University research funding: a quick guide

Updated 8 January 2021

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Dr Hazel Ferguson
Social Policy Section

Australian universities are required to undertake research, and offer Masters and Doctoral research degrees, in at least three broad fields, as a condition of registration.[1]

The Australian Government emphasises the importance of university research performance through assessments of quality and engagement and impact. A wide range of international rankings based largely on research performance, such as the Times Higher Education World University Rankings and QS World University Rankings, also confer academic prestige on highly ranked institutions.

Research performance is also often a basis for academic hiring and promotion, acting as an incentive (beyond inherent motivation) for individual researchers to maintain research activity.[2]

This quick guide explains how Australian universities resource research activities. Based on key Australian Government data, it sets out the major sources and distribution of university research funding.

Funding sources

Australian universities fund research activities from:

Higher education research expenditure

The Australian Bureau of Statistics (ABS) release Research and Experimental Development, Higher Education Organisations, Australia (formerly cat. no. 8111.0) publishes higher education expenditure on research and development (HERD). The latest issue, released on 20 May 2020, is based on survey data about research and development (R&D) performed by Australian higher education organisations during the 2018 calendar year. Although the data does not provide program-level detail to match the funding sources outlined above, it does include information about higher education organisations’ R&D expenditure by source of funds, type of activity, and field of research.

Source of funds

The two main sources of funds for HERD in 2018 were general university funds ($6,823 million, or 56 per cent of HERD) and Australian Government competitive grants ($1,700 million, or 14 per cent of HERD). As shown in Table 1, these were also the two main sources identified in each survey since 2008. 

Table 1: source of funds for higher education R&D expenditure, 2008–18 ($ million)

Source 2008 2010 2012 2014 2016 2018
General university funds 3 620.6 4 476.9 5 340.0 5 464.9 6 075.1 6 822.6
Australian competitive funds 1 204.8 1 355.6 1 624.7 1 832.1 1 672.8 1 774.1
     Commonwealth schemes 1 142.9 1 290.9 1 568.0 1 745.7 1 592.0 1 700.5
     Other schemes 61.9 64.7 56.7 86.3 80.8 73.7
Other Commonwealth government 1 001.3 1 233.6 1 448.4 1 614.6 1 610.1 1 891.2
State and local government 403.0 419.7 419.9 374.3 420.1 457.0
Business 338.2 336.3 398.2 426.0 476.0 521.9
Donations, bequests and foundations 95.9 140.1 124.0 192.8 250.8 300.5
Other Australian 41.0 19.0 23.8 0.1 0.3 0.1
Overseas 138.7 179.7 230.7 240.4 372.3 390.4
Total 6 843.5 8 160.9 9 609.7 10 145.1 10 877.5 12 157.8

Sources: Australian Bureau of Statistics (ABS), Research and Experimental Development, Higher Education Organisations, Australia, ABS, Canberra, 2020, Table 1; Research and Experimental Development, Higher Education Organisations, Australia, 2016, ABS, Canberra, 2018, Table 1; ABS, Research and Experimental Development, Higher Education Organisations, Australia, 2014, ABS, Canberra, 2016, Table 1. Notes: Figures are not adjusted for inflation. Figures may not sum due to rounding.

Expenditure by type of activity

In 2018, HERD comprised support for the following activities (in order of greatest expenditure): 

  • 48.4 per cent ($5,884 million) for applied research—‘original investigation undertaken in order to acquire new knowledge… directed primarily towards a specific, practical aim or objective’
  • 22.8 per cent ($2,769 million) for pure basic research—‘research carried out for the advancement of knowledge, without seeking long-term economic or social benefits or making any effort to apply the results to practical problems or to transfer the results to sectors responsible for their application’
  • 17.8 per cent ($2,167 million) for strategic basic research—‘experimental and theoretical work undertaken to acquire new knowledge directed into specified broad areas in the expectation of practical discoveries’
  • 11.0 per cent ($1,338 million) for experimental development—‘ systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes’.[3]

Expenditure by field of research

Table 2 shows HERD by broad Field of Research (FoR), arranged in descending order, for 2018. Almost one third of expenditure was in the Medical and Health Sciences (30.6 per cent), followed by Engineering (10.2 per cent). All other FoRs received less than 10 per cent of total expenditure.

Table 2: higher education expenditure on R&D, by Fields of Research, 2018 ($ million)

Field of Research Expenditure Percentage of total
Medical and Health Sciences               3 721.0 30.6
Engineering               1 245.1 10.2
Biological Sciences                  960.1 7.9
Studies in Human Society                  558.4 4.6
Agricultural and Veterinary Sciences                  487.8 4.0
Commerce, Management, Tourism and Services                  482.4 4.0
Information and Computing Sciences                  472.4 3.9
Environmental Sciences                  422.7 3.5
Education                  392.6 3.2
Physical Sciences                  392.5 3.2
Psychology and Cognitive Sciences                  366.0 3.0
Chemical Sciences                  358.6 2.9
Earth Sciences                  300.8 2.5
Language, Communication and Culture                  296.0 2.4
Economics                  295.7 2.4
Technology                  274.6 2.3
Built Environment and Design                  250.1 2.1
Law and Legal Studies                  231.8 1.9
Mathematical Sciences                  225.6 1.9
History and Archaeology                  178.3 1.5
Studies in Creative Arts and Writing                  156.8 1.3
Philosophy and Religious Studies                    87.5 0.7
Total 12 157.8 100

Source: ABS, Research and Experimental Development, Higher Education Organisations, Australia, op. cit.

Australian Government funding for university research

The Australian Government operates a ‘dual funding system’ for university research, made up of:

  • the DESE-administered RBGs to support the systemic costs of research including research student stipends and tuition fee offsets; and the indirect costs of competitive grants and
  • national competitive grants (predominantly through the ARC and NHMRC) for particular research programs, projects or fellowships as approved by the funding body based on academic peer review.

The House Standing Committee on Education, Employment and Training Inquiry into Funding Australia's Research (October 2018) found widespread support for this structure among universities—notwithstanding concerns about the efficiency of competitive grants application and administration processes, and what some describe as a shortfall between RBG funding and the indirect costs of government-funded research.  

Australian Government expenditure on university research

Information about Australian Government R&D expenditure over time is available from the Science, Research and Innovation (SRI) Budget Tables, published in the second half of each year by DISER. These detail all Australian Government R&D expenditure, including for university research.  

Table 3 shows estimated expenses for key Australian Government programs that fund university research.

Both the ARC and NHMRC fund some research outside the higher education sector, meaning total funding to universities from these programs will be lower than shown in Table 3. The SRI Budget Tables include a breakdown of RBG, ARC and NHMRC funding for the higher education sector only, but this breakdown does not provide forward estimates.

Table 3: estimated expenses, key Australian Government programs funding higher education research, 2015–16 to 2023–24 ($ million)

Program 2015–16 2016–17 2017–18 2018–19 2019–20 2020–21 (Budget) 2021–22 (Forward Est) 2022–23 (Forward Est) 2023–24 (Forward Est)
RBG 1 829.9 1 777.9 1 943.2 1 921.1 1 938.4 2 973.3 1 990.9 1 996.9 2 015.8
NHMRC grants 825.5 840.5 853.1 846.2 901.4 891.3 887.8 889.9 912.8
ARC grants 815.3 743.7 758.0 764.1 781.8 811.0 814.5 815.9 820.5

Sources: DISER, Science, Research and Innovation (SRI) Budget Tables, September 2019; Australian Government, Portfolio budget statements 2020–21: budget related paper no. 1.4: Education, Skills and Employment Portfolio, pp. 57 and 147; Australian Government, Portfolio budget statements 2019–20: budget related paper no. 1.7: Health Portfolio, p. 346.

Distribution of research income from key Australian Government programs

Although all universities receive some Australian Government research funding, the majority goes to the research-intensive Group of Eight (Go8) institutions: the Australian National University, University of Adelaide, University of Melbourne, Monash University, University of Queensland, University of Sydney, University of New South Wales, and University of Western Australia.

According to calculations based on time series data from DESE, shown in Table 4, in 2019:

  • the Go8 universities received 66.6 per cent of cumulative funding from the RBG, NHMRC and ARC grant income
  • the Australian Technology Network (ATN), made up of the University of South Australia, RMIT University, the University of Technology Sydney, Curtin University, and Deakin University, received 8.7 per cent of this income
  • the Innovative Research Universities (IRU), made up of Charles Darwin University, Flinders University, Griffith University, James Cook University, La Trobe University, Murdoch University, and Western Sydney University, received 8.5 per cent of this income
  • the Regional Universities Network (RUN), made up of CQ University, Federation University, University of Southern Queensland, Southern Cross University, the University of New England, the University of the Sunshine Coast, and Charles Sturt University, received 2.1 per cent of this income
  • the remaining 15 universities (unaligned) collectively account for the remaining 14.0 per cent of RBG, ARC and NHMRC income for 2019. 

Because income data is reported by calendar year, it does not match financial year expenses information for Australian Government programs. 

Table 4: RBG, ARC and NHMRC research income by university affiliation, 2019 ($ million)

Affiliation RBG ARC NHMRC Total Percentage of total
ATN  179.2  65.9  43.2 288.3 8.7
Go8 1 207.8 431.2  557.0 2 196.0 66.6
IRU 183.0  44.6  54.1 281.7 8.5
RUN 58.8  6.7  3.0 68.5 2.1
Unaligned 292.3 102.9  66.1 461.3 14.0
Total 1 921.1 651.3  723.4 3 295.8 100.0

Source: Parliamentary Library calculations using DESE, Consolidated Time Series Data.

Note: Totals may not sum due to rounding.

Further information

  • DISER publishes the Australian Innovation System Monitor each year, covering the performance of Australia’s R&D investment, including international comparisons and reflections on policy directions and future challenges.
  • The ARC publishes information about the outcomes of funding rounds in its Selection Outcome Report. A statistical breakdown for approved proposals in each recent scheme round is also available via the ARC Grants Search website.
  • The NHMRC publishes outcomes of funding rounds data and research funding data.
  • DESE compiles the Finance Publication covering annual financial performance, financial position and cash flows for universities, derived from institutions’ financial statements.
  • The Organisation for Economic Co-operation and Development (OECD) Research and Development Statistics provide information about resources devoted to R&D for OECD member countries and seven non-member economies. The database covers gross domestic expenditure on R&D by sector and source of funds.
  • The peak body for Australian universities is Universities Australia (UA). UA publishes a range of policy analysis and sector views, including information about university R&D. UA’s latest analysis of Australian Government funding for university research is included in its 2020–21 Pre-Budget Submission (pp. 7–12).

[1].   Higher Education Standards Framework (Threshold Standards) 2015, Part B1.2.3. Under the Threshold Standards, Australian higher education providers that are not registered as universities are not required to conduct research.

[2].   For example, see: Australian National University (ANU), ‘Procedure: Academic promotion’, ANU website; University of Sunshine Coast (USC), ‘Academic Promotion – Procedures’, USC website, accessed 6 October 2020.

[3].   As defined in ABS, ANZSRC - Australian and New Zealand Standard Research Classification, 2020, ABS, Canberra, 2020.

 

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