Government Eviscerates Australian Science & Innovation Funding

Last Tuesday evening, Treasurer Joe Hockey handed down the first budget to be delivered by the current Australian Government.  We were warned that it would be tough, and that the Government needed to find billions of dollars in savings in order to bring the budget back into surplus over the next few years.  But I had hoped, nonetheless, that it would at least ensure the country’s ongoing investment in key science, innovation, technology and commercialisation programs, to build the expertise, skills and industries that will be most important globally throughout the coming years and decades.

Unfortunately, it seems that one of the Federal Government’s strategies in its 2014 budget is to mortgage the country’s long-term future to produce a better balance sheet in the near-term.

In my view, the Liberal/National Party Coalition Government is selling out Australian science, technology, innovation and creativity.  We will surely come to regret the loss of opportunities, over the coming years, for this country to develop and grow intellectual capital and technological skills.

The LNP government has cut more than A$450 million from key science agencies, including:

1. A$111.4 million from the CSIRO;
2. A$74.9 million from the Australian Research Council;
3. A$80 million from the Cooperative Research Centres program;
4. A$7.8 million from the Australian Institute of Marine Science;
5. A$120 million from the Defence Science and Technology Organisation;
6. A$27.6 million from the Australian Nuclear Science and Technology Organisation; and
7. A$36 million from Geoscience Australia.

What good news there is for science and innovation in the budget – e.g. a new Medical Research Future Fund, and an Entrepreneurs’ Infrastructure Programme – is more than offset by cuts elsewhere.  What this budget lacks is any kind of coherent long-term vision for the kind of capabilities, industries, skills, knowledge – the intellectual capital and infrastructure – that will make up the Australian economy in five years and beyond, once the painful short-term cuts to expenditure have done their work.

Impact on CSIRO

While the CSIRO may not be perfect, it is nonetheless a vital powerhouse of science and innovation in Australia.  It can count among its achievements being the first Australian organisation on the Internet, the development of technology underpinning modern Wi-Fi networks, the world’s first effective flu treatment, the invention of extended-wear contact lenses and polymer bank notes. 

The CSIRO is Australia’s largest holder of registered IP rights, with 3582 patents, 728 inventions and 275 trademarks.  It grants around 80 commercial licences each year for access to these technologies.  It engages in R&D partnerships with over 2000 companies each year, and was Boeing’s R&D supplier of the year in 2011. 

Yet, despite its many achievements, the cuts to the CSIRO will result in the loss of 420 jobs by the end of June 2015, and possibly 80 more in the following three years, in addition to the 300 full-time equivalent positions already on the way out as a result of a restructure already forced upon the organisation by this Government.

The Australian Climate Change Science Program – a partnership between the CSIRO and the Australian Bureau of Meteorology that has been running since 1989 – is to be incorporated into a new National Environmental Science Program, with a funding cut of $21.7 million.

The CSIRO is also the largest single research organisation involved in the Cooperative Research Centres program, which may result in harm to that program over and above the A$80 million in funding cuts delivered in the budget.

Other Cuts to Research and Commercialisation

The Government has also signalled an intention to impose ‘tuition’ fees on postgraduate research students, clearly failing to understand that PhD candidates are already effectively ‘cheap labour’, foregoing more financially lucrative career options to undergo what amounts to a research apprenticeship.

On top of this, the Government will cease all funding to the information and communications technology research body National ICT Australia (NICTA) from 2016. 

From 1 January 2015, Commercialisation Australia – a program for start-ups and innovation commercialisation, which has so far supported over 500 companies with grants totalling more than A$200 million – will be discontinued, as will the Innovation Investment Fund, which has co-invested with the private sector in venture capital funds to grow early-stage companies.

From 1 July 2014, the rates of the government’s R&D Tax Incentive program will be reduced by 1.5%.  While this matches a reduction in the corporate tax rate, the tax cut will not come into effect until 12 months later, on 1 July 2015.

The ‘Good’ News

Despite slashing almost every other area of science, research and innovation funding, the Government has honoured a promise to protect medical research funding, through the creation of a new A$20 billion Medical Research Future Fund.  Sadly, this fund will be paid for out of a new seven dollar ‘co-payment’ to be made by all Australians when visiting a doctor – including the least well-off who, until now, have had the option of medical care fully-funded by the Government’s Medicare system at so-called ‘bulk billing’ clinics.

The Treasurer – who has a government car and driver, and earns an annual salary of over A$400,000 – thinks that nobody should be complaining about a contribution equivalent to the cost of a couple of beers.  Doctors who provide bulk billing services, on the other hand, tell of patients who can barely afford the bus fares to get to and from their clinics (see, e.g., the third letter here, ‘co-payment is so short-sighted’).

In any event, the net effect of all this is that those patients who can least afford to do so will be paying now for the development of treatments that may benefit patients of the future – who will have to pay again, anyway, because the bulk of the cost of bringing any treatment to market will be borne by the private sector.  Alternatively, as was argued by Professor Jeff Richardson, foundation director of the Centre for Health Economics, speaking on ABC Radio National’s Breakfast on 2 May 2014, those who can least afford it may instead now avoid GP visits, and end up requiring more urgent and expensive health care at some later stage.

So, while securing medical research funding is great, the way it is being done is not so great.  And it is of absolutely no assistance whatsoever to research in any other field.

Another new initiative is an Entrepreneurs’ Infrastructure Programme, which will receive A$484.2 million over five years.  While this sounds good – and will no doubt be good for someone, somewhere – it hardly compensates for the A$845.6 million that is being pulled out of other programs, including Commercialisation Australia and the Innovation Investment Fund. 

Furthermore, these existing programs are established, have developed focus and (in my experience) have been reasonably effective in achieving their goals.  All we know about the Entrepreneur’s Infrastructure Programme, at this stage, is that it will implement the Government’s ‘new approach to industry policy’, it will ‘focus on supporting the commercialisation of good ideas, job creation and lifting the capability of small business, the provision of market and industry information, and the facilitation of access to business management advice and skills from experienced private sector providers and researchers’ and it will ‘be delivered through a single agency model by the Department of Industry to achieve efficiencies and reduce red tape’. 

I am sorry, but that all sounds like a whole lot of spin to me!  I hope I am wrong, and it is a great success, since it may be all the government support a lot of innovative companies will have access to in this brave new world!

In genuine good news, there is $68 million in new funding in the budget for Australia’s Antarctic presence, although much of this is slated for maintaining the vital air link.

Additionally, the Australian Research Council’s Future Fellowships program, which provides four years’ funding for leading mid-career researchers, is being continued with A$140 million in funding.  While this is less money than the program had previously, it was due to terminate unless expressly renewed and funded, so this is a genuine recognition by the Government of the success and support that Future Fellowships have enjoyed.

Conclusion – It’s a FAIL!

When campaigning before last year’s Federal Election, the LNP promised that it would ‘provide the long-term, stable policies and vision that our nation’s scientists and researchers need to excel in their work’.

However, once elected, new Prime Minister Tony Abbott chose not to appoint a Minister for Science, for the first time since the position was originally created in 1931.  Channelling William Shakespeare with the implicit suggestion that ‘a rose by any other name…’, Mr Abbott asked Australians to judge the government by its ‘performance, not by our titles’ (a phrase he repeated, for emphasis, as he so often does).

I think we now have all the information we need to make that judgment.  While there were a few science, innovation and technology ‘winners’ in the budget, the pickings are slim for anyone outside the medical research field, and it appears that there will be many more ‘losers’.  Worst of all, there is just no coherent vision that I can discern for Australia’s science and technology future in the various cuts and contributions.

On this performance, the Government gets an ‘F’ from me.

Tags: Innovation, Innovation policy, Politics, Public policy, Public research