Pre Budget Submission calls for greater investment in health and medical research and innovation

Research Australia’s Pre Budget submission to the Treasurer ahead of the 2024 Budget has made the case for increased investment in Australian health and medical research and innovation to support a healthier and more prosperous Australia.

The Australian Government’s investment in R&D is below the OECD average.

There is an additional $323 million approved for release from the MRFF in 2024-25 that the Government is not investing in medical research and innovation.

The Universities Accord process provides the ideal opportunity to increase the investment in the NHMRC, ARC and indirect research costs.

We have advocated for a greater role for the Australian Centre for Disease Control, for the greater use of Government procurement to support Australian innovation, and for the full development of the National HMR strategy and workforce strategy.

Read Research Australia’s submission here.

 

The future of National Digital Research Infrastructure

As part of development of the new NCRIS Investment Plan, the Department of Education is developing a National Digital Research Infrastructure Strategy.

The Strategy aims to provide a vision and strategic direction to steer the National Collaborative Research Infrastructure Strategy (NCRIS) response to major challenges facing Australia’s NDRI system and guide Government investment and decision making.

Research Australia’s submission to the Consultation has proposed a definition of ‘digital research infrastructure’ and a vision that better reflects the expected outcomes if the Strategy is successful. We also emphasised the need to consider and prepare for the increasing complexity of data as well as increased volumes of data.

Research Australia’s submission is available here.

Budget 2023 Update

Summary

Treasurer Jim Chalmers’ mini Budget in October last year implemented some of the new Government’s election promises and cut some former Government’s programs. Tonight, the Government has delivered its first full Budget, setting the agenda and responding to the ongoing pressures of high inflation, a Medicare system in need of reform, a housing crisis and the need to decarbonise and diversify our economy.

The surprise Budget surplus for this year has been delivered, in part, by higher than expected commodity prices. Commodity prices are expected to fall in the future, and the Government has committed to diversifying our economy with more high value advanced manufacturing, including medical products. While some progress is made in this Budget, there is still more that can and must be done.

The rising cost of living has continued to be a key political issue. In the March 2022 Budget, the CPI was forecast to be 3.0% for 2022-23. The Budget tonight expects inflation to have peaked, at around 7% p.a. and to fall to 3.25% over 2023-24. Inflation increases the cost of undertaking health and medical research and innovation. Government funding for research has failed to keep pace with inflation over successive Budgets. This Budget delivers some relief with real increases in funding for ARC programs, while the NHMRC’s MREA is forecast to keep up with inflation.

Please read on for our summary of what this Budget means for health and medical research and innovation.

Health Portfolio

Improved digital health systems

The Budget includes a $951.2 million over 4 years investment in digital health technologies to build a more efficient, connected and collaborative healthcare system. This includes:

    • $325.7 million, to make the Australian Digital Health Agency an ongoing entity, so that it can continue to deliver important digital health infrastructure, including upgrading My Health Record. Only one in 10 medical specialists currently use My Health Record and only one in five diagnostic imaging reports are uploaded. We continue to await further information on a Framework for secondary use of My Health Record data for research purposes.
    • $429 million to ensure that My Health Record is easier to use, is compatible with the information and billing systems that health practitioners are already using, and connects the health system so that patients can access and securely share their health data.
    • $126 Million to renew the Intergovernmental Agreement on National Digital Health for 4 years to progress the secure, safe and efficient sharing of information across the health system.

Australia’s first National Clinical Quality Registry Program receives $40 million over 4 years. Nominated areas are dementia, cystic fibrosis, and pelvic floor disorders. This is good news, reversing several years of delays; registries are a vital bridge between healthcare and research.

Australian Centre for Disease Control (ACDC)
The Government is fulfilling its election promise to create the ACDC, backing up the $3.2 million allocated in the October Budget for preparatory work with $91.1 million to establish an ‘interim’ Australian Centre for Disease Control in the Department of Health and Aged Care and replenish the National Medical Stockpile.


Other announcements include

  • $260m invested in a new national lung cancer screening program, with at risk Australians able to get a lung scan every two years, as recommended by the independent Medical Services Advisory Committee.
  • The Therapeutic Goods Administration (TGA) will receive $61 million over 4 years for a range of activities aimed at protecting public health) including continued assistance to small and medium enterprises particularly those developing emerging technologies.
  • $26.3 million over 4 years to support equity in the healthcare system and improve the health of Australian women and girls), including through the Australian Longitudinal Study on Women’s Health and Australian Institute of Health and Welfare National Maternity Data development project.
  • $900,000 to develop a 10 Year National Action Plan for the Health and Wellbeing of LGBTIQA+ people, and to establish an LGBTIQA+ Health Advisory Group.

Consistent with Research Australia’s sustained advocacy on this issue, this Budget sees the Government’s funding to the NHMRC’s Medical Research Endowment Account appear to just keep up with projected inflation, but with an unexplained decline in funding in the last year of the forward estimates. The MRFF funding meanwhile is static at $650 million per annum, meaning it fails to keep up with inflation and is declining in real terms.

 

Medical Research Future Fund

The funding available from the MRFF each year is dependent on the investment return on its capital. For 2023-24 the Future Fund Board of Guardians has determined the amount available for grants of financial assistance is $870 million. [1] Despite this, only $650 million has been made available as funding in 2023-24. And this is despite an underspend in 2022-23 of more than $50 million.

$m. 22-23 23-24 24-25 25-26 26-27
Funding from MRFF 2023 Budget   598.0 650.0 650.0 650.0 650.0
Funding from MRFF 2022 Budget (OCT) 650.0 650.0 650.0 650.0
Funding from MRFF 2022 Budget (MAR) 650.0 650.0 650.0 650.0

There are programs that could be extended or expanded immediately, including support for early and mid career researchers and continuation of the highly regarded REDI program. Other programs could be established or piloted relatively easily, including the Clinical Research Fellowships proposed previously by Research Australia.

We will be working with the Government to understand why funding to the MRFF hasn’t been increased in 2023-24 even though more funding is available and what the intentions are for future years.

NHMRC Programs

Funding for the NHMRC’s Medical Research Endowment Account has increased slightly since the October Budget, to $910 million in 2023-24. An increase of around 3.6% over 2022-23, this is about equivalent to forecast inflation. There are similar annual increases in the next two financial years, before a drop of around $12 million in 2026-27. There is no explanation at this stage for the forecast decline. Overall, the MREA is set to at least keep pace with expected inflation over the next few years, an improvement on years of real declines in funding.

$m. 22-23 23-24 24-25 25-26 26-27
Funding to MREA 2023 Budget 877.952 910.652 940.330 962.039 949.747
Funding to MREA 2022 Budget (OCT) 877.952 905.160 922.365 938.095
Funding to MREA 2022 Budget (MAR) 877.952 891.094 905.355 918.985

Revamping Primary Care

This Budget responds to the recommendations of the Strengthening Medicare Taskforce, delivering $6.1 billion to strengthen Medicare through:

    • A $3.5 billion investment to triple bulk billing incentives, for free GP consultations for 11.6 million children under 16, pensioners and other Commonwealth concession card holders; and
    • A $1.5 billion indexation boost to Medicare rebates –the biggest increase in 30 years.

Additionally, more than 300 medicines will be cheaper for 6 million Australians who will be able to buy 2 months’ worth of medicine with a single prescription. Fewer visits to the GP and pharmacy will save patients an estimated $1.6 billion.

MyMedicare ($19.7 million over 4 years) will build a stronger relationship between patients and their primary care teams. It is voluntary and open to anyone, with patients able to register with their preferred practice, GP and care team. MyMedicare will also support access to longer telehealth consultations ($5.9 million over 4 years).

It is interesting to see focused funding for cutting-edge patient clinical services will be funded through Medicare ($118.2 million over 5 years) including:

    • genetic testing for childhood hearing loss
    • genetic testing for haematological malignancies
    • profiling tests to determine a patient’s risk of recurrent breast cancer
    • testing for the diagnosis of mitochondrial disease.

While the Research Australia welcomes the major changes this will make to the delivery of primary care in Australia for the next decade and beyond, there has been no commitment to fund research to guide the design and implementation of these measures, or to support their evaluation. Measures to boost the primary care workforce similarly, do not include support for researchers to generate the evidence for improved primary care.

 

Education Portfolio

Nearly half of all Australian health and medical research is undertaken in the higher education sector, and the Department of Education makes a significant contribution to the funding of this research through several programs, as outlined below.

ARC Programs

The Australian Research Council’s Funding Programs are critical to Australian publicly funded research, including to the life sciences and medical technologies.

Discovery Program

Over the forward estimates in this Budget, funding to the ARC for the Discovery Program increases by 8% in 2023-24 compared to this year, and by an average of 8% per annum in 2024-25 and 4% in 2025-26 and by 3%% in 2026-27. This means the Discovery Program is forecast to increase slightly in real terms (i.e. at a rate higher than inflation).

 

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 511.074 552.390 599.499 629.581 646.895
2022 Budget (OCT) 511.074 551.867 596.388 622.986
2022 Budget (MAR) 511.074 535.915 562.406 585.206

Linkage Program

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 317.251 343.808 373.989 402.784 430.918
2022 Budget (OCT) 319.503 345.731 374.289 400.792
2022 Budget (MAR) 340.820 357.704 375.595 390.950
2021 Budget 329.948 334.109 339.622
2020 Budget 325.240 327.074 N/A
2019 Budget 301.741 N/A N/A

The ARC Linkage Program has been charged with delivering the Industry Fellows component of the University Research Commercialisation Scheme. Accordingly there is a boost to the Linkage Program’s funding in the next financial year of around $26 million compared to 2022-23, and annual increases in subsequent years of 8% to 9% per annum. This means that like the Discovery Program, the Linkage Program is forecast to increase in real terms (i.e. at a rate higher than inflation).

Research Support

In addition to providing funding for the ARC research programs, the Department of Education provides funding to universities to help cover the indirect costs of research.

In the 2020 Budget, the Government used the Research Support Program to provide a vital one off injection of $1 billion into higher education research in that financial year, with funding in subsequent years reverting to normal’.  The 2023-24 Budget provides increases of around 5% per annum in the Research Support Program from 2023-24, meaning that funding for this program also increases slightly in real terms if inflation is as predicted.

Research Support Program

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 951.188 1005.282 1064.389 1101.524 1131.792
2022 Budget (OCT) 951.188 1004.314 1058.779 1089.934
2022 Budget (MAR) 951.188 978.674 1,002.668 1,028.230

Funding for the indirect costs of research funded by the MRFF is provided from the Research Support Program. With the MRFF providing hundreds of millions of dollars in funding to universities, a substantial increase in the Research Support Program is needed just to maintain the levels of research support funding for research projects at their current already inadequate level. The issue of indirect research costs remains unresolved for the whole health and medical research sector and indeed publicly funded research more broadly. Research Australia continues to call for a whole of government approach to the issue of funding indirect research costs.

 Research Training

The Research Training Program (RTP) provides funding to universities to support higher degree by research students (mostly PhDs). Funding for the RTP declined in absolute terms between the 2019 and 2020 Budgets, and only partly recovered in the 2022 Budget. Consistent with the October Budget, the latest Budget provides increases of around 6% per year in 2023-24 and 2024-24, before the annual increase drops to around 3%. Inexplicably, funding actually declines slightly in 2026-27, to $1.26 billion.

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 1092.766 1154.911 1222.827 1264.691 1260.070
2022 Budget (OCT) 1092.766 1153.800 1216.372 1251.497
2022 Budget (MAR) 1092.766 1124.344 1151.909 1181.153

Australia’s Economic Accelerator

The Australia’s Economic Accelerator was announced in the March 2022 Budget, but the legislation was only passed earlier this year. This is a $1.6 billion program over 10 years, administered by the Department of Education to overcome the valley of death that currently exists between the point at which public research funding ceases (typically publication) and the point at which commercial investors are prepared to get involved. Unlike ARC programs, the Accelerator is open to application for medical products. The funding for the program reflects the delayed start in 2022-23 with higher funding over the forward estimates in subsequent years.

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 10.172 99.536 163.247 161.646 212.089
2022 Budget (OCT) 10.172 99.444 162.395 159.95
2022 Budget (MAR) 49.160 99.444 149.498 154.601

National Collaborative Research Infrastructure (NCRIS) Program

The NCRIS Program funds vital national research infrastructure needed to support Australian research. The most recent National Research Infrastructure Roadmap nominated synthetic biology, digital research infrastructure, collections (biobanks) and facilities to scale up materials for clinical trials.

This Budget maintains the forecast annual boost to NCRIS of more than $100 million from 2023-24. The new Research Infrastructure Investment Plan should provide more detail about how this funding will be allocated once it is completed; hopefully it will be announced soon.

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 286.043 402.290 503.116 462.850 372.323
2022 Budget (OCT) 286.043 400.028 499.848 458.338
2022 Budget (MAR) 286.043 396.826 496.739 454.441

 

Industry, Innovation and Science Portfolio

National Reconstruction Fund

Fulfilling another election promise, the Government earlier this year passed legislation to create the National Reconstruction Fund (NRF). The NRF will invest $15.0 billion over 7 years from 2023–24 to provide targeted co-investments in seven priority areas: resources; agriculture, forestry and fisheries sectors; transport; medical science; renewables and low emission technologies; defence capability; and enabling capabilities.

The NRF is expected to generate revenue from investments, with estimated receipts of $188.7 million over the forward estimates from the $15 billion of investments in loans, equity investments and guarantees. The returns will be reinvested to ensure the NRF’s sustainability.

CRC Program

The Cooperative Research Centre (CRC) Program is important to health and medical research and innovation, with many of the CRCs funded over the 30 year life of the program being health related. Current CRCs include the Digital Health CRC and the Autism CRC.

The smaller CRC projects program is also relevant, with recently funded projects including the creation of better brain electrodes and development of a bionic medical device that delivers high-fidelity visual-spatial perception for blind people. Funding for the CRC Program is scheduled to increase slightly faster than forecast in the March 2022 and October Budgets, but not quite enough to keeping up with projected inflation.

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 199.374 200.532 208.046 205.199 209.737
2022 Budget (OCT) 199.374 199.962 205.054 201.579
2022 Budget (MAR) 199.374 193.117 197.070 193.540
2021 Budget 197.815 191.042 193.807 N/A

CSIRO

The CSIRO has Flagship Programs relevant to health and medical research and is a key collaborator and partner in research. While it generates much of its own revenue it is also funded by the Government. The Government contribution to the CSIRO outlined in the Budget rises in the next two financial years before dropping back again. There are slight increases on the funding outlined in the October Budget.

$m. 21-22 22-23 23-24 24-25 25-26 26-27
2023 Budget 991.134 1,008.739 934.391 945.155 948.486
2022 Budget (OCT) 949.037 991.134 1.005.563 919.405 931.573
2022 Budget (MAR) 949.037 991.289 985.625 899.352 904.477

New beamlines for Synchrotron

ANSTO’s Australian Synchrotron continues its partner-funded $98 million BR-GHT beamline expansion program, with eight new beamlines being constructed. This will nearly double the Synchrotron’s capacity and allow for broader engagement with researchers and industry in a range of applications, from high-tech manufacturing, including aerospace and transport, to health, including drug development and medical implants.

Entrepreneurs’ Program makes way for Industry Growth Program

The Entrepreneurs’ Program is a long standing funding program to support the commercialisation and development of new innovations. This Budget signals the end of the program, with a slow decline over several years, presumably as existing commitments are concluded.

$m. 22-23 23-24 24-25 25-26 26-27
2023 Budget 126.900 53.384 9.208 2.298 3.008

The Entrepreneurs’ program is being replaced with a new $397 million Industry Growth Program, providing grants of between $50,000 and $5 million to startups. It is focused on the same target areas as the National Reconstruction Fund (NRF), including medical products, and is designed to support new businesses to the point where they are eligible for investment from the NRF.

Conclusion

Research Australia will continue to provide analysis and commentary in the coming days and weeks. We invite your responses and reactions to how the 2023 Budget affects you and your work.

You can share your views with us at our 30-minute budget analysis as part of our NEW – Member Event Series. We will provide a snapshot of Federal budget changes that affect the funding environment for Australian health and medical research and innovation.

 

When:  Thursday 11 May 2023

Time:  12 midday – 12.30pm (AEST)

Platform:  Zoom (details to be supplied after registration.)

If you have not yet registered, please click here.

 

Please contact Greg Mullins, Head of Policy, greg.mullins@researchaustralia.org

 

Ends …..

[1] Australian Government Future Fund, Determination pursuant to section 34(1) of the MRFF Act 2015 Maximum annual distribution for financial year 2023-24, obtained under FOI

Doubling Philanthropy by 2030

The Commonwealth Government has set an ambitious target to double philanthropic giving by 2023 and has asked the Productivity Commission (PC) to advise on how this can be achieved. The PC has launched an Inquiry, and in this first phase it is seeking data on philanthropy and ideas on actions the Government can take to achieve this goal.

Philanthropy plays a critical role in funding health and medical research and innovation in Australia. Research Australia’s submission has provided information about the nature of philanthropy in our sector and the role it plays in complementing other sources of funding. We have drawn on our many years of annual opinion polling to provide information about motivations for donating to research, tax deductions, trends in donations and attitudes to charities partnering with government to jointly fund research.

We have suggested that a more strategic approach by the Australian Government to working with charities could lead to efficiencies and greater effectiveness in the funding of HMR.

Research Australia’s submission is available here.

We will also respond to the second stage of the PC’s Inquiry, later in 2023. If you would like to join our working group on philanthropy, please email Greg Mullins, Head of Policy, at greg.mullins@researchaustralia.org

Research is central to the Universities Accord

Research Australia’s submission to the Universities Accord Discussion paper responds to two key issues. The first relates to the career prospects and professional development of early and mid-career researchers. Research Australia proposes that this be a shared responsibility of research funders, universities, researcher managers and researchers. We also welcome further consideration of programs to support exposure to roles in industry and government during the completion of a higher degree by research.

The second relates to the funding for indirect research costs. We propose a new structure for the future funding of direct and indirect research costs and two distinct principles to guide the structure. We also propose that funding for national research infrastructure be included in these deliberations.

In each proposal we outline the case for how and why these issues should be addressed by an Accord between universities and the Commonwealth Government.

Research Australia’s submission is available here.

Making better use of GP Data and enhancing GP decision making

Most GPs these days use a practice management system (PMS), software which helps capture and manage patient information. Many of these systems also use AI enabled Clinical Decision Support (eCDS) software to support clinical decision making by suggesting possible diagnoses and treatments.

The Australian Government is investigating options for making greater use of data held in PMSs, and also the options for oversight of the quality of eCDS.  Research Australia’s submission has provided examples of the types of research outcomes that can be achieved with GP data, and suggested how research could support the validation of eCDS and confidence in its effectiveness.

Research Australia’s submission is available here.

Making better use of Health Identifiers for research

The Health Identifiers Review is being conducted by the Department of Health, with the objective of increasing the usage of Health Identifiers in the health system. Research Australia is seeking an amendment to the Health Identifiers Act to explicitly permit Health Identifiers to be used when preparing datasets for research purposes.

Research Australia’s response to the consultation is available here.

Research Australia urges Senate to support the National Reconstruction Fund

Research Australia has used its submission to the Senate Economics Legislation Committee Inquiry into the National Reconstruction Fund Bill to urge the Committee to recommend the passage of the Bill, subject to two amendments proposed by Research Australia.

Research Australia believes the National Reconstruction Fund provides the opportunity to better leverage Australia’s world leading health and medical research and create a vibrant and successful medical products industry which propels Australia forward to become a net exporter of medical products.

Doing so would provide significant benefits for Australians with more secure access to medical products, better health outcomes and the creation of well-paying jobs and new businesses in a sector that has enormous scope for ongoing global growth.

The proposed amendments are:

    • require the Ministers to report to the Parliament on how the NRF has complemented other measures by the Government to support research, innovation and manufacturing. (Clause 91)
    • require the quarterly investment reports to identify recipients of financial accommodation by name and to specify the priority area to which the financial accommodation relates. (Clause 82)

Research Australia’s submission is available here.

Research Australia responds to NRF Implementation

Research Australia believes the National Reconstruction Fund (NRF) has a vital role to play in creating a mature and vibrant domestic medical products industry as a cornerstone of a post-carbon Australian economy.

We have made four recommendations in response to the consultation on the implementation of the NRF:

    1. The Ministers should obtain the advice of a future Centre for Disease Control about medical products for which there is a critical unmet need for domestic manufacturing. This should be a consideration in how funds are subsequently allocated by the NRF, although not to the exclusion of the need to generate a return on the investment.
    2. Development of the investment mandate for the priority area of medical products should include identification of areas with the potential for profitable domestic manufacturing. This should be a consideration in how funds are subsequently allocated by the NRF, although not to the exclusion of the need to generate a return on the investment.
    3. The Australian Government should create a National Medical Products Industry Plan to accompany the introduction of the National Reconstruction Fund to make the most of all the Government’s investments throughout the health and medical research and development pipeline.
    4. The Australian Government should develop a medical products research, development and manufacturing workforce plan to determine where the gaps in existing skills are and to address them.

Research Australia’s submission addresses most of the questions posed in the consultation paper. The submission is available here

 

Dementia Action Plan needs new funding for research

The Australian Government’s draft Dementia Action Plan has recognised the importance of more research to improving the lives of those living with dementia, their family and carers but has not proposed any actions that will lead to more research being funded.

Research Australia’s submission has addressed this shortfall, and proposed the draft Dementia Research Strategy draw on the work undertaken by the now defunct NHMRC National Institute for Dementia Research. We have also recommended the proposed Australian Dementia Research Strategy be an ‘Australian Dementia Research, Innovation and Implementation Strategy’ to better meet the Action Plan’s objective of maximising the impact of research and innovation. Accountability for implementation of research outcomes and the funding of this activity needs to be clearly assigned by the Action Plan and the Strategy.

Research Australia’s submission is available here.