2022/23 BUDGET UPDATE- 25 October 2022

Summary

Treasurer Jim Chalmers has used his first Budget to implement some of the new Government’s election promises and make cuts to the former Government’s programs. This is a ‘mini budget’, which sets the scene for Labor’s first full Budget in April or May next year.

As such, there were no significant changes to funding for the ARC or the NHMRC research funding programs in the next two years, with modest increases across a range of funding programs in the following two years . It seems that any major increases in funding health and medical research will have to wait until the Budget situation improves.

The rising cost of living has continued to be a key political issue. In the March Budget, the CPI was forecast to be 3.0% for 2022-23 and 2.75% in 2023-24. In tonight’s Budget inflation for this year is expected to be 7.75% for 2022-323 and 3.5% in the next financial year. Rising inflation also affects health and medical research, making the cost of undertaking research higher. As noted above, the Government has once again failed to address this issue, with increases in funding for the NHMRC and ARC announced in the March Budget and maintained tonight failing to even keep pace with inflation.

Revamping Primary Care

The Treasurer has announced a $2.9 billion package to drive an innovative revamp of Australia’s primary health care system including $100 million to co-develop and pilot innovative models with states and territories to improve care pathways and inform program roll out. The new models of care will make it easier for Australians to see a healthcare professional when they have an urgent, but not life- threatening, need for care.

Comprehensive Cancer Centres

In a win for research-active healthcare, the Government has announced tonight $375.0 million over 6 years from 2022–23 to contribute to the establishment of the Queensland Cancer Centre in Brisbane. The centre will be owned and operated by the Queensland Government and will be located within the Herston Health Precinct at the Royal Brisbane and Women’s Hospital.

There is also $77.0 million over 5 years from 2022–23 to contribute to the establishment of the Bragg Comprehensive Cancer Centre in Adelaide. The centre is an extension of the Australian Bragg Centre for Proton Therapy and Research at the South Australian Health and Medical Research Institute. 

National Centre for Disease Control
The Government is fulfilling its election promise to create a National Centre for Disease Control, with $3.2 million allocated over the forward estimates in preparatory work.

National Health Sustainability and Climate Unit
In a sign of changing health priorities, a $3.4 million investment in the Budget will establish a National Health Sustainability and Climate Unit and develop Australia’s first National Health and Climate Strategy.

 

National Reconstruction Fund
The National Reconstruction Fund is a $15 billion election promise which includes $1.5 billion for medical products over seven years. In tonight’s budget the Government has confirmed this Fund is central to its plan to invest in a stronger economy, delivering better jobs

Other announcements that affect health and medical research and innovation include:

    • $39.0 million over 4 years from 2022–23 to increase the number and consistency of conditions screened through the newborn bloodspot screening
    • The new investment of $3 billion to deliver better aged care includes $23.1m for research and consultation for reforms to in-home aged care.

There are big spending announcements in areas as diverse as Defence and infrastructure. While not on the same scale, there is some good news for STEM, including:

    • $13.5 million over 4 years from 2022–23 to strengthen coordinated policy capability
      to identify, assess and support Australian development of critical and emerging
      technologies, an issue Research Australia has been tracking for some years now.
    • $10.3 million over 6 years from 2022–23 for Australia to host the International Science
      Council’s Regional Presence for Asia and the Pacific and to deepen Australia’s science
      engagement in the region.
    • $5.8 million over 5 years from 2022–23 to support women in science, technology,
      engineering and maths (STEM) through the Women in STEM and Entrepreneurship
      program and to undertake an independent review of existing STEM programs.
    • $4.8 million over 4 years from 2022–23 to develop Australian quantum technology
      through sponsoring up to 20 PhD research scholarships and encouraging collaboration
      on quantum research across Australian universities. This cost will be partially met from
      within the existing funding for the Department of Defence’s Next Generation
      Technologies Fund.

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

Health Portfolio

In Research Australia’s Pre- Budget Submission and our Pre-Election Statement we continued to call for increases in funding for the NHMRC’s Medical Research Endowment Account. This Budget sees the Government’s funding to the MREA continue to decline in real terms. This is of genuine concern to the health and medical research community; it jeopardises our long term research capability and increases the precariousness of research careers, especially for early and mid career researchers.

Addressing these and other issues are at the centre of Research Australia’s advocacy for a truly national health and medical research and innovation strategy, We are working with Commonwealth, State and Territory Governments to make this vision a reality.

Medical Research Future Fund

The amount of funding available from the MRFF is predicted by the Budget to be $650 million per annum over the next four years. This is unchanged from the March Budget

The funding available from the MRFF each year is dependent on the investment return on its capital. Investment returns for the MRFF were adversely affected by the COVID driven economic downturn. The previous Government has committed the MRFF to providing funding of $650 million of the next few years, regardless of the actual investment returns on the MRFF’s capital. The Albanese Government has honoured this commitment for 2022/23, requiring it to provide an additional $62 million from consolidated revenue to meet this target. (Only $598 million has been released by the Future Fund Guardians to fund MRFF commitments this year.)

NHMRC 

Funding for the NHMRC’s MREA remains unchanged from the March Budget for 2022-23 and 2023-24, but is higher in the last two years of the forward estimates. Funding for the NHMRC’s programs is continuing to grow very slightly. The increase in this financial year is 1.7%, and around 1.5% in the following year before over the forward estimates. This is lower than the forecast CPI of 7.75% for 2022-23 and CPI of 3.5% in 2023-24. It also comes on top of CPI of 4.25% in 2021-22. In effect, NHMRC funding continues to decline in real terms in the next couple of years, as it has done for many years now.

$m. 21-22 22-23 23-24 24-25 25-26
Funding to MREA

2022 Budget (OCT)

875.751 877.952 905.160 922.365 938.095
Funding to MREA

2022 Budget (MAR)

863.266 877.952 891.094 905.355 918.985
Funding to MREA

2021 Budget

863.266 875.362 887.588 899.124 N/A

Australian Centre for Disease Control

Fulfilling an election promise, the Government will provide $3.2 million in 2022–23 to undertake the initial design for the establishment of an Australian Centre for Disease Control. The design work will incorporate stakeholder consultations to ensure the new Centre will support improved pandemic preparedness and response, as well as the prevention of chronic disease. There is no detail about where the Centre will be located or potential partners.

Comprehensive Cancer Centres

The Government will provide $452.0 million over 6 years from 2022–23 to support the establishment of world class cancer centres in Brisbane and Adelaide. The centres will provide multi-disciplinary cancer care, research and clinical trials for all types of cancers.

Centre of Excellence in Disability Health

The Government will provide $15.9 million over 4 years from 2022–23 (and $6.6 million per year ongoing) to establish and support a National Centre of Excellence in Intellectual Disability Health (the National Centre of Excellence). Partial funding has already been provided for, with only some of this funding a new commitment.

The National Centre of Excellence will deliver a central hub of expertise, resources and research on the health care of people with intellectual disability and provide leadership in meeting the needs of people with intellectual disability.

 

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 is slightly higher than the March Budget from 2023-24. The funding to the ARC for the Discovery Program increases by 0.8% compared to 2021/22, and by an average of 8% per annum over the next two years and 4% in 2025-26. This means that for the first time in many years the Discovery Program is forecast to increase slightly in real terms (i.e. at a rate higher than inflation).

$m. 21-22 22-23 23-24 24-25 25-26
2022 Budget (OCT) 506.735 511.074 551.867 596.388 622.986
2022 Budget (MAR) 489.188 511.074 535.915 562.406 585.206
2021 Budget 489.188 494.922 501.162 509.432
2020 Budget 487.016 487.860 490.610
2019 Budget 525.537 538.350 N/A

Linkage

The ARC Linkage Program had been singled out by the previous Government as an important component of Australia’s innovation system and delivering the Industry Fellows component of the University Research Commercialisation Scheme. Accordingly there is a boost to the Linkage Program’s funding in this Budget of around $11 million per annum compared to what was allocated last year. This is not enough to enable the Linkage program to fund 800 new Industry Fellowships over 10 years announced in February and keep up with inflation.

Linkage Program

$m.  21-22  22-23  23-24  24-25  25-26 
2022 Budget (OCT)  292.543  319.503  345.731  374.289  400.792 
2022 Budget (MAR)  325.454  340.820  357.704  375.595  390.950 
2021 Budget  325.454  329.948  334.109  339.622   
2020 Budget  323.871  325.240  327.074  N/A   
2019 Budget  295.246  301.741  N/A  N/A   

 

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 injection of $1 billion into higher education research in the current financial year.  No further injection was provided in last year’s Budget and funding in the March Budget for 2022-23 was actually lower than was forecast in the 2019 Budget. The October Budget provides increases of around 5% per annum in the Research Support Program from 2023-24.

 

$m.  20-21  21-22  22-23  23-24  24-25  25-26 
2022 Budget (OCT)    930.659  951.188  1004.314  1058.779  1089.934 
2022 Budget (MAR)    930.659  951.188  978.674  1,002.668  1,028.230 
2021 Budget  1918.298  930.659  942.775  958.326  974.143   
2020 Budget  1918.298  926.490  929.270  938.107  N/A   
2019 Budget  920.573  941.748  962.455  N/A  N/A   
2018 Budget  1018.879  1042.302  N/A  N/A  N/A   

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 also declined in absolute terms between the 2019 and 2020 Budgets, and has only partly recovered in the 2022 Budget. The October Budget provides increases of around $50 million per year from 2023-24.

 

$m. 20-21 21-22 22-23 23-24 24-25 25-26
2022 Budget (OCT) 1069.181 1092.766 1153.800 1216.372 1251.497
2022 Budget

(MAR)

1069.182 1092.766 1124.344 1151.909 1181.153
2021 Budget 1054.981 1069.182 1083.160 1100.967 1119.137
2020 Budget 1054.981 1064.392 1067.585 1077.738 N/A
2019 Budget 1057.595 1081.921 1105.710 N/A N/A

Australia’s Economic Accelerator

The Australia’s Economic Accelerator was a new program announced in the March Budget which was not implemented before the election. The Albanese Government has given a commitment to fund it. 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. The funding in the October Budget indicates less finding this year, accounting for delays in starting the program, with slightly higher funding over the forward estimates in subsequent years.

$m. 22-23 23-24 24-25 25-26
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 2021 National Research Infrastructure Roadmap informs the 2022 Research Infrastructure Investment Plan. Areas of interest to HMR that have been nominated for the New NCRIS roadmap include synthetic biology, digital research infrastructure, collections (biobanks) and facilities to scale up materials for clinical trials.

This Budget maintains the forecast $100 million boost to NCRIS from 2023-24 and slightly more funding each following year than was forecast in March. The 2022 Research Infrastructure Investment Plan should provide more detail about how this funding will be allocated once it is completed, hopefully later this year.

$m. 21-22 22-23 23-24 24-25 25-26
2022 Budget (OCT) 273.567 286.043 400.028 499.848 458.338
2022 Budget (MAR) 273.567 286.043 396.826 496.739 454.441
2021 Budget 273.565 283.922 391.092 491.265

Start Up Year

Fulfilling an election promise, the Government will provide $15.4 million over 4 years from 2022–23 (and $2.8 million per year ongoing) to establish the Startup Year program to deliver income contingent Higher Education Loan Program loans to up to 2,000 recent graduates, postgraduate and final year undergraduate students per year. The Startup Year will support students’ participation in a one-year, business-focused accelerator program at an Australian higher education provider, which will encourage innovation and support Australia’s startup community.

Industry, Innovation and Science Portfolio

National Reconstruction Fund

Fulfilling another election promise, the Government will invest $15.0 billion over 7 years from 2023–24 to establish the National Reconstruction Fund (NRF) to provide targeted co-investments in 7 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 policy and legislation design to follow public consultation.

$50 million over two years from 2022–23 has been allocated to the Department of Industry, Science and Resources, and the Department of Finance to establish the NRF.

Supporting Australian Science

The Government will provide $47.2 million over 6 years from 2022–23 to support the development of talent and leadership in Australian science and technology. Funding includes:

    • $13.5 million over 4 years from 2022–23 to strengthen coordinated policy capability to identify, assess and support Australian development of critical and emerging technologies
    • $10.3 million over 6 years from 2022–23 for Australia to host the International Science Council’s Regional Presence for Asia and the Pacific and to deepen Australia’s science engagement in the region
    • $10.0 million over 3 years from 2022–23 to continue delivery of Questacon outreach programs to engage young Australians and science teachers in science, technology, engineering and mathematics, including through touring exhibitions for regional, rural and remote communities
    • $5.8 million over 5 years from 2022–23 to support women in science, technology, engineering and maths (STEM) through the Women in STEM and Entrepreneurship program and to undertake an independent review of existing STEM programs
    • $4.8 million over 4 years from 2022–23 to develop Australian quantum technology through sponsoring up to 20 PhD research scholarships and encouraging collaboration on quantum research across Australian universities. This cost will be partially met from within the existing funding for the Department of Defence’s Next Generation Technologies Fund
    • $2.9 million in 2022–23 to improve the Prime Minister’s National Science and Technology Council’s provision of science and technology advice and continue support of the Prime Minister’s Prizes for Science event.

 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 2021 and March 2022 Budget papers.

$m. 20-21 21-22 22-23 23-24 24-25 25-26
2022 Budget (OCT) 187.343

 

199.374

 

199.962

 

205.054

 

201.579
2022 Budget (MAR) 189.395 199.374 193.117 197.070 193.540
2021 Budget 222.777 189.980 197.815 191.042 193.807 N/A

Modern Manufacturing Initiative

The Modern Manufacturing Initiative was a major announcement in the 2020 Budget and part of the previous Government’s response to COVID-19. The program is being curtailed, with the Government reversing uncommitted funding in the Modern Manufacturing Initiative and not proceeding with a third round of the Manufacturing Modernisation Fund. The saving is $303.7 million over three years.

CSIRO

The CSIRO has Flagship Programs relevant to heath 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.

 

$m. 21-22 22-23 23-24 24-25 25-26
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

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 second 2022 Budget affects you and your work.

For further information or questions, please contact Greg Mullins, Head of Policy, greg.mullins@researchaustralia.org

 

Ends …..

Research Australia’s Pre Budget Submission September 2022

Research Australia’s submission ahead of the Alabnese Government’s first Budget, to be handed down in October, acknowledges the large debt the Government is faced with. In keeping with the Government’s objective to fund activities that will boost productivity, we have outlined how investing in health and medical research can help grow Australia’s economy and provide well paid jobs, now and for future generations.

We have reiterated the need for a National Health and Medical Research Strategy and for a research workforce plan to support this objective.

Research Australia’s submission is available here.

Changes to RBG formula opposed by Research Australia

Research Australia has opposed the Government’s proposal to alter the formulae for calculating Research Block grants to universities as a means of incentivising greater engagement with business. Research Block grants consist of two programs provided by the Department of Education. The Research Support Program provides funding to universities relative to the research revenue they receive from different sources: government, business, not for profits etc. The Research Training Program funds the stipends and research costs of students undertaking Masters Degrees by research and PhDs.

The Government has proposed increasing the proportion of funding tied to business research revenue and reducing the proportion of funding tied to other research revenue.

Research Australia has opposed this measure because the most recent data shows that business funded research increased by 15.5% between 2018 and 2020, and basic research (usually funded by governments and universities themselves declined by 11.3% over the same period. Research Australia is concerned that simply changing the formulae rather than providing more block grant funding will further reduce basic research at a time when business research funding is already increasing.

Read Research Australia’s submission here.

Budget Update 2021

Summary

The economic impact of COVID-19 continues to dominate the Australian Budget, with tonight’s Budget, the second handed down in just seven months. Like the last one, this is a big spending Budget, but the focus has shifted from providing immediate stimulus to longer term recovery and Australia’s future prosperity. In the health sector, policy reform is focused on aged care and mental health.

Apart from COVID, the biggest health issue the Australian Government has had to grapple with in the last 12 months is aged care. The Royal Commission into Aged Care Quality and Safety provided the Government with 148 recommendations earlier this year. Until tonight, the Government had not provided a substantial response to the report.

This Budget outlines an additional $17.7 billion over five years, seeking to address the needs of aged Australians living at home and those in residential care. This equates to around half of what is called for overall in the Royal Commission’s Final Report. The Prime Minister’s press release states the Government has accepted 126 of the 148 recommendations, we are awaiting the Government’s detailed response to the Royal Commission – particularly the recommendations for dedicated funding for aged care and ageing research. The proposals from the Royal Commissioners in relation to funding for innovation and research have not been funded in this Budget.

Mental Health has also been under the spotlight, including the impact of COVID-19 on mental health. The Productivity Commission provided the Government with a report last year on what could be done to improve mental health, and earlier this year the Department of Health and Ageing consulted on what measures from the report should be implemented, and when.

Tonight’s budget provides $2.3 billion over four years from 2021-22 for the National Mental Health and Suicide Prevention Plan, including initiatives to be progressed with states and territories for a new national agreement on mental health and suicide prevention. The Government has indicated that it has accepted all the recommendations of the Productivity Commission Report on Mental Health and that the funding announced tonight is only phase one of its response. The only research specific funding announced as part of this package is establishment of an Eating Disorders Research Centre as part of a $26 million package of funding for eating disorders. Further funding for research-related aspects of the Productivity Commission’s recommendations may follow in future budgets. There is $117.2 million for data collection, in part to establish the evidence base for reforms. We will be seeking the advice of key mental health research experts to understand how this data can inform continuous, evidence-based improvement in mental health care for Australians.

While Preventative Health has gained attention from the Government in the last couple of years, the National Preventive Health Strategy is still very much a work in progress and there is only very limited additional funding for preventive health in tonight’s Budget. There is $1.9 million in 2021-22 for preventive health research and scoping activities, including a national health literacy strategy, to inform the National Preventive Health Strategy. Research Australia has previously advocated the need to improve health literacy (and digital health literacy) as a key measure to address health inequity and enable all Australians to better use technology to manage their health.

One of the key lessons from the COVID-19 pandemic is that we have become overly reliant on global supply chains for vital materials. This drove a new focus in last year’s Budget on manufacturing, with the announcement of $1.3 billion over five years from 2020-21 for the Modern Manufacturing Initiative. While the Government seems satisfied this is enough, Research Australia believes more needs to be done, and has proposed raising annual Government spending on R&D to 0.75% of GDP, setting a target for Australia to become a net exporter of pharmaceuticals by 2035, and using the Government’s influence as a key buyer of products and services to boost Australian innovation.

A key measure in this regard is a patent box; a tax deduction provided to companies that manufacture in Australia using Australian developed IP (patents). The patent box will only apply to income derived from Australian medical and biotechnology patents, with consideration to be given to the clean energy sector. It provides a concessional effective corporate tax rate of 17 per cent, with the concession applying from income years starting on or after 1 July 2022. Such a scheme has operated in the UK for many years and is designed to support high value manufacturing in Australia, complementing the R&D Tax Incentive. Research Australia has been a long-term advocate of patent box tax treatment, along with CSL and others in our sector, and this is a significant win for health and medical research.

Much has been said recently about mRNA manufacture of vaccines and therapeutics, with the Victorian and NSW Governments both announcing support and Victoria proposing to invest $50 million. In the Budget tonight the Government has announced that it, too, is acting. It will provide an undisclosed amount of funding (commercially sensitive) to the Department of Industry, Science, Energy and Resources to work with the Department of Health to develop an onshore mRNA vaccine manufacturing capability in Australia. Research Australia called for  such a commitment from the Government in our Pre-Budget Submission and we have been calling for this facility privately and publicly, to encourage this sovereign capability .

While the MRFF funding proceeds as outlined in the Government’s MRFF 10 year Plan, the funding to the NHMRC’s Medical Research Endowment Account continues to decline in real terms.

Medical Research Future Fund

Funding from the MRFF

The MRFF reached the target of $20 billion of capital in August 2020. Tonight’s Budget sees this balance maintained over the forward estimates.

Forecast spending from the MRFF remains largely as expected over the forward estimates. While only $455 million is available from the MRFF to fund research and innovation in 2021/22 due to lower-than-expected investment returns, the Government is maintaining spending this financial year by providing an additional $175 million for MRFF funding from consolidated revenue (announced in the December 2020 mid-year budget). At this stage the Government expects the investment returns to recover this financial year, with $650 million available to fund medical research and innovation in 2022/23.

MRFF expenditure

$m. 20-21 21-22 22-23 23-24 24-25
MRFF Funding 2021 Budget 579.9 455.0 650.0 650.0 650.0

NHMRC and ARC Funding

In Research Australia’s Pre- Budget Submission and our Pre-Election Statement we continue to call for increases in funding for the NHMRC and ARC’s research programs. This Budget sees both schemes continue to decline in real terms, which is of genuine concern to the health and medical research community.

NHMRC Programs

The 2021/22 Budget reveals funding for the NHMRC’s programs continuing to grow very slightly, and only slightly faster than was forecast in last year’s budget. The increase in this financial year is 1,1%, with annual increases of around 1% thereafter. This is lower than the forecast CPI of 3.5%% for 2020-21 and CPI of between 1.75% and 2.5% expected in subsequent years. In effect, NHMRC funding continues to decline in real terms, as it has done for many years now. Research Australia remains concerned about this deficit because research and its outcomes is a long-term commitment.

NHMRC MREA Funding

$m. 20-21 21-22 22-23 23-24 24-25
Funding to MREA

2021 Budget

853,864 863,266 875,362 887,588 899,124
Funding to MREA

2020 Budget

853,864 862,412 872,770 884,960 N/A

ARC Programs

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

Over the forward estimates, the funding to the ARC for the Discovery Program increases slightly each financial year and while higher than in last year’s Budget, the funding is at significantly lower levels than forecast in the 2019 Budget. In real terms funding to the Discovery Program declines over the forward estimates. Again, a cause for concern.

$m. 20-21 21-22 22-23 23-24 24-25
Discovery 2021 Budget 483,272 489,188 494,922 501,162 509,432
Discovery 2020 Budget 483.272 487.016 487.860 490.610
Discovery 2019 Budget 513.542 525.537 538.350 N/A

The ARC Linkage Program has been singled out by the Government 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.

Funding over the forward estimates is higher than forecast in last year’s budget, but future years fail to keep pace with inflation.

$m. 20-21 21-22 22-23 23-24 24-25
Linkage 2021 Budget 323.166 325.454 329.948 334.109 339.622
Linkage 2020 Budget 322.181 323.871 325.240 327.074 N/A
Linkage 2019 Budget 288.788 295.246 301.741 N/A N/A

 While not funding ‘medical and dental research’, the ARC Linkage program remains important to the health and medical research and innovation sectors.

Research Support

In addition to providing funding for the ARC Linkage Program, the Department of Education and Training also provides funding to universities to help cover the indirect costs of research.

In last year’s Budget, the Government used the Research Support Program to provide a vital injection of $1 billion into higher education research in the current financial year.  No further injection is provided in this year’s Budget and funding in is actually lower than was forecast in the 2019 Budget.

Research Support Program

$m. 20-21 21-22 22-23 23-24 24-25
2021 Budget 1918.298 930.659 942.775 958.326 974.143
2020 Budget 1918.298 926.490 929.270 938.107 N/A
2019 Budget 920.573 941.748 962.455 N/A N/A
2018 Budget 1,018.879 1,042.302 N/A N/A N/A

Funding for the indirect costs of research funded by the MRFF is now provided from the Research Support Program. With the MRFF providing hundreds of millions of dollars in funding to universities over the next few years, beyond this financial year, 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 cuts to the Research Support Program beyond the one-off boost in 2020-21 represent a real and continued threat to the capacity of our universities to undertake vital health and medical research.

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 Australia proposes that the Chief Scientist lead a review of the funding of indirect research costs to establish a sustainable and equitable funding program. In the short term, the pool of funding for the Research Support Program must be increased substantially.

Research Training

The Research Training Program (RTP) provides funding to universities to support higher degree by research students (mostly PhDs). Funding for the RTP also declined in absolute terms between the 2019 and 2020 Budgets, and have only partly recovered in this year’s Budget.

Research Training Program

$m. 20-21 21-22 22-23 23-24 24-25
2021 Budget 1054.981 1069.182 1083.160 1100.967 1119.137
2020 Budget 1054.981 1064.392 1067.585 1077.738 N/A
2019 Budget 1057.595 1081.921 1105.710 N/A N/A

Industry PhDs

The Department of Industry will provide $1.1 million over two years from 2020-21 to create new employment pathways for students and boost financial incentives for universities to enrol students in ‘Industry PhDs’. This measure will introduce an additional weighting in the Research Training Program funding formula for PhD students who undertake an industry placement.

Research Commercialisation

In last year’s Budget the Government committed funding for a scoping study for a University Research Commercialisation Scheme to better translate and commercialise university research outputs. The development of the Scheme is still in train and there is no funding for the Scheme in this year’s Budget. It looks like this might have to wait until next year. Research Australia remains actively engaged in consultation with the Department of Prime Minister and Cabinet on this Scheme.

CRC Program

Funding forecasts for the CRC Program reflect a shift in some funding between 2019-20 and 2020-21. Beyond that, they are slightly lower over the forward estimates.

CRC Program $million

$m. 20-21 21-22 22-23 23-24 24-25
2021 Budget 222,777 189,980 197,815 191,042 193,807
2020 Budget 234,168 189,040 186,378 188,599 N/A
2019 Budget 187,356 192,239 191,223 N/A N/A

The CRC Program is important to health and medical research and innovation with about one third of the CRCs funded over the life of the program being health related.

Conclusion

Research Australia will continue to provide analysis and comment in the coming days and weeks as well as seek further input from across the membership for your reactions and insight into the policy and funding announced for our sector; and how it affects or enhances your research and related activities as a result.

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University Research Commercialisation

The Australian Government is undertaking a scoping study to understand how to best implement a University Research Commercialisation Scheme to better translate and commercialise university research outputs. It has appointed an Expert Panel and issued a Discussion Paper.

Research Australia’s response to the Discussion Paper addresses the role of ‘Missions’, the use of stage-gating and the role of co-funding by Governments, universities and industry. It highlights the critical need to better align existing funding programs and fill the gaps to provide a more seamless approach to research funding from basic research through to commercialisation.

Research Australia’s submission is available here.

2021 Pre Budget submission calls for renewed investment in R&D

Research Australia’s Pre Budget submission to the Treasurer ahead of the 2021 Budget  focuses on the vital role of health and medical research and innovation in Australia’s  response to the COVID-19 pandemic, and the manufacturing and innovation opportunities that health and medical research presents for Australia’s economic recovery.

It calls for renewed investment in R&D by the Australian Government, continued support for universities and medical research institutes with meeting indirect research costs, and measures to support medical products R&D and manufacture. The case for increasing NHMRC and ARC funding is also made. Funding for Government initiatives in data sharing and preventive health are among other measures sought.

Research Australia’s submission is available here.

Improving approval processes for new drugs and medical technologies

Research Australia has responded to the Parliamentary Inquiry into the Approval Processes for New Drugs and Medical Technologies.

Opportunities exist to change our approval processes to benefit patients and better support research and development in Australia. Faster and more effective approval processes mean new medicines and technologies reach patients faster. Improving the environment for clinical trials enables Australian patients to benefit from the latest medicines and technologies developed overseas while also helping Australian health and medical research to flourish in a competitive and lucrative world market. Research Australia’s submission identifies some of these opportunities with the twin objectives of improving Australians’ health and prosperity.

Research Australia’s submission is available here.

The Committee is expected to hold public hearings in early 2021.

Aged Care Research is essential for a better Aged Care system

Research Australia is delighted that research is firmly on the agenda for the Royal Commission into Aged Care Quality and Safety.

The peak body’s Chief Executive Nadia Levin welcomed the news that among the more than 100 recommendations made by counsel to the Commissioners, were several very important recommendations relating to research.

Importantly, Counsel has recommended establishing a dedicated Aged Care Council to set a strategy and agenda for research and development into aged care. A dedicated aged research fund with an annual budget of 1.8% of government expenditure on aged care has also been recommended.

‘This would be a welcome boost to aged care research in Australia and has the potential to lead to better, higher quality and safer care, said Ms Levin. ‘In fact, I don’t think this promise of a better system can be delivered without more research, it is absolutely essential.’

Research Australia has made the case on several occasions for increasing research into aged care and ageing. We urged the inclusion of research in the Commission’s original terms of reference and have liaised with the Commission’s officers to connect them with researchers who were able to assist the Inquiry.

The aim is to prioritise research that involves co-design with older people, their families and the aged care workforce, and to facilitate networks between researchers, industry and government. The scope of research is broad, encompassing technology pilots and innovation projects, and assisting the translation of research into practice to improve aged care.

In a series of related recommendations, data collection across aged care should be improved and a national minimum aged care dataset developed under the auspice of the Australian Institute for Health and Welfare.

The Commissioners are now considering the evidence they have received and are due to provide their final report to the Australian Government by the end of February next year. (They may accept, reject or modify Counsel’s recommendations.) More information about the Royal Commission, including the final submissions, is available here.

Research Australia will continue its advocacy focus along with its members such as NARI, CSIRO, University of Queensland, Flinders University and the University of Wollongong to keep research firmly on the agenda as the Royal Commission considers its response.

Please join our efforts through contributing to Research Australia’s submission due on the 12th November via greg.mullins@researchaustralia.org

 

Budget Update 2020

Summary

The global economic impact of COVID-19 has been the overwhelming influence on the Budget handed down tonight. This is a big spending Budget, the biggest Australia has seen, focused on providing immediate stimulus to the economy but also laying the foundations for a future Australia, shaped by the lessons of the last nine months.

Most relevant to health and medical research are the following key announcements:

    • Last year’s forecast budget spending on health for 2020-21 was $82.5 billion. This forecast has been revised up to $115.5 billion, as we begin to see just how much COVID-19 is driving up healthcare costs. In the coming months and years, Australians will look to health and medical research and innovation to deliver more effective treatments and more efficient pathways of care to curtail these costs. Research Australia will continue to work with Government to ensure support for the crucial role all parts of the health and medical research pipeline have to play in delivering better, more sustainable care.
    • An extra $1 billion this financial year through the Research Support Program for our university researchers will be critical to maintaining Australia’s national health and medical research capability. More than half of all Australian health and medical research in Australia is undertaken in the higher education sector. It is clear that Australia can no longer rely so heavily on international student fees to subsidise research. In the long term, we need to look at effective partnerships between higher education, government, industry and philanthropy. The commitment in this Budget to supporting university research jobs is a welcome interim step towards establishing a more sustainable higher education sector.
    • The Government will restore an additional $2 billion over 4 years through the Research and Development Tax Incentive to help innovative businesses that invest in research and development. It is doing this by reversing some of the changes to the R&DTI legislation that are currently before the Senate.
    • The budgets for the NHMRC and MRFF remain virtually unchanged. At the same time, researchers are dealing with extra costs to their funded project due to the delays and disruptions caused by COVID-19. While the universities benefit from the one-off increase in the Research Support Program, there is no similar support for researchers in Medical Research Institutes. Research Australia remains concerned that NHMRC funding has not increased over the forward estimates to keep pace with inflation, with the net effect that NHMRC funding continues to decline in real terms.

Broader Context:

One of the key lessons from the COVID-19 pandemic is that we have become overly reliant on global supply chains for vital materials. This is driving a new focus on manufacturing and there are new roadmaps being developed which will, hopefully, join the dots between research, product development and manufacturing more successfully than has been done in the past. $1.3 billion over five years from 2020-21 will establish the Modern Manufacturing Initiative to: support manufacturing projects focused on building long-term business collaboration at scale; translating research into commercial outcomes and bringing new products to market; and integrating local firms to deliver products and services into global value chains. New roadmaps to guide the Modern Manufacturing Strategy are due in time for the 2021 Budget, in six months’ time, including for medical products.

Manufacturing accounts for around 6% of Australia’s economic output but is responsible for a quarter of all industry spending on R&D. However, Australia’s business spending on R&D is low by world standards. If Australia is to achieve the objectives of the Modern Manufacturing Strategy this will have to change, and we have to better connect business with Australia’s powerhouses of research, our universities and medical research institutes.

The Government has made several attempts to reform the R&D Tax Incentive in recent years, and tonight’s Budget is no exception. The R&DTI is critical to increasing business expenditure on R&D in Australia, and thus to the Modern Manufacturing Strategy. The Government is reversing several of the measures which are currently sitting before the Senate. For small business, the $4 million cap goes, and the rate is fixed at 18.5% above the company tax rate. For large companies the number of tiers in the intensity threshold will be reduced to two, with the RDTI paid at a rate 8.5% and 18.5% above the company’s tax rate for tiers one and two respectively. This is expected to increase the amount of R&DTI paid to industry by $2 billion over the forward estimates, compared to the amounts that would have been paid if the legislation had been amended in accordance with the Government’s previous plan.

 

Continue reading “Budget Update 2020”

Pre Budget submission calls for renewed investment in R&D (December 2019)

Research Australia’s submission to the Treasurer ahead of the 2020-21 Budget has used the Government’s own figures showing a drop in R&D investment by Government and business to call for a renewed focus on research and development, including health and medical research. In addition to greater investment in R&D across the board, Research Australia has called for increased funding for the research programs of the NHMRC and ARC; action to make better use of data; and investment in prevention.

To read Research Australia’s submission and the full list of recommendations, click here.