Consultation invited on space research cost recovery

By on 23 March, 2021

Modern Manufacturing Strategy satellite space

Last year, the Australian Government agreed to introduce a partial cost recovery model for the assessment of applications under the Space (Launches and Returns) Act 2018 (the 2018 Act), which was outlined in the Mid-Year Economic and Fiscal Outlook (MYEFO) 2019-20.

Under the partial cost recovery model, work performed within the Agency will not be cost recovered. Work performed outside the Agency (by technical experts) will be cost recovered. A new consultation seeks feedback on the proposed implementation of this decision.

The work updates arrangements for fees previously set out in the Space Activities Act 1998, and detailed in the Space Activities Regulations 2001. Fees have not been charged in the interim period since the 2018 Act commenced.

Following the approval of partial cost recovery, fees were originally expected to commence on 1 July 2020. Due to the impacts of COVID-19 on the Australian space sector, the government deferred the commencement by 12 months.

Partial cost-recovery reflects the Australian Government’s cost recovery policy, while recognising its ambition to grow and transform the Australian space industry by absorbing costs incurred for work conducted within the Agency. A partial cost recovery model also recognises that recipients who create the need for a government activity, rather than the general public, should bear its costs. This is outlined in the Australian Government Cost Recovery Guidelines.

Fees are expected to commence on 1 July 2021.

The Agency will review the cost recovery model late in the 2021-22 financial year.

Why the consultation

The Agency is seeking feedback on draft amendments to the Space (Launches and Returns) (Insurance) Rules 2019 to implement partial cost recovery, prior to the commencement of charging fees. This includes consideration of:

  • When partial cost recovery will likely be applied.
  • The method of fee calculation.
  • Timing for payment.
  • Circumstances in which a fee may be wholly or partly waived.

The Agency is also seeking feedback on an updated draft CRIS for the partial cost recovery arrangements. The updated draft CRIS contains:

  • A summary of feedback on the previous draft CRIS.
  • Revised estimated costs of assessing applications.
  • Revised estimates of demand for approvals to 2024-25.

The Agency is particularly interested in seeking feedback on the following:

  • Do the demand estimates in the updated draft CRIS appropriately reflect proposed future space activities?
  • Is the payment period appropriate?
  • Are there other aspects of the fee calculation (other than the method of fee calculation) that the Agency should consider?
  • Will the inclusion of a fee waiver for activities that can demonstrate innovation and entrepreneurship in the sector support the growth of the industry?
  • What attributes would demonstrate an activity supports innovation and entrepreneurship in the sector, when considering whether fees should be partially or wholly waived?

Feedback will inform the Agency’s consideration of implementation arrangements, including circumstances to be considered when deciding whether to waive or partially waive a fee.

Written submissions on the draft rule amendments and updated draft CRIS are welcome up until 12 April 2021. Submissions will be published on this website unless marked as confidential.

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