Research Block Grant Reform to Boost Incentives for Greater University and Industry Collaboration: Response to the Consultation Paper

This brief response to the Department of Education, Skills and Employment consultation paper on Research Block Grant (RBG) reform opposes changing the RBG allocation formulae to further reward industry-funded university research. Research Australia maintains that the value of RBG funding has fallen relative to research activity: university Higher Education Research Data Collection (HERDC) income rose 66.3% between 2010 and 2020, from $3.1 billion to $5.1 billion, and higher degree by research completions rose 40.3%, while RBG funding rose only 37%, from $1.4 billion to $2 billion. The ratio of RBG to HERDC income fell from 46.4% to 38.3%. Australian Bureau of Statistics data show business expenditure on university R&D rose 15.5% between 2018 and 2020 to $603 million, while pure basic research fell 11.3% ($314 million) to $2.5 billion, its first fall in dollar terms, and from 25% of university research expenditure in 2010 to 19.4% in 2020. Research Australia warns that further incentives would displace public good research rather than expand total research, and notes that reliance on international student revenue has proved risky. It recommends that the impact of the Watt Review be evaluated before further formula changes, and that additional RBG funding is the only measure it would support to increase industry engagement.