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The 2016-17 Budget: Health and Medical Research

Posted on May 4, 2016May 9, 2017Author Amanda StonestreetCategories NewsTags Australian Research Council, Biomedical Translation Fund, Cooperative Research Centres, education, Health, health and medical research, industry, Industry Growth Centres, Medical Research, Medical Research Endowment Account, medical research future fund, MRFF, NHMRC, NHMRC Funding, Research Australia, science

The following are some of the key announcements in the 2016-17 Budget which affect health and medical research. Information has been drawn from the budget papers, including portfolio and agency statements. The Budget papers are available here.

HEALTH PORTFOLIO

Medical Research Future Fund

The Budget has confirmed the Government’s continued commitment to the MRFF. However, it is now expected to meet the $20 billion target in 2020-21, a year later than first projected in the Budget in 2014 (Note 1). 2019-20 was confirmed as the target date for full capitalisation of the MRFF as recently as December last year, in the NISA Fact Sheet on the Biomedical Translation Fund (Note 2).

Funded by savings in the health system and the transfer of $1 billion from the Health and Hospitals Fund, the MRFF currently has a balance of $3.13 billion.

In last year’s Budget the Government anticipated making the first funding of $10 million available from the MRFF in 2015-16 year. This year’s Budget makes no provision for a payment in 2015-16, with funding instead commencing in 2016-17.

The projections for spending in this year’s Budget are provided in the table below, together with the estimates from last year’s Budget (Note 3). It seems likely that it will be at least 2021-22 before the MRFF is able to provide the anticipated $1 billion per annum of funding for medical research and innovation.

MRFF expenditure

$m. 2015-16 2016-17 2017-18 2018-19 2019-20
Funding (2016 Budget) 0 61 122 215 386
Funding (2015 Budget) 10 53 130 224 N/A

The NHMRC

Funding to the Medical Research Endowment Account (MREA) for the NHMRC’s research programs is $797 million for 2016/17 (Note 4). Estimates for the following three years have the funding remaining virtually stable with increases of roughly 1.5% each year. (The CPI was 1.3% for the year to the end of March 2016, the same as for the previous 12 months).

$m. 2015-16 2016-17 2017-18 2018-19 2019-20
Funding to the MREA 2016 Budget 796,265 807,383 819,400 831,163 846,638

This level of continues against a backdrop of low success rates for grants and a review of NHMRC Funding Programs to be conducted this year.

EDUCATION PORTFOLIO

Australian Research Council

Over the forward estimates, the funding to the ARC for the Discovery and Linkage programs declines compared to the 2015-16 expenditure (Note 5). Estimates for expenditure in 2016-17 to 2018-19 are also lower than projected in last year’s budget.

$m. 2015-16 2016-17 2017-18 2018-19 2019-20
Discovery (2016 Budget) 526.692 481.390 497.197 497.591 521.435
Discovery (2015 Budget) 514.269 488.792 515.239 517.496 N/A

The Linkage Program was singled out in the Government’s National Innovation and Science Agenda (NISA) as an important component of Australia’s innovation system, and it was announced that from 1 July 2016 the Program would be open to continuous applications and decision making would be fast tracked. There is, however, no additional funding for the Linkage Program. Funding for the next financial year will be $26 million less than the current year and will only increase again slightly in each subsequent year (Note 6). The estimates for the financial years 2017-18 and 2018-19 are slightly lower than in last year’s Budget.

$m. 2015-16 2016-17 2017-18 2018-19 2019-20
Linkage (2016 Budget) 288.829 262.973 264.218 270.581 276,822
Linkage (2015 Budget) 275.390 262.431 268.368 274.809 N/A

INDUSTRY AND SCIENCE PORTFOLIO

Cooperative Research Centres

In last year’s Budget the Government announced that $26.8 million would be taken from the CRC Program over four years from 2015-16, with the Government providing $732.4 million over the forward estimates (2015-6 to 2018-19)for the programme pending the outcome of the CRC Review. The Review concluded that the Program should continue with some changes, and the Government accepted this recommendation. This year’s Budget provides for only $652 million over the forward estimates from 2016-17 to 2019-20.

$m. 2015-16 2016-17 2017-18 2018-19 2019-20
CRC Program 141.148 149.839 159.651 156.095 187.211

The CRC Program is important to HMR, with 10 existing health related CRCs receiving funding under this program.

Industry Growth Centres

The Industry Innovation and Competitiveness Agenda was announced on 14 October 2014. One of its centerpieces was the Industry Growth Centres, to be established in six industry sectors of competitive strength and strategic priority:

  • Advanced Manufacturing;
  • Cyber Security;
  • Food and Agribusiness;
  • Medical Technologies and Pharmaceuticals;
  • Mining Equipment, Technology and Services; and
  • Oil, Gas and Energy Resources.

The Industry Growth Centre for Medical Technologies and Pharmaceuticals, MTP Connect, was established in 2015.

When the Program was announced the Government committed to initial funding of $248 million over the forward estimates from 2015-16 to 2018-19. This commitment has been maintained in the current Budget.

$m. 2015-16 2016-17 2017-18 2018-19 2019-20
Industry Growth Centres 36.930 60.730 93.980 56.398 39.380

Biomedical Translation Fund

The Biomedical Translation Fund (BTF) was announced as part of NISA. It will be funded with $250 million over financial years 2015-16 and 2016-17, to be diverted from contributions earmarked for the MRFF.

Closely resembling a McKeon Review recommendation (Innovation and Science Australia Chair Bill Ferris AC was a member of the Review Panel), it will use existing commercial investment managers for co-investment on a 50/50 basis, with the investment managers to source the other co-investors. There will be $125 million in 2015/16 and another $125 million in 2016-17, to be funded by reducing the contributions to the MRFF in each of those years. There is still a commitment to fully fund the MRFF by 2019-20.

While not a ‘line item’ in the Budget there are references to the Biomedical Translation Fund, to be established in 2016 as outlined in NISA, in the Budget Papers.

Notes:

Note 1: Budget Strategy and Outlook Budget Paper No. 1 2016-17  Statement 6: Debt statement, assets and liabilities  6-21
Note 2: National innovation and Science Agenda, Biomedical Translational Fund Factsheet, December 2015, www.innovation.gov.au
Note 3: Portfolio Budget Statements 2016-17 Budget Related Paper No. 1.10 Health Portfolio, Table 2.1.1, p.41
Note 4: NHMRC Portfolio Statement PBS-Health- PBS- 4.13 NHMRC   Table 2.1.1 Budgeted Expenses for NHMRC  to MREA
Note 5: Portfolio Budget Statements 2016–17 ARC Budget Statements Programme 2.1  Table 2.1.1 Budgeted Expenses for Outcome 1
Note 6: Ibid

For more information, contact Research Australia’s Head of Policy Greg Mullins on 03 9662 9420 or by email to greg.mullins@researchaustralia.org

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