Bills Digest No. 53  2000-01 Australian Research Council Bill 2000


Numerical Index | Alphabetical Index

WARNING:
This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

CONTENTS

Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details

Passage History

Australian Research Council Bill 2000

Date Introduced: 7 September 2000

House: House of Representatives

Portfolio: Education, Training and Youth Affairs

Commencement: On Proclamation, or otherwise within 6 months of Royal Assent.

Purpose

To establish the Australian Research Council and to provide for the funding of research programs.

Background

The Australian Research Council

The Australian Research Council ('the ARC' or 'the Council') was established in July 1988 as a subsidiary council of the National Board of Employment, Education and Training (NBEET) under the provisions of the Employment, Education and Training Act 1988. Unlike the NBEET and other councils, which were purely advisory bodies, the ARC, with its specialist role of recommending grants for research projects, retained a direct role in higher education funding processes.

The Coalition Government's 1996 Higher Education Election Policy stated that it would wind up the NBEET, while restructuring the ARC as an independent body. In June 1996 the new Government introduced the Employment, Education and Training Bill 1996 to abolish NBEET but the legislation ultimately lapsed with the Parliament. In March 1999 the Government again introduced legislation to abolish NBEET and its Councils, with the exception of the ARC, stating that its preference was for advice to flow directly to the Minister, rather than being filtered through NBEET. The Employment, Education and Training Amendment Act (No. 10 of 2000) received assent on 15 March 2000.

The Research Policy Statement

In December 1999 the Government released Knowledge and Innovation: A policy statement on research and research training.(1) The main features of this White Paper were:

  • an enhanced role for the Australian Research Council(2)
  • performance based funding for research and research training in universities
  • a new quality verification framework, and
  • a collaborative research program for rural and regional communities.

The White paper was preceded by the discussion paper New Knowledge, New Opportunities (June 1999).(3) It was also informed by several reviews of the Department of Education, Training and Youth Affairs (DETYA) research programs and processes, namely:

  • The Small Grants Scheme Reviewed (August 1997)(4)
  • Funding the Nation's Research Base: An Evaluation of the Australian Research Council Large Grants Scheme (2000)(5)
  • University and Industry Research Partnerships in Australia: An evaluation of ARC/DETYA industry-linked research schemes (1999), and(6)
  • Phase One Report ARC/DEETYA Targeted Research Grants Allocation Processes (October 1997).(7)

The White Paper's proposals with regard to the role and functions of the ARC were as follows:

  • an enhanced role in the provision of strategic advice to Government regarding research in the university sector
  • increased responsibility for the administration of research funding programs for which funds will be appropriated under the new Act
  • a reformed governance and organisation structure reflecting the need to link university research with the innovation system
  • an enhanced capacity to identify and respond to emerging areas of research excellence, and
  • an accountability framework emphasising transparency and performance.

These measures attracted very little comment, with reactions to the White Paper tending to focus on the research training proposals and the level of research expenditure. The Australian Vice-Chancellors' (AVCC) issued a press release stating that 'the debilitating lack of any new funding to maximise the benefits of changes outlined means that implementation of change will not bring the results needed to ensure our research culture is globally competitive.'(8)

ARC Research Funding in Context

The following table presents Australian Bureau of Statistics data for gross expenditure on research and development ('R&D') by sector for selected years.

Gross Expenditure on R&D, 1992-93 to 1997-98

(constant prices)

Sector

1992-93

$m

1994-95

$m

1996-97

$m

1997-98

$m

Business

3247

3845

4438

3992

Commonwealth Government

1299

1298

1313

1193

State Government

752

850

842

879

Higher education

1958

2043

2435

2603

Private non-profit

118

171

183

184

TOTAL

7374

8206

9210

8850

Source: ABS, Research and Experimental Development All Sector Summary Australia 1998-99
(August 2000), p. 3.

Gross expenditure on R&D as a percentage of GDP has fallen from 1.65 per cent in 1996-97 to 1.49 per cent in 1998-99. The ABS notes that Australia's GERD/GDP ratio is low when compared to other OECD countries and that this reflects the low level of expenditure by the business sector.

The business sector recently called on the Government and the community at large to increase levels of funding to R&D - suggesting an 'Olympian effort to stop the slide in research and development spending.'(9) An open letter to the Prime Minister said that increasing tax breaks for research and development would not solve the problem and that an overhaul of Australia's approach to education, research and commercialisation of research was needed.(10) Certainly there would seem to be a general concern over the low levels of research funding, including suggestions that research funding levels could be seen to be effecting the exchange rate.(11) The press reported that Senator Minchin recently responded to some of these concerns by indicating he hoped to double the funding for the ARC over the next five years.(12)

The research programs administered by the ARC comprise a relatively small element of higher education research expenditure. Most higher education research is funded through the general operating expenditure of higher education institutions. The Science and Technology Budget Statement 2000-2001 identifies targeted higher education R&D in 2000-01 as $455.3 million, with other higher education R&D at $1332.3 million. Total Commonwealth support for major programs of science and innovation in 2000-01 is given as $4538 million. The following table provides a breakdown of higher education research grants from 1996 to 2002. Not all of these are administered by the ARC: the major ARC peer-reviewed funding programs include the Large Research Grants, Research Fellowships, SPIRT, Research Centres and Research Infrastructure.

Higher Education Research Grants, 1996-2002
(constant 2000 prices)

Type of Grant

1996 $m

1997 $m

1998 $m

1999 $m

2000 $m

2001 $m

2002 $m

Research Grants (incl. Small and Large Grants)

130.1

134.0

126.7

132.2

133.2

132.3

132.3

Australian Postgraduate Awards

81.7

87.4

77.8

77.5

80.9

81.3

80.9

International Research Exchange

     

1.4

2.6

2.6

2.6

Research Fellowships

28.9

30.2

28.4

27.5

27.4

27.4

27.4

Special Research Centres and Key Centres

19.3

19.4

18.0

20.6

25.1

20.5

20.5

Research Infrastructure

100.5

99.8

123.8

117.0

102.4

104.4

86.0

High-Performance Computing/Communications

6.4

12.6

20.3

       

International Postgrad. Research Scholarships

16.2

16.2

15.1

15.2

16.2

16.2

16.2

Collaborative Research Grants

19.9

27.4

         

Strategic Partnerships with Industry (SPIRT)

   

45.2

51.2

56.8

58.4

58.3

Research Evaluation (a)

0.7

0.7

0.7

0.9

0.7

0.7

0.7

Grants-in-aids to Learned Academies (a)

1.6

1.6

1.6

1.6

1.6

1.6

1.6

Anglo-Australian Telescope Board (a)

3.6

3.6

3.6

3.7

3.7

3.7

3.7

Grant in Aid to ANZAAS (a)

     

0.0

0.0

0.0

0.0

Unallocated/To be allocated funds

2.9

2.8

0.0

 

1.9

4.1

3.6

TOTAL RESEARCH

411.9

435.7

461.1

448.7

452.4

453.2

433.7

Source: AVCC Funding Tables
(a) These programs are not funded under the Higher Education Funding Act 1988, but from annual appropriations on a financial year basis.

ARC Funding

The Bill will provide $244.3 for ARC programs in 2001 (proposed section 49). This can be compared with the current funding levels for targeted research programs given in the table below. The total funding in 1999-2000 for the schemes that will continue to be administered by the ARC was around $233.1 million.

Funding for Targeted Research Programs, 1999-2000

Targeted Research Programs

1999-2000

($ m)

ARC Referred Programs

Large Grants Scheme

102.8

Strategic Partnerships with Industry (SPIRT)

57.2

Research Infrastructure and Facilities Scheme (RIEF)

20.2

Special Research Centres and Key Centres

20.5

Research Fellowships Scheme

27.4

International Researcher Exchange Program

2.6

Other Grants

2.4

TOTAL ARC PROGRAMS

233.1

Programs to be funded through HEFA

Research Infrastructure Block Grants

80.1

Australian Postgraduate Awards

79.2

Small Grants Scheme

28.3

International Postgraduate Research Scholarships

16.2

Source: New Knowledge, New Opportunities A Discussion Paper on Higher
Education Research and Research Training
(June 1999).

Matters of Interest

Council Inquiries

Under section 27 of the Employment Education and Training Act 1988-2000 the ARC is able, on its own motion, to make inquiries, and to provide information and advice to the Minister, so long as this does not prejudice the performance of its functions that are undertaken at the direction of the Minister. The ARC will no longer have this power under the provisions of proposed section 6, which set out the functions of the Council. This change has been criticised by the Australian Vice-Chancellors' Committee and the National Tertiary Education Union ('NTEU').(13)

Ministerial Directions in Relation to the Performance of Functions

Under proposed subsection 7(1) the Minister may give directions to the Council about the performance of its functions. Under proposed subsection 7(3) such directions must be included in the annual report of the ARC. It might be argued that such directions should be tabled in Parliament within a given time of their making, considering the length of time that might elapse between a direction and the publication of the annual report. A similar power of direction relating to the current ARC contained a requirement for any directions or guidelines to be laid before each House of Parliament as soon as practicable (section 29 of the Employment Education and Training Act 1988), the NBEET was subject to the same type of provisions (section 8).

Sources of Advice for the Minister

Proposed subsection 52(4) states that 'the Minister may (but is not required to) rely solely on recommendations made by the ARC' in approving funding proposals for research programs. The AVCC has commented that this will allow the Minister 'to make decisions without regard to the advice of the ARC on particular grant proposals'.(14) However, this provision does not represent a change of policy. There is no requirement under either the Employment Education and Training Act 1988 or the Higher Education Funding Act 1988 for the Minister to have regard to the recommendations of the ARC in approving proposals for the funding of research programs.

Recipients of Funding

Under proposed subsection 51(1) the Minister may approve a proposal for expenditure to an organisation for a research program. The Bill does not specify what type of organisations will be eligible for funding. Proposed section 59 provides that the Board of the ARC must prepare rules dealing with the eligibility criteria for financial assistance, including criteria relating to the kinds of organisations and research programs that may receive assistance. These rules must be approved by the Minister to have effect (proposed section 60).

The provision of research grants to organisations other than higher education institutions is already permitted under section 23(1A) of the Higher Education Funding Act 1988. There is further information on the changes to the categories of funding made by this legislative package provided in the Bills Digest No. 54, 2000-01 for the Australian Research Council (Consequential and Transitional Provisions) Bill 2000.

Main Provisions

The preliminary part of this Bill provides some definitions and also explains the object of the proposed Act, that is: to establish the Australian Research Council, which will have input into decisions regarding research programs receiving financial assistance; and to provide generally for the funding of research programs.

The Council is formally established by proposed section 5 of the proposed Act, while proposed section 6 outlines the functions of the Council. These functions include advising the Minister on the administration of funding, including advice in response to written requests from the Minister. Under the current legislation governing the ARC (the Employment, Education and Training Act 1988) the Council is able to initiate its own inquiries (subsection 27(1)(c)), as long as these would not interfere with requests for advice from the Minister (subsection 27(3)). The proposed legislation does not include this capacity for Council initiated inquiries.

Proposed section 7 provides for the Council to be subject to written directions about the performance of its functions (there are similar counterparts in the current legislation - section 29). Proposed sub-section 7(2) provides a new, explicit legislative recognition that the Minister is not entitled to direct the ARC to specifically recommend that a particular proposal for funding should, or should not, be given support. Another potentially significant difference in the two legislative provisions regarding directions is that the proposed legislation would simply require directions given by the Minister to be included in the annual report of the Council (proposed subsection 7(5)), whereas current requirements provide for such directions to be tabled by the Minister in the Parliament (section 29(3A)).

The new structure of the ARC is reflected by providing for the appointment of a Board, a Chief Executive Officer ('CEO') and staff (proposed section 5 actually stipulates that the ARC consists of all these elements and the committees). Currently the Council consisted of a Chairperson and 8-10 appointed members. Proposed Part 3 deals with the Board. Once again there are provisions for the Board to be given directions by the Minister on the performance of the Board's functions (proposed subsection 10(1)) and for these directions to be included in the annual report (proposed subsection 10(2)). There is also provision made for the Minister to inform the Board of 'general policies of the Commonwealth Government' which the Board must then comply with (proposed section 11).

The Board consists of a Chair, the CEO, four ex-officio members (including two Departmental Secretaries, the Chief Scientist and the Chairperson of the National Health and Medical Research Council), and 8 other members who are to be appointed to 'reflect the breadth of academic, industry and community interests in the outcomes of research' (proposed subsection 14(1)). The Chair is to be appointed by the Governor-General and must be, in the Minister's opinion, 'a prominent member of the Australian community' and 'held in high regard by the research community' (proposed subsection 13(2) para. (a)). They may not be an APS employee ((proposed subsection 13(2) para (b)).

There are standard administrative arrangements made for acting appointments, and for the general conditions of appointment, resignation or termination of the Chair and other appointed members (proposed sections 15-22). The conditions for meetings are established by proposed sections 23-29, including a requirement that Board members disclose direct or indirect pecuniary interests in matters considered by the Board (proposed section 27). The presumption in these cases is that the member must not be present during deliberations or take part in any decision by the Board in these matters (proposed subsection 27(3)).

There are provisions made for the creation and dissolution of Committees which may assist the Council or the Board in discharging their duties. The assent of the Minister is necessary for these decisions regarding creation or dissolution (proposed section 30) and there are provisions governing the minimum number of members of a Committee (five) and who can be appointed as members (proposed section 32).

The CEO's and staff's conditions of appointment are elaborated in proposed part 5, with the CEO being engaged on a full-time basis for a maximum of five years, and staff being appointed under the Public Service Act 1999 (proposed section 41). The Minister is required to consider advice from the Board when appointing or terminating the CEO's appointment (proposed subsection 34(3) and 38(4)).

Proposed part 6 deals with the planning and reporting requirements governing the Board. The Board is required to establish 'performance indicators' and report against these in its annual report (proposed section 45). A 'strategic plan' is also required (proposed section 42), and must cover 3 years, setting out the 'goals, priorities, policies and strategies' that the ARC will adopt. The strategic plan must gain Ministerial approval (including provisions for the Minister to request changes (proposed subsection 43(1) para (a), and subsection 43(2)).

Proposed part 7 deals with funding arrangements. Proposed section 49 imposes a funding cap on the total of all approved amounts of $244 330 000 in 2001 and $243 812 000 in 2002. The Minister is required to determine the split between different categories of research programs within this total (proposed section 50).

Under proposed section 51 it is for the Minister to approve a proposal for expenditure by an organisation, an approval which must be tabled under proposed subsection 51(3), (the tabled document must include details of the grant to be made). The ARC is to make recommendations regarding which proposals should succeed, but there is no duty on the Minister to rely solely on those recommendations (proposed subsection 52(4)).

Proposed subsection 52(4) would seem to have a drafting error in it. The reference in the proposed subsection to the proposals being approved under 'subsection 7B(1)' should presumably be a reference to proposed subsection 51(1), the section under which proposals are approved.

Proposed sections 53-58 deal with the finer details of transferring funds, including conditions such as proposals not being approved if they would take funding levels over the cap.

Proposed section 59 requires the Board of the ARC to make rules regarding funding (including a capacity to stipulate which kinds of organisations may receive assistance (proposed subsection 2, paragraph (a)) and for the Minister to approve these rules or have them varied (proposed sections 60 and 61).

Proposed Division 2 of Part 7 deals with the establishment of an ARC Research Endowment Account, which will allow the ARC to receive donations and bequests from the community. Amounts which would have been approved under proposed Division 1 of this part, and which have the written approval of the Minister, can be disbursed from this account under terms and conditions established by the ARC.

Concluding Comments

In the Second Reading Speech for this Bill the Minister, Dr Kemp, said:

I am pleased to inform the House that, in our consultations with the higher education sector, we have found that the research community strongly supports the reforms to the ARC and the administration of its new programs put in place by this bill.(15)

While some of the concerns raised within the academic community have more to do with the levels of funding than with the arrangements instituted by the Bill it would seem that there is nevertheless some degree of concern regarding provisions of this Bill and the 'Consequential and Transitional' Bill that accompanies it.(16) For further information on these issues see also Bills Digest No. 54, 2000-01 on the Australian Research Council (Consequential and Transitional Provisions) Bill 2000.

Endnotes

  1. All the hyperlinks in the Digest were current as at the date publication
  2. http://www.deet.gov.au/highered/whitepaper/default.asp
  3. http://www.arc.gov.au/
  4. http://www.deet.gov.au/highered/otherpub/greenpaper/index.htm
  5. http://www.deet.gov.au/highered/respubs/small_grants/contents.htm
  6. http://www.deet.gov.au/highered/respubs/large_grants/contents.htm
  7. http://www.deet.gov.au/highered/respubs/uni_partner/execsum.htm
  8. http://www.deet.gov.au/highered/research/old/outcomes/phase1.pdf
  9. http://www.avcc.edu.au/avcc/mediarel/2000/2000mr01.htm
  10. AM, transcript, 4 October 2000.
  11. 'Australia 'at risk' of losing research race,' The Canberra Times, 5 October 2000.
  12. 'Funding R&D,' The Canberra Times, 25 September 2000; 'Missing the main game,' The Sydney Morning Herald, 2 October 2000; 'Technology gap growing, Government warned,' The Sydney Morning Herald, 3 October 2000; 'Does Australia have an IT image problem?' The Australian, 3 October 2000; 'Rust-bucket republic,' The Australian, 4 October 2000; 'Spending fall hits danger zone,' The Australian, 4 October 2000; 'Our scientists deserve a sporting chance,' The Australian, 4 October 2000; 'Australian inventions "being left on shelf",' The Canberra Times, 5 October 2000.
  13. 'Minchin to boost research funds,' The Australian, 5 October 2000.
  14. See 'Union, VCs lobby against ARC changes', The Australian, 4 October 2000.
  15. ibid.
  16. Hon Dr Kemp, Minister for Education, Training and Youth Affairs, Australian Research Council Bill 2000 Second Reading Speech, Parliamentary Debates, House of Representatives, 7 September 2000, p. 18363.
  17. See for instance 'Union, VC's lobby against ARC changes,' The Australian, 4 October 2000; and 'Private unis may bid for public grants,' The Canberra Times, 4 October 2000.

Contact Officer and Copyright Details

Kim Jackson and Kirsty Magarey
11 October 2 000
Bills Digest Service
Information and Research Services

This paper has been prepared for general distribution to Senators and Members of the Australian Parliament. While great care is taken to ensure that the paper is accurate and balanced, the paper is written using information publicly available at the time of production. The views expressed are those of the author and should not be attributed to the Information and Research Services (IRS). Advice on legislation or legal policy issues contained in this paper is provided for use in parliamentary debate and for related parliamentary purposes. This paper is not professional legal opinion. Readers are reminded that the paper is not an official parliamentary or Australian government document.

IRS staff are available to discuss the paper's contents with Senators and Members
and their staff but not with members of the public.

ISSN 1328-8091
© Commonwealth of Australia 2000

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 2000.

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