Australia's current spending on science research and development

Parliament house flag post

Australia's current spending on science research and development

Posted 10/11/2011 by Alan Payne

 The awarding of the 2011 Nobel Prize for Physics to Professor Brian Schmidt, an Australian National University (ANU) professor of Astrophysics, for his role in the discovery that the universe is expanding at an accelerating rate, is a significant achievement not only for ANU but also for Australia. It is the first time in almost one hundred years that an Australian has won a Nobel Prize in Physics – William and Lawrence Bragg, a father and son team, were the last Australians to win a Nobel Prize for Physics in 1915 – and it is the sixth Nobel Prize to be won by an ANU researcher.

In light of this great achievement, it is pertinent to ask about the broader state of health of Australian science as measured by its funding. How much goes to science research and development (R&D) and is this level of funding adequate? This article will not address the question of adequacy of the current levels of R&D science funding, but instead examines Australia’s current and past R&D science expenditure, and what sectors of the economy provide the funding.

The total expenditure on all research and development in 2008–09 was approximately $27.7 billion. This includes expenditure from the following sectors: Business, Government (Commonwealth, State and Territory), Higher Education and Private not for Profit Organisations (PNFPO).* The Business sector accounted for 61 per cent of total expenditure. Expenditure on the sciences, which includes Psychology and the Cognitive Sciences but excludes expenditure from PNFPO, accounted for 92.1 per cent of the total. Expenditure in the physical sciences in 2008–09 was approximately 455 million, of which 436 million can be attributed to the public sector (higher education and all levels of government).
 The total expenditure in 2008–09 was distributed to the following types of R&D activities: 
  • Pure basic research ­– $2.5 billion
  • Strategic basic research –$3.4 billion
  • Applied research – $10.6 billion
  • Experimental development –$11.5 billion 
Total expenditure, in real terms, from 1992–93 to 2000–01 remained relatively constant, however, since 2000–01 total expenditure for business and the public sector has increased at an increasing rate. This is clearly shown in Chart 1.
Total expenditure on research and development from 1992 - 2009. Showing a large increase by business and a steady increase by higher education. Total expenditure as a proportion of gross domestic product (GDP) in 2008–09 was 2.21 per cent. When compared to other Organisation of Economic Co-operation and Development (OECD) countries, Australia is below the OECD average, which, in 2008–09 was 2.33 per cent. Despite this, Australia’s contribution as a per cent of GDP grew from 2000–01 to 2008–09 by 0.70 percentage points as opposed to 0.10 percentage points for the OECD average. Australia spent more as a proportion of GDP than the United Kingdom, Canada and France who spent, respectively, 1.77, 1.84 and 2.02 per cent, but less than the United States and Germany (2.77 and 2.64 per cent respectively).
 There has been a significant increase in expenditure on R&D by the Business sector since 2000–01, with the exception of 2009–10 where expenditure decreased, in real terms, by 5 per cent when compared to 2008–09. The increased expenditure was most probably connected to the resources sector boom – Manufacturing and Mining, the largest contributor to total Business sector expenditure, accounted for 51 per cent and 47 per cent of the total Business expenditure in 2008–09 and 2009–10 respectively.** The decrease in Business expenditure in 2009–10 would, in part, be as a consequence of the global financial crisis.
The decrease in total Business expenditure on R&D in 2009–10 was also reflected in the total of Business expenditure as a proportion of GDP. In 2009–10, Business expenditure on R&D represented 1.3 per cent of GDP, down 0.08 per cent when compared to 2008–09. In 2008–09, the Australian Business sector, compared to other OECD countries, spent more on a per GDP basis than the United Kingdom and Canada, 1.10 and 0.99 per cent of GDP respectively, but less than the United States of America, Germany, France and the OECD average, 2.02, 1.86, 1.32 and 1.62 per cent of GDP respectively.
Chart 2 presents the sources of funding for the total expenditures from 1992–93 to 2008–09, in real terms. In 2008–09 Business and All other sectors combined funded $584.4 million worth of R&D that was actually performed by the Commonwealth government. This sum includes higher education funding. Combining higher education and Commonwealth funding is a reasonable assumption because most of the funds for higher education are derived from the Commonwealth. Conversely, all other sectors apart from Business contributed, in 2008–09, $68.3 million to the Business sector.

Source of funding from 1992-2009. Showing a high increase from business followed by the Commonwealth government.Although the level of Commonwealth funding is less than Business funding it is the second largest contributor to total funding and has increased considerably since 2000–01. The increased funding in 2008–09 by the Commonwealth, although not as large as the increase in Business funding – approximately 180 per cent increase between 2000–01 and 2008–09 – represents an overall increase of 71 per cent when compared to 2000–01.
It is very clear that the total expenditure and total funding for R&D is increasing from most sectors of the economy. Although Australia’s expenditure on R&D, as a proportion of GDP, remains below the OECD average, the growth over the last 10 years is closing this gap. Even if these trends do not result in any more Nobel Prizes for Australian researchers, they should go a long way towards helping innovation in science and technology in Australia.

*ABS, 8112.0, Research and experimental development, all sectors, Australia 2008–09
**ABS, 8104.0, Research and experimental development, Businesses, Australia 2008–09

Thank you for your comment. If it does not require moderation, it will appear shortly.
Facebook LinkedIn Twitter Add | Email Print


Flagpost is a blog on current issues of interest to members of the Australian Parliament

Parliamentary Library Logo showing Information Analysis & Advice




refugees asylum immigration Australian foreign policy Parliament climate change elections women social security Indigenous Australians Australian Bureau of Statistics Employment taxation Sport illicit drugs Medicare welfare reform Australian Defence Force welfare policy Asia income management Middle East criminal law disability Australian Sports Anti-Doping Agency World Anti-Doping Agency United States higher education people trafficking school education aid statistics Australian Electoral Commission WADA United Nations federal budget health financing emissions trading gambling Australia in the Asian Century steroids detention Private health insurance OECD ASADA labour force transport Law Enforcement Australian Federal Police Industrial Relations dental health National Disability Insurance Scheme forced labour Senate election results Papua New Guinea Australian Public Service International Women's Day corruption Fair Work Act child protection people smuggling debt federal election 2013 parliamentary procedure ALP New Zealand Australian Crime Commission Newstart Parenting Payment 43rd Parliament slavery by-election political parties Census constitution High Court skilled migration voting Federal Court terrorist groups Afghanistan Higher Education Loan Program HECS youth Aviation environment foreign debt gross debt net debt defence capability customs poker machines doping health crime health risks multiculturalism aged care Gonski Review of Funding for Schooling sex slavery sea farers leadership United Kingdom UK Parliament Electoral reform politics banking firearms public policy mental health China ADRV terrorism social media pensions welfare ASIO intelligence community Australian Security Intelligence Organisation governance public service reform Carbon Pricing Mechanism carbon tax mining military history employer employee fishing paid parental leave European Union same sex relationships international relations coal seam gas planning United Nations Security Council Australian economy food vocational education and training Drugs Indonesia children codes of conduct terrorist financing election timetable citizenship Productivity asylum seekers early childhood education Canada Population Financial sector national security fuel violence against women domestic violence disability employment Tasmania integrity science research and development Australian Secret Intelligence Service sexual abuse federal state relations World Trade Organization Australia accountability housing affordability bulk billing water renewable energy children's health health policy Governor-General US economy export liquefied natural gas foreign bribery question time speaker superannuation family assistance expertise Senators and Members climate Intergovernmental Panel on Climate Change Department of Agriculture Fisheries and Forestry food labelling Pacific Islands reserved seats new psychoactive substances synthetic drugs UNODC carbon markets health reform Indigenous constitutional recognition of local government local government consumer laws PISA royal commission US politics language education Leaders of the Opposition Parliamentary remuneration health system Australia Greens money laundering servitude Special Rapporteur Trafficking Protocol energy forced marriage rural and regional Northern Territory Emergency Response ministries social citizenship China; Economic policy; Southeast Asia; Africa housing Speaker; House of Representatives; Parliament Defence High Court; Indigenous; Indigenous Australians; Native Title ACT Indigenous education Norfolk Island External Territories emissions reduction fund; climate change child care funding refugees immigration asylum procurement Indigenous health e-voting internet voting nsw state elections 44th Parliament 2015 ABS Age Pension Death penalty capital punishment execution Bali nine Bali bombings Trade EU China soft power education Fiji India Disability Support Pension Antarctica Diplomacy by-elections state and territories workers Bills anti-corruption fraud bribery transparency corporate ownership whistleblower G20 economic reform innovation standards NATO Members of Parliament Scottish referendum Middle East; national security; terrorism social services Criminal Code Amendment (Misrepresentation of Age to a Minor) Bill 2013 online grooming sexual assault of minors ACT Assembly public health smoking plain packaging tobacco cigarettes Asia; Japan; international relations Work Health and Safety Migration; asylum seekers; regional processing China; United States; international relations fiscal policy Racial Discrimination Act; social policy; human rights; indigenous Australians Foreign policy Southeast Asia Israel Palestine regional unemployment asylum refugees immigration political finance donations foreign aid Economics efficiency human rights; Racial Discrimination Act employment law bullying Animal law; food copyright Australian Law Reform Commission industry peace keeping contracts workplace policies trade unions same-sex marriage disorderly conduct retirement Parliament House standing orders public housing prime ministers sitting days First speech defence budget submarines Somalia GDP forestry world heritage political engagement leave loading Trade; tariffs; safeguards; Anti-dumping public interest disclosure whistleblowing Productivity Commission regulation limitation period universities Ireland cancer gene patents genetic testing suspension of standing and sessional orders animal health live exports welfare systems infant mortality middle class welfare honorary citizen railways disciplinary tribunals standard of proof World Health Organisation arts international students skilled graduate visas temporary employment visas apologies roads Italy national heritage NHMRC nutrition anti-dumping Constitutional reform referendum Rent Assistance competition policy pharmaceutical benefits scheme obesity evidence law sacrament of confession US presidential election international days baby bonus DFAT UN General Assembly deregulation Regulation Impact Statements administrative law small business Breaker Morant homelessness regional engagement social determinants of health abortion Youth Allowance Members suspension citizen engagement policymaking federal election 2010 workplace health and safety Trafficking in Persons Report marine reserves hearing TAFE Victoria astronomy resources sector YMCA youth parliament alcohol Korea rebate Australian Greens presidential nomination Racial Discrimination Act entitlements political parties preselection solar hot water Financial Action Taskforce Horn of Africa peacekeeping piracy Great Barrier Reef Stronger futures political financing Hung Parliament political education social inclusion Social Inclusion Board maritime early childhood National Quality Framework for Early Childhood Education and Care Murray-Darling Basin Iran sanctions

Show all
Show less
Back to top