Response to the Independent Review of the Operation of the NRFC Act: Discussion Paper

This submission responds to the discussion paper for the independent review of the operation of the National Reconstruction Fund Corporation Act 2023 (NRFC Act). Research Australia supports the National Reconstruction Fund (NRF) but maintains it will reach its potential only if embedded in a connected innovation system, and that health and medical research, which accounts for a quarter of Australia’s research and development (R&D), should be a stronger focus. It cites Australia’s ranking of 102nd of 145 countries for economic complexity, gross expenditure on R&D of 1.68% of gross domestic product against an OECD average of 2.72%, and government R&D spending of about 0.49% against 0.74%. It maintains the NRF should target the ‘valley of death’ between discovery and commercialisation, where private capital is reluctant, and complement the Research and Development Tax Incentive. Using a 2024 case study of shortages of off-patent maternity medicines such as labetalol, nifedipine and misoprostol, it recommends an institutional anchor equivalent to the US Biomedical Advanced Research and Development Authority (BARDA), linked to the Australian Centre for Disease Control. Its three main recommendations are: amend section 17 to require alignment with the National Health and Medical Research Strategy and include the Minister for Health and Ageing in coordination; incorporate BARDA-like cornerstone buyer functions; and explicitly integrate philanthropy, pooled investment vehicles and the R&D Tax Incentive. It also proposes a public performance dashboard, restored Australian Bureau of Statistics R&D data funding and an Australian Spinouts Register.