Budget Review 2022–23 Index
Tim Brennan, Dr Hazel Ferguson, Ian Zhou
Aggregate figures for Australian Government spending on research
and development (R&D) are reported each year in the Science, Research and
Innovation Budget Tables (SRI Budget Tables). The most recent SRI
Budget Tables (published in December 2021) show
that the Australian Government made a total investment in R&D of $11.8
billion during 2021–22.
This is a reduction of $184.1 million, or 1.5%, compared
with the previous year. This follows, however, a significant one-off investment
in research in the 2020–21 Budget (as discussed under ‘Research funding for
In 2021–22, the largest
components of government spending were industry R&D tax measures (24.7%),
research block grants (16.9%), and the Commonwealth Scientific and Industrial
Research Organisation (CSIRO; 8.0%) (Sector: Table 6).
To enable comparisons across time and between nations,
R&D spending is often measured as a proportion of gross domestic product
(GDP). In 2021–22, Australian Government R&D spending is forecast to be
0.56% of GDP (Figure 1). By this measure, current R&D spending is higher
than in the later years of the last decade (2016–17 to 2019–20) but below the long-term
average of 0.61% (based on a data series dating back to the late 1970s).
Figure 1 Government investment on research and
development as a percentage of GDP
Source: Department of Industry, Science, Energy
and Resources (DISER), Science, Research and Innovation (SRI) Tables, December 2021, (DISER: Canberra,
2021), Sector: Table 6.
Public research organisations
Table 1 outlines the funding for 3 of Australia’s key public
sector research organisations: the CSIRO, the Australian Nuclear Science and
Technology Organisation (ANSTO), and Geoscience Australia (GA).
Table 1 Changes in forecast budgets for public research agencies between 2021–22
Budget and 2022–23 Budget ($ million)
(a) Estimated actual.
(b) Budget (for 2021–22 figures), Estimated actual (for 2022–23
(c) Forward estimate.
Source: Australian Government, Portfolio Budget Statements 2022–23: Industry, Science, Energy and Resources
Portfolio, 128, 253, 281; Australian Government, Portfolio
Budget Statements 2021–22: Industry, Science, Energy and Resources Portfolio,
117, 234, 259 . Figures are taken from the ‘Revenue from Government’ figure in
each agency’s Table 3.1: Comprehensive income statement (showing net cost of
services) for the period ending 30 June. Difference figures are
Parliamentary Library estimates.
GA is forecast to receive a significant funding increase in
the forward estimate years, with annual figures as much as 37% above last
The bulk of the increased funding appears to be building on
the Satellite-Based Augmentation System (SBAS) used for global positioning
information. SBAS was allocated $224.9 million (over 4 years and across 2
measures) in the 2018–19 Budget (Budget
measures: budget paper no. 2: 2018–19, pp. 151–152). The 2021–22
Department of Industry, Science, Energy and Resources portfolio budget
statements shows additional departmental payments of $324.5 million (over 4
years) for the SBAS program (p. 273). This funding does not appear to be
outlined in Budget paper no. 2. GA will also be involved in implementing
the space sector support measures discussed below, however, the funding
allocated to GA for this work is not published in the Budget.
Table 1 also shows that CSIRO and ANSTO are allocated
increased funding compared to the 2021–22 Budget, although CSIRO is still
forecast to experience a decline in funding in 2024–25.
Research funding for universities
Portfolio Budget Statements 2022–23: Education, Skills and Employment
Portfolio (p. 61) show Research Block Grant
funding for universities returns to approximately $2 billion per year from 2021–22,
following the temporary $1 billion increase in Research
Support Program funding in 2021, provided in the 2020–21
Budget (p. 43) in response to COVID-19. The focus of the Government’s
university research policy is now on commercialisation, as discussed below. As
part of these commercialisation efforts, changes to the Research Block Grants
are planned to promote industry-university collaboration. These changes are currently
subject to consultation, and relate to the grant allocation methodology,
rather than the quantum of funding.
Funding for the major research grant providers is forecast
to grow over the forward estimates. As highlighted by Research
Australia, funding for the Australian Research Council’s (ARC) Discovery
and Linkage grant programs is forecast to grow at slightly above inflation.
By contrast, growth in funding for the National Health and Medical Research Council’s
Medical Research Endowment Account (MREA) is not forecast to keep pace with
inflation. Research Australia states (p. 2) that this real term decline in
funding for the MREA is ‘of genuine
concern to the health and medical community; it jeopardises our long-term
research capability and increases the precariousness of research careers,
especially for early and mid-career researchers’.
Investing in Australia’s university
This Budget’s most substantial new investment for
universities is the research commercialisation package (Budget
measures: budget paper no. 2: 2022–23, pp. 75–76), which provides
$988.2 million over 5 years from 2021–22 (approximately $325.1 million per year
ongoing). This will be used to establish Australia’s Economic
Accelerator (AEA), Industry
PhDs and Fellowships, and increase spending on research translation and
commercialisation through the CSIRO.
These measures form part of the $2.2 billion University Research
Commercialisation Action Plan (the Plan), which was announced
by the Prime Minister on 1 February 2022, and are the outcome of consultations and scoping work funded in
Budget (pp. 43–44). Over the 5 years from
2021–22, the AEA is allocated $505.2 million, and $295.2 million will go to the
Industry PhDs and Fellowships.
According to the Plan (pp.
5 and 40) total funding for the AEA is expected to be 1.6 billion over 11
years, making up the bulk of the Government’s investment in the Plan. This
long-term funding commitment is intended to provide support to bridge the
‘valley of death’, in which innovations fail to progress to market due to
uncertainties about commercial returns in the early stages of development. The
program will fund projects in the six National
Manufacturing Priority areas, and be stage-gated, with increasing amounts
of funding available for projects that continue to demonstrate potential.
Funding arrangements for the AEA program and Industry PhDs
are currently before Parliament in the Higher
Education Support Amendment (Australia’s Economic Accelerator) Bill 2022. Further detail is available in the Bills
Universities Program, which also forms part of the Plan but was announced
earlier, is also before Parliament in the Higher
Education Support Amendment (2021 Measures No. 1) Bill 2021, and detail is
available in the Bills Digest.
The measure also includes funding for two CSIRO programs supporting
research commercialisation. The CSIRO
Innovation Fund will be allocated $150.0 million over 5 years and the
Research Translation Start program $37.4 million over 4 years.
The CSIRO Innovation Fund (managed by Main Sequence) was first announced in the 2015 National
Innovation and Science Agenda (p. 7) with a $200 million investment from
the Australian Government. The Fund, which aims to commercialise technologies
developed by universities and other publicly funded research organisations, has
completed its first round of investments and commenced
a second investment fund in mid-2021. Prior to the investment in this Budget,
the second Fund had been solely
raised through investment from private capital.
The investments in these programs
are intended to contribute to long-term improvements in university-business
Australia performs poorly, despite decades
of policy effort. Recent
analysis by Industry Innovation and Science Australia (pp. 37–38)
highlights persistent barriers to such collaborations, including a lack of
commercialisation skills among publicly funded researchers, and limited
incentives to engage in commercial activity, but also points to their potential
to ‘drive stronger productivity growth and more novel innovations’.
The Australian Academy of Science (AAS) welcomed the Budget’s
investment in research translation and commercialisation but also noted the
lack of funding for foundational research. The AAS stated ‘it is
disappointing that fundamental science capability is not recognised as the
first essential step in the commercialisation effort, and there are no measures
to boost basic research investment.’
Support for the Australian space industry
The Support for the Australian Space Industry measure (Budget
measures: budget paper no. 2: 2022–23, pp. 127––128) continues the
Government’s focus over recent years in fostering the development of Australia’s
civilian space industry. This work has included the establishment of the
Australian Space Agency (ASA), the release of the Australian
civil space strategy 2019–2028, and the inclusion of space as one of
the 6 National Manufacturing Priorities. Investments in space have also taken
place in the Defence sector, with the creation of the Defence
Although total funding for this measure is $1.3 billion, it
is provided over a 17-year period (to 2038–39). This results in an average
annual allocation of $76.5 million per year, with a further $38.8 million per
year beyond 2038–39 (see p. 18). The Government has already provided partial
funding for this measure.
The bulk of the funding ($1.16 billion) is allocated to the
establishment of a National
Space Mission for Earth Observation. Earth Observation (EO) data is
primarily generated using satellites and is used in fields such as agriculture,
natural disaster response, weather forecasting, and climate science.
Australia currently receives its EO satellite date from
foreign sources and this has been highlighted by both the ASA and AAS as a
sovereign risk as there is no guarantee these data sources will remain freely
available. The ASA’s Earth observation
from space roadmap 2021–2030, highlighted the need to develop sovereign
EO capacity, while focusing on addressing gaps in the EO system rather than replicating
existing global capabilities (p. 15). The AAS’ Decadal plan
for Australian space science also recommended growing a sovereign EO
capacity with a focus on becoming a global leader in data validation and
calibration (p. 35). The AAS also supported (p. 33) a proposed program to launch 2
Australian satellites per year.
The National Space Mission for Earth Observation aims to
strengthen sovereign capability through designing, building and operating
4 satellites in Australia (although the timeframe for launching these
satellites is unclear). The program will also support CSIRO to develop a ground-based
satellite calibration and validation network.
on 3 March 2022, the Budget confirmed the cancellation of plans to charge rocket
launch fees, which had proved
unpopular within the space industry. The Budget also allocates $65.7 million
(over 5 years) to expand Australia’s space launching capabilities (Budget
measures: budget paper no. 2: 2022–23, p. 127). As part of this measure
the ASA (in collaboration with international partners) has been tasked with sending
an Australian astronaut into space.
The Budget’s investments in the space sector have been
welcomed by industry representatives. The Space
Industry Association of Australia described it as a significant investment
that ‘will mean we can begin to guarantee access to essential space services
for weather, disaster monitoring, and science’. Professor Phil Bland of Curtin
University noted, however, that there was no
funding for basic space science. Professor Bland added that fundamental
research is ineligible for funding under some space programs and that ‘no other
major spacefaring nation has implemented a strategy that formally excludes
The Government announced it will expand the scope of
Australia’s proposed patent box tax regime, which aims to promote R&D
investment and the commercialisation of research in Australia. If passed in the
Laws Amendment (Tax Concession for Australian Medical Innovations) Bill 2022,
the patent box scheme will provide a concessional tax treatment or tax
incentive for corporations to commercialise their eligible patents in
Australia. At the moment, eligible patents are limited to the medical and
Government announced in the 2022–23 Budget that it will expand the scope of
the patent box scheme to include the agricultural sector and the renewable
energy sector (pp. 22–23). In other words, patents relating to
agricultural technology and low emissions technology will also be eligible to
receive the concessional tax treatment of the patent box regime. The expansion of
the patent box regime was welcomed by the AAS
and the Australian
Academy of Technology and Engineering.
Other related measures:
Science, Technology, Engineering and Maths measure (p. 122) allocates $45.4
million (over 5 years), with the bulk of this funding ($33.4 million) going to
the National Measurement Institute. The remaining funds will extend 2 programs
supporting women in science, technology, engineering and maths, as well as
supporting the National Science and Technology Council (p. 122).
Advanced manufacturing is supported through budget
measures including: $328.3 million for the Modern Manufacturing Initiative
and Fund (p. 123); $83.1 million (over 5 years) to transition Australia to a
more circular waste economy (p. 51); and the agreement with Moderna and the
Victorian Government to establish mRNA vaccine manufacturing (p. 104).
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