Science and research

Budget Review 2020–21 Index

Dr Hunter Laidlaw

While the overall picture of science research funding will become clearer when the Department of Industry, Science, Energy and Resources releases the Science, Research and Innovation Budget Tables (SRI Tables), some notable updates were provided in the Budget. Until the SRI Tables are updated, overall trends can be difficult to interpret, particularly as the sector crosses several functions discussed in the Budget Strategy and Outlook Budget Paper No. 1: 2020–21 including general research, education, health and agriculture.

When the SRI Tables were last updated, Australian Government spending on research and development (R&D) as a proportion of Gross Domestic Product (GDP) was forecast to be 0.48 per cent in 2019–20 (Figure 1). This is below the long-term average of 0.61 per cent and is the lowest level in 40 years. The recent trend in government investment is consistent with Australia’s gross expenditure on R&D (GERD; including by business and higher education) which is below the OECD average and has been trending down since 2008.

Figure 1: Australia Government investment in R&D as percentage of GDP

Source: Department of Industry, Innovation and Science, 2019–20 Science, Research and Innovation (SRI) Budget Tables, Sector table 6, updated 26 February 2020.

Research support

University research

The Budget provides a major boost to support the cost of university research in 2020–21 with an additional $1.0 billion to be provided through the Research Support Program that provides Research Block Grants to higher education providers. This will assist universities with the post-COVID recovery following significant shortfalls in income from overseas student fees that would otherwise support research in the sector. It is the main component of the JobMaker Plan—Research Package (Budget Measures: Budget Paper No. 2: 2020–21, p. 79). Further discussion is provided in the Higher education research and teaching brief.

Research infrastructure

The Government will continue implementation of the 2016 National Collaborative Research Infrastructure Strategy (NCRIS) Roadmap with the 2020 Research Infrastructure Investment Plan (RIIP 2020). The new plan, to be ‘available shortly’, will continue to provide support for national research infrastructure facilities and investment in emerging priorities as identified in the 2016 Roadmap. It forms part of the Research Package.

The implementation of the previous investment plan was announced in the 2018–19 Budget with a $1.9 billion allocation over 12 years from 2017–18. A list of currently funded projects is provided on the research infrastructure projects webpage. This Budget provides funding for four new national research infrastructure projects for three years from 2020–21 through the RIIP funding envelope:

  • early implementation of the Sea Simulator project to support the Great Barrier Reef Restoration and Adaption Program ($36.3 million)
  • increased capabilities of the e-research platforms in humanities, arts, social sciences and Indigenous fields ($8.9 million)
  • establishment of new synthetic biology research infrastructure for emerging disease and biosecurity risks and to address critical gaps in technological platforms and informatics ($8.3 million) and
  • upgrade of the Australian Community Climate and Earth System Simulator (ACCESS) to increase Australia’s capacity to respond to future climate disasters and emergencies ($7.6 million). ACCESS is a suite of models used for research and operational needs in weather forecasting and climate projections.

R&D tax incentive

This tax incentive is designed to support business investment in R&D. Budget Paper No. 2 details changes to the scheme that are estimated to decrease the underlying cash balance by $2.0 billion over the forward estimates period (pp. 19–20). Business expenditure on R&D (BERD) in Australia relative to GDP has been declining and contributes to the downtrend seen for GERD noted earlier. It is also consistently below the OECD average. As the measure effectively reverses the Government’s earlier changes to the scheme, it is not certain whether this will lead to any significant impact on these broader trends. The R&D tax incentive is discussed in detail elsewhere in this Budget Review.

Careers in Science, Technology, Engineering and Mathematics (STEM)

In addition to measures that support university research and researchers through the COVID disruption, other Budget measures are designed to encourage or support STEM-based careers. The cross-portfolio JobMaker Plan—Second Women’s Economic Security Package continues support for existing initiatives for women and girls to gain STEM skills and capabilities (Budget Paper No. 2, pp. 67–68). This includes the Women in STEM Ambassador (Professor Lisa Harvey-Smith was recently reappointed for another two years), Women in STEM Entrepreneurship Grants Program and Girls in STEM Toolkit (total $14.5 million over four years). A Women in STEM Industry Cadetship will also be established to support 500 women working in STEM industries to complete an Advanced Diploma through a combination of study and work‑based learning ($25.1 million over five years). Other changes in higher education funding that may impact STEM-related fields (such as changes to university funding arrangements and student contributions) are discussed in the Higher education research and teaching brief.

Agency funding

Commonwealth Scientific and Industrial Research Organisation (CSIRO)

The Department of Industry, Science, Energy and Resources Portfolio Budget Statements (DISER PBS) indicate that CSIRO is facing a reduction in funds from its own source revenues in 2020–21, including a $91 million reduction in sales of goods and services (p. 256). In response, the Government will provide an additional $459.2 million over four years through the JobMaker Plan—Commonwealth Scientific and Industrial Research Organisation—supporting essential scientific research measure including $133.1 million for 2020–21. According to Budget Paper No. 2, this will ‘address the impacts of COVID-19 on its commercial activities and ensure it is able to continue essential scientific research’ (p. 115).

The net impact of decreased funding from the CSIRO’s own source revenues, offset by additional funding from Government, is that the CSIRO’s total resourcing is expected to grow slightly from $1,759.0 million in 2019–20 to $1,810.3 million in 2020–21, an increase of 2.9 per cent (DISER PBS, p. 256). CSIRO’s average staffing level will also increase by 210 to 5,351. This will assist the organisation to increase staffing from their 2014–15 low of 4,836 full time equivalent (FTE) staff, but this is still well under their earlier staffing level of almost 6,000 FTEs in the early 2000s.

Australian Research Council (ARC)

Appropriations for the ARC’s Discovery and Linkage research programs are slightly lower than expected compared with the last budget update and the balance between these programs will shift a little (Table 1). Funding for the Discovery program remains relatively steady across the forward estimates, while funding for the Linkage program increases more than previously expected. This results in the proportional funding split between the Discovery and Linkage programs changing from 64:36 to 60:40 per cent going forward.

Table 1: ARC special appropriations compared with last budget update, 2019–20 to 2023–24

$ million Budget 2019–20 2020–21 2021–22 2022–23 2023–24
Discovery 2019 (a) 507.0 512.5 523.2 535.0 na
2020 (b) 485.8 483.3 487.0 487.9 490.6
Linkage 2019 279.2 288.2 293.9 300.6 na
2020 289.1 322.2 323.9 325.2 327.1
Total 2019 786.2 800.8 817.2 835.6 na
2020 774.9 805.5 810.9 813.1 817.7

na: not applicable
Source: (a) Australian Government, Portfolio Additional Estimates Statements 2019–20: Education, Skills and Employment Portfolio, p. 81. (b) Australian Government, Portfolio budget statements 2020–21: budget related paper no. 1.4: Education, Skills and Employment Portfolio, p. 147.

National Health and Medical Research Council (NHMRC)

The NHMRC uses the Medical Research Endowment Account (MREA) to support medical research and medical research training. Appropriations to the MREA are slightly lower than expected from last budget and the future annual rate of increase is also smaller (Table 2). No additional funding measures were provided directly to the NHMRC in the Budget.

Table 2: Appropriations to the NHMRC MREA (accrual basis), 2019–20 to 2023–24

$ million 2019–20 2020–21 2021–22 2022–23 2023–24
2019 Budget (a) 842.8 856.3 870.0 883.9 na
% annual increase 1.62 1.60 1.60 1.60 na
2020 Budget (b) 846.6 853.9 862.4 872.8 885.0
% annual increase 2.08(c) 0.86 1.00 1.20 1.40

Source: (a) Australia Government, Portfolio budget statements 2019–20: budget related paper no. 1.9: Health Portfolio, p. 356. (b) Australian Government, Portfolio budget statements 2020–21: budget related paper no. 1.9: Health Portfolio, p. 346.
(c) Calculated using 2018–19 data in (a).

Medical Research Future Fund (MRFF)

The final transfer of $3.2 billion was made to the MRFF on 21 July 2020, fulfilling the Government’s $20 billion commitment to the fund. In recent years, these funds have been sourced from savings in the health portfolio (Budget Paper No. 1, p. 10-43). The fund is expected to grow to over $21 billion during 2022–23 (Finance PBS, p. 33).

A total of $572.6 million is set to go towards medical research from the MRFF in 2020–21, increasing to $646.0 million in 2021–22. Management fees for the fund are expected to increase from $26.0 million in 2019–20 to $87.7 million in 2020–21, coinciding with increased investment earnings and gains which increase from $55.3 million to $889.2 million over the same period (Finance PBS, p. 33).

Consultation on new MRFF Australian Medical Research and Innovation Priorities (which are considered by the Health Minister before the Government decides on the disbursement of MRFF funding) has recently closed. The new priorities for 2020–22 must be tabled in Parliament by 6 November 2020. These priorities must be consistent with the Australian Medical Research and Innovation Strategy 2016–21 until it expires in November 2021, after which a new five-year strategy must be developed.

Australian Nuclear Science and Technology Organisation (ANSTO)

ANSTO received additional funding of $238.1 million over four years and $39.0 million per year ongoing (Budget Paper No. 2, p. 60). The four-year package is to support ANSTO’s core business operations ($62.7 million), the nuclear medicine production facility and response to its production disruption ($93.8 million), and radioactive waste and spent fuel management and decommissioning work ($81.6 million). The Department of Finance will also undertake a scoping study with ANSTO on governance and commercial arrangements (expenditure not published due to commercial sensitivities).

Australia Radioactive Waste Agency (ARWA)

In addition to expenditure on radioactive waste management for ANSTO, $103.6 million over four years is being provided to the National Radioactive Waste Management Facility (NRWMF) program (Budget Paper No. 2, p. 122). Around $54.9 million has previously been spent on the site selection process between July 2014 and October 2019.

Operational from 21 July 2020, the Australian Radioactive Waste Agency (ARWA) is responsible for progressing the NRWMF and obtaining the relevant approvals for construction and operation of the facility. ARWA commenced as a branded function within the Department of Industry, Science, Energy and Resources and is expected to transition to a non-corporate Commonwealth entity. The Budget includes $37.3 million to establish the agency which will be based in Adelaide.

The remaining $66.3 million is being provided to undertake the technical, design, regulatory and governance works required to progress and secure the NRWMF. On 1 February 2020, the Minister announced that Napandee near Kimba in South Australia was the preferred site for the facility. The National Radioactive Waste Management Amendment (Site Specification, Community Fund and Other Measures) Bill 2020 was subsequently introduced to specify the site in legislation. The selection of the site remains controversial, as discussed in the Bills Digest and Senate inquiry report. While the legislation has passed the House, the Senate still needs to consider the Bill.

Australian Renewable Energy Agency (ARENA) and emissions reduction

New long-term funding has been provided to ARENA as part of the Government’s investment in new energy technology (Budget Paper No. 2, p. 118–119). Through this 12 year funding package, ARENA will receive guaranteed baseline funding of $1.4 billion from 2020–21 to support investment and commercial readiness of emerging low emission technologies. The Government will introduce new legislation to support the measure and to extend ARENA’s currently legislated funding that ends in 2021–22 (section 64 of the ARENA Act 2011).

A core element of the Government’s Long-term Emissions Reduction Strategy is the Technology Investment Roadmap (see the discussion paper). This Roadmap will essentially be an R&D strategy and is designed to accelerate the development and commercialisation of new and emerging technologies that can contribute to lowering greenhouse gas emissions. The Strategy will be taken to the next international climate change conference in Glasgow in 2021. Funding is being provided to implement the Roadmap ($5.2 million over four years from 2020–21). This will support the annual Low Emissions Technology Statements to identify priority technologies and create an ongoing Technology Investment Advisory Council. Further details on the package and related issues are discussed elsewhere in this Budget Review.

Stakeholder reaction

Representative organisations in the science sector have broadly welcomed the Budget. The Australian Academy of Science recognises it as a significant response to the pandemic and called for more to be done to fix the fragmented research funding system ‘to place it on a sustainable footing over the long term’. The Australian Academy of Technology and Engineering also welcomed the Budget and its lifelines to the innovation economy that will ‘contribute to the translation and commercialisation of research, build industry engagement and create jobs’. Research Australia welcomed the commitment to university research jobs as an ‘interim step towards establishing a more sustainable higher education sector’. Science & Technology Australia backed many of the Budget initiatives and the crucial role of STEM in the economic recovery.


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