Submission to the Federal Budget February 2007

The Need for Certainty of Future Research Funding

Research and Development (R&D) is vital to Australia…

  • The importance of scientific research to the future of Australia is unquestioned, and the development of the nation’s science skills is an essential investment in our economic, social and environmental future.

and has a strong history of Government investment.

  • It is clear that this is recognised by the Australian Government.  Australia’s gross domestic expenditure on R&D in 2002-03 (the most recent figures available) was at an all-time high of $12.84 billion.

Australia needs increasing innovation…

  • However international competitive pressure means that Australia (both private companies and government services) face an ever-escalating need for innovation.

and R&D is innovation’s backbone.

  • R&D – private, government and collaborative – is a key source of idea generation for innovation. As such, it underpins our efforts in innovation and hence our future national well-being.
  • It is often forgotten that R&D also underpins innovation, giving new products and processes their best chance in the market place, by improving our understanding of the products and the manufacturing processes.
  • R&D also provides a training ground that helps familiarise people in new areas, products and processes. It is an indirect but very effective training ground for new scientists and new technology.
  • The related “spillover” effect also should not be forgotten, as the products and innovations find themselves migrating into other industries, feeding into other novel applications and additional developments while fostering employment opportunities and job creation.

CRCs lead the way.

  • A leading example of the Government’s commitment to R&D and innovation is the Cooperative Research Centres (CRC) Programme.  The CRC Programme was established in 1990 to strengthen collaborative research links between industry, research organisations, educational institutions and relevant government agencies, and to better promote the uptake and use of research while facilitating student’s entry into higher education.  Today, 56 CRCs are established throughout the country and form the hub of research in Australia across a broad range of sciences, technologies and industries.

with strong investment…

  • Since the commencement of the CRC Programme, all parties have committed more than $11 billion (cash and in-kind) to CRCs. This includes $2.6 billion from the Australian Government, $2.8 billion from universities, over $2 billion from industry, $1.2 billion from State Governments, $1.1 billion from CSIRO and almost $0.5 billion from other Australian Government agencies. (source : DEST website : – “About the Programme”)

and excellent returns to the Nation.

  • A 2006 study showed that the return to Gross Domestic Product (GDP) for each dollar invested in the CRC Programme is $2.16 (a return of more that 2:1) and as a result of the research, training and commercialisation activities of the CRCs, Australian GDP has been increased by nearly $2.7 billion (conservative estimate).

Yet the future of the Government funding of the CRC Programme is unclear.

  • New CRCs are established through bi-annual (and extremely competitive) bidding rounds where prospective consortiums pitch their plan to the CRC Committee for approval.  The Committee then makes recommendations to the Minister for Education, Science and Training and Government funds are sourced from the CRC Programme budget within DEST.  Since 2001 these funds have been “topped up” with allocations from the Government’s “Backing Australia’s Ability” initiative.
  • While funding is committed for the next CRC bid round (2008), there is no funding allocation beyond that time.
  • Long-term funding is critical to the future planning of the CRC Programme.  It is also vital in order that industry will be attracted to investment into a Programme that will exist “for the long run.”

On behalf of our members, the CRC Association requests that the Australian Government signifies its ongoing commitment to R&D and innovation in Australia through the 2007 Federal Budget, and in particular, clarifies its future funding arrangements for the CRC Programme beyond the 2008 bid round.

What has been the level of funding to date?

The following graph illustrates the budget allocation from the DEST portfolio into the CRC Programme since 1997 and highlights the impact of the “Backing Australia’s Ability” initiative which will, over its 10 year lifespan, inject an extra $354.5M into the CRC Programme.

The CRC Association is concerned about the future funding of the CRC Programme once the “Backing Australia’s Ability” initiative reaches its scheduled conclusion.  The trend above suggests the budget is likely to revert to the pre-Backing Australia’s Ability level (around $150M) which would be significantly less in real terms than in the late 1990’s.

What is required?

The CRC Association’s position is that the CRC Programme should be funded to award at least fifteen to twenty grants per bi-annual funding round with each grant carrying an average value of at least $40 million in current dollar terms.

In 2006 (Round 10) there were 30 applications, 14 of which were invited to pitch their case at interview.  9 were approved and funded to an average value of $32 million.  Only 2 of these were entirely new CRCs.

A commitment to the level recommended above will provide a strong incentive for Universities, CSIRO and industry to continue to engage in the CRC Programme and, by directing additional resources into highly outcomes-focused research, will also help deliver an even greater return for Australia on such resources.