Funding health & medical research in Australia
- $5.9 billion is spent on health and medical research (H&MR) in Australia each year
- 18% of all Australian Research and Development (R&D) is spent on H&MR (Total R&D is around $33 billion)
- 8% of all spending on health is spent on H&MR (Total health expenditure in 2013-14 was $154.6 billion)
- 0.37% of GDP was spent on H&MR (Australian GDP in 2013-14 was $1,582 billion)
- More than half of all Australian H&MR is undertaken in the higher education sector
- H&MR accounts for one third of all R&D expenditure in higher education institutions
- 19% of all H&MR expenditure is in the private sector (mostly on pharmaceutical R&D)
Expenditure by sector
The following table is an estimate of where H&MR expenditure occurs in Australia
|Location of expenditure $million
|States & Territories
||Not For Profit
The estimates are complicated because they are:
- based on ABS data and the ABS surveys the different sectors for different periods. Government and NFP data is for 2012/13; Higher Ed is for 2012 and Business is for 2013/14
- the SEO of Health generally provides the most accurate number but the FOR of medical and health sciences is used for Business because most H&MR in industry is classified not under the SEO of health but under the SEO of manufacturing. The ABS data is not provided at sufficient detail to enable health R&D to be extracted from the SEO of manufacturing.
While only a relatively small proportion of H&MR is undertaken directly by the Australian Government it is responsible for providing the funding for a much larger proportion, particularly in higher education and Medical Research Institutes (MRIs). This includes funding provided through the NHMRC and ARC. It also includes funding provided to universities through the block grants system, which is tied to the volume of each university’s research and the number of research students.
Australian Government funding of H&MR through universities and MRIs
|ARC Funding contribution to HMR (10%)
|Infrastructure Block Grants contribution to HMR (34%)
Source: Australian Government Science Research and Innovation Tables 2015-16, Table 4
This estimate does not take into account taxation measures like the R&D Tax Incentive and programmes like the Department of Industry Innovation and Science Entrepreneurs Programme, which support the development and commercialisation of research generally, including new medicines, medical devices and therapies. It also doesn’t reflect other Commonwealth Government support provided to universities and MRIs which are used for new buildings and facilities that support H&MR.
State and Territory Governments
State and territory governments are responsible for funding research undertaken within the State and territory hospital systems; the provision of support to MRIs for the indirect costs of research; and and other programs to support R&D, a portion of which funds HMR. State and territory governments also provide capital funding for stand alone research institutions (eg. the South Australian Health and Medical Research Institute) and for organisations that combine research with health care deliver (eg. the Victorian Comprehensive Cancer Centre).
It is likely that the total support provided to HMR significantly exceeds the $479 million per annum captured in the table above.
The bulk of Australian H&MR is conducted in the Australian higher education sector, and is funded by the Australian Government, philanthropy and universities own funds from other sources, including teaching revenue for the Australian Government and students. Approximately one third (34%) of all research expenditure by the higher education sector is on health and medical research.
Source: ABS 8111.0, Research and Experimental Development, Higher Education Organisations, Australia 2012, SEO Health ($3,270,969,000) divided by total expenditure ($9,609,736,000).
Not for Profit sector
The Not for Profit sector spent $960 million on R&D in 2012/13, of which $824 million (86%) was spent on the SEO of Health. The concentration of research in the non profit sector on H&MR reflects the dominance of this sector by Medical Research Institutes (MRIs); the next highest categories were Education and Training with $56 million and the Environment with $18 million.
Source: ABS 8109, Government and Private Non Profit Organisations, 2012-13 Table 3, PNP expenditure by SEO, 2012-13
Expenditure on health and medical research represents approximately 6% of total R&D spending by business. Much of the R&D expenditure by businesses has an emphasis on the ‘D’ (Development) in R&D rather than research. For this reason it is captured in the broad SEO of Manufacturing rather than Health; the Field of Research (FoR) of Medical and Health Sciences is used in the above table to estimate business expenditure on H&MR.
Source: 8104 Research and Experimental Development, Businesses, Australia, 2013-14 Table 3, FoR Estimate of Business H&MR (Medical & Health Sciences $1,123,956,000) divided by total expenditure ($18,849.438,000)
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Image credit: Professor Len Harrison, Walter and Eliza Hall Institute