the Australian Renewable Energy Agency, National Low Emissions Coal initiative, Carbon Capture and Storage Flagships and the Innovation Investment Fund) should be abolished.

Cooperative Research Centres should be abolished, with funding rolled into the Australia Research Council Linkages program.

As part of this transition, consideration should be given to allowing longer funding periods for Australian Research Council grants. The Collaborative Research Network program — which provides funding for larger universities to collaborate with smaller, less research-intensive and regional universities should also be abolished, allowing researchers to determine their own collaboration priorities.

Given that the evidence base shows that industry clusters created deliberately by government rarely become independent of government funding, government should pull back from this area, abolishing the current Industry Innovation Precincts program, including the associated Industry Collaboration Fund, the CoA said.

Indigenous programs – recommends funding for (Indigenous) Carbon Farming cease

Public housing/NRAS

The Henry Tax Review outlined the case for extending Rent Assistance to public housing tenants, with these tenants paying the market rent of the dwelling. Under such an arrangement, the Commonwealth would need to increase aggregate Rent Assistance funding. However, this additional funding could be sourced from a redirection of funding currently contributed to the National Affordable Housing Agreement and the National Rental Affordability Scheme.

Annual funding for these two programs is currently around $1.5 billion a year.

The Commission considers that there is merit in considering this option further. Two benefits would arise from this approach.

First, the market would determine rents for public and private housing. Second, abolishing housing agreements with the states would remove duplication of effort, improve accountability and alleviate the reporting burden for State governments. Commonwealth funding currently directed to the housing agreements should be redirected to fund the extension of rent assistance to public housing tenants.

The Commission notes that there may also be flow-on effects to eligibility for Rent Assistance arising from its recommendations on family payments, age pension and other social welfare areas. If this option is adopted, implementation should include an examination of ways of ensuring that Rent Assistance is well targeted and delivered in the most appropriate way.

At a glance

The Commission of Audit proposes to abolish:

  • Australian Reinsurance Pool Corporation
  • Clean Energy Finance Corporation
  • Climate Change Authority
  • Export Finance and Insurance Corporation
  • IIF Investments Pty Ltd
  • Low Carbon Australia Limited

Grant programs proposed for abolition:

  • Asian Century Business Engagement Plan Grants
  • Collaborative Research Networks
  • Commercialisation Australia
  • Community Broadcasting Program
  • Creative Young Stars Program
  • Enterprise Connect Innovation Centres
  • Enterprise Solutions Program – Establishment
  • Export Market Development Grants
  • Industry Collaboration Fund
  • Industry Innovation Precincts
  • Innovation Investment Fund
  • National School Chaplaincy and Student Welfare Program
  • Parliament and Civics Education Rebate
  • Rural Financial Counselling Service
  • Small Business Advisory Services Program
  • Suburban Jobs Program
  • Tourism Quality Grants
  • Voluntary Environment, Sustainability and Heritage Organisations

Proposes to review with view to merge/abolish the following organisations:

  • AAF Company
  • Aboriginal Hostels Limited
  • Anindilyakwa Land Council
  • Army & Air Force Canteen Service
  • Australian Customs and Border Protection Service
  • Australian Film, Television and Radio School
  • Australian Inst. of Aboriginal & Torres Strait Islander Studies
  • Australian Institute of Criminology (AIC)
  • Australian Military Forces Relief Trust Fund
  • Australian Securities and Investments Commission
  • Australian Transaction Reports and Analysis Centre
  • Central Land Council
  • Department of Immigration and Border Protection
  • National Capital Authority
  • National Transport Commission
  • Northern Land Council
  • Outback Stores Pty Ltd
  • RAAF Veterans’ Residences Trust Fund
  • RAAF Welfare Recreational Company
  • Royal Australian Air Force Welfare Trust Fund
  • Royal Australian Navy Relief Trust Fund
  • Royal Australian Navy Central Canteens Fund
  • Sydney Harbour Federation Trust
  • Tiwi Land Council
  • Torres Strait Regional Authority
  • Wreck Bay Aboriginal Community Council