Bills Digest No. 37, 2023-24

Australian Research Council Amendment (Review Response) Bill 2023

Education

Author

Dr Robyn Prior and Tim Brennan

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Key points

  • The Australian Research Council Amendment (Review Response) Bill 2023 (the Bill) amends the Australian Research Council Act 2001 (ARC Act) to make changes to the Australian Research Council’s (ARC) purpose, oversight and funding arrangements.
  • The Bill inserts a revised objects provision into the ARC Act, with the aim of establishing a clearer statement of the ARC’s purpose.
  • The Bill establishes an ARC Board as the accountable authority of the ARC. The Board will have skills-based appointees, First Nations representation, and a representative of regional, rural and remote Australia. The Bill devolves the appointment process for the Chief Executive Officer to the Board, in consultation with the Minister.
  • The Bill makes the Board responsible for providing advice to the Minister on funding rules (grant guidelines), with approved funding rules now subject to disallowance.
  • The Board will also have responsibility for approving spending on research programs under funding rules, including grants within the National Competitive Grants Program. The Minister will retain the ability to approve grants for designated research programs, which currently include ARC Centres of Excellence, Industrial Transformation Training Centres and Industrial Transformation Research Hubs. The Minister also retains the right to direct the ARC to not fund a research proposal or to recover funds from previously approved research grants based on security, defence or international relations concerns.
  • The Bill changes the funding arrangements for the ARC to enable greater funding flexibility and certainty, and to reduce legislative burden.
  • The Bill implements 6 recommendations from Trusting Australia’s Ability: Review of the Australian Research Council Act 2001.
  • The main organisations representing universities are broadly supportive of the Bill.
  • The Senate Standing Committee for the Scrutiny of Bills has sought advice from the Minister on a number of aspects of the Bill. The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 5 February 2024.
Introductory Info Date introduced: 29 November 2023
House: House of Representatives
Portfolio: Education
Commencement: 1 July 2024

 

This Bills Digest replaces an interim Bills Digest published on 4 December 2023 to assist in early consideration of the Bill.

Glossary

Abbreviation Description
ARC Australian Research Council
ARC Act Australian Research Council Act 2001
CEO Chief Executive Officer
CoE College of Experts
NCGP National Competitive Grants Program

Terms defined in the Bill are italicised in this Digest.

Purpose and structure of the Bill

The purpose of the Australian Research Council Amendment (Review Response) Bill 2023 (the Bill) is to amend the Australian Research Council Act 2001 (ARC Act) to make changes to the Australian Research Council’s (ARC) purpose, oversight and funding arrangements. When introducing the Bill in Parliament, the Minister for Education Jason Clare stated:

As a nation we are rightly proud of our reputation in research, and the measures in this bill will help support the discoveries and innovations of the future. They will modernise the ARC, strengthen it, and build more trust so it can continue to spur innovation and catalyse productivity in the years ahead.[1]

The Bill consists of 5 Schedules:

  • Schedule 1 repeals and replaces the objects section of the ARC Act to set out a clearer statement of the ARC’s purpose.
  • Schedule 2 inserts a new Part 3 establishing the Board and setting out administrative matters relating to the Board, including its functions and procedures, its composition, the appointment of members and the CEO. It also provides for the establishment of new committees by the Board or Minister to support the Board, and provides for the Minister to give the Board directions by non-disallowable legislative instrument in certain circumstances.
  • Schedule 3 repeals and replaces Division 1 of Part 7 relating to Financial Assistance for Approved Research Programs. It enables the Board to approve grant funding, according to approved funding rules prepared by the Board and approved by the Minister, for programs except designated research programs. It establishes that funding of designated research programs must be approved by the Minister. It also provides for the Minister to give the Board directions to not approve grants, or to terminate funding approval, ‘for reasons relevant to the security, defence or international relations of Australia’. In addition, this Schedule sets out changes to the funding of the ARC from special appropriation to annual appropriation arrangements.
  • Schedule 4 repeals Part 6 relating to Reporting and inserts proposed section 65A specifying the reporting requirements of the ARC, so that matters such as ministerial directions are included in the Annual Report.
  • Schedule 5 enables the Minister to make transitional rules relating to the amendments or repeals made by the Bill.

The Bill implements 6 recommendations from Trusting Australia’s Ability: Review of the Australian Research Council Act 2001.

Background

Australian Research Council

The Australian Research Council (ARC) is a Commonwealth entity established as an independent body (a non-corporate Commonwealth entity) under section 5 of the ARC Act. The purposes of the ARC are to:

  • make recommendations to the Minister regarding the funding of research applications
  • administer the research funding programs
  • provide advice to the Minister on research matters.[2]

In its Annual Report, the ARC describes itself:

The ARC is a vital component of Australia’s innovation and research system. We play an integral role in supporting the research sector to produce high-quality and impactful research through the delivery of the NCGP [National Competitive Grants Program].

Our broader remit includes the provision of high-quality research policy advice to the Australian Government, overseeing the Australian research ethics and integrity framework, the national university research assessment system that promotes excellence in research and its engagement and impact, powerful data assets, and our role in fostering research quality, translation and impact. The ARC also brokers partnerships between researchers and industry, government, community organisations and the international community.[3]

The National Competitive Grants Program

The ARC primarily funds researchers, research teams, and research centres through the National Competitive Grants Program (NCGP) and its 2 component grant schemes, the Discovery Program and the Linkage Program.

The Discovery Program funds research by individuals and teams and includes funding for fundamental, basic, ‘blue sky’ research.[4] In 2023, the Discovery Program funded research through 5 schemes:

The Linkage Program funds research that involves partnerships between researchers and business, industry, community organisations, and other publicly funded research agencies. These partnerships aim to encourage ‘the transfer of skills, knowledge and ideas as a basis for securing commercial and other benefits of research’.[5] In 2023, the Linkage Program funded research through 5 grant schemes:

Grants are provided through the NCGP based on competitive, peer-reviewed processes. Most NCGP schemes are highly competitive. For example, for all scheme rounds commencing in 2023 and 2024, the overall success rate of applications was 17.7%.[6]

ARC Review

On 30 August 2022, the Minister for Education announced that an independent 3-person panel would undertake a Review of the Australian Research Council Act 2001. A review of the ARC was a unanimous recommendation of a 2022 Senate Standing Committee on Education and Employment inquiry in relation to the Private Senator’s Australian Research Council Amendment (Ensuring Research Independence) Bill 2018.[7] The ARC review was the first comprehensive review of the ARC since the introduction of the ARC Act in 2001.[8]

The Terms of Reference for the review asked the panel to consider:

1. whether the role and purpose of the ARC as set out in the legislation remains relevant, including consideration of the contribution the ARC can make to identifying reforms to its programs to actively shape the research landscape in Australia and better align with comparable research agencies

2. the ARC governance model and management functions and structures to ensure they are contemporary, fit for purpose, and meet the needs of stakeholders

3. opportunities to improve the legislation to better facilitate globally competitive research and partnerships, reduce unnecessary administrative and legislative burden and increase agility; and

4. how the legislation could be revised to reflect the breadth of functions of the ARC and its evolution, including the measurement of the impact and excellence of Australian research and advise on contemporary best practice for modernising and leveraging these measures.[9]

On 9 November 2022, the review panel released a Consultation paper and invited submissions.[10] The review panel received 223 written submissions. It also held meetings and focus groups with stakeholders.

ARC Review final report

On 20 April 2023, the Minister for Education released the ARC review panel’s final report, Trusting Australia’s Ability: Review of the Australian Research Council Act 2001 (ARC Review). It includes 10 recommendations which aim to ‘enhance the trust in the ARC by the government and the research community’.[11]

Upon release of the report, ARC Chief Executive Officer Judi Zielke stated that:

…while a response to the findings of the Review is a matter for the Government, the report is a strong endorsement of the role and positive impact the ARC has had on Australia’s research capability over the last twenty years.[12]

Government response to the ARC Review final report

On 22 August 2023, the Minister for Education released the Australian Government response to the ARC Review. The Government agreed or agreed in principle with each recommendation. Amendments to the ARC Act were noted as required to implement 6 recommendations (Recommendations 1, 2, 5, 6, 7 and 9).

Consultation paper on proposed amendments to the ARC Act

On 30 October 2023, the Department of Education released the Australian Research Council Act 2001 – Proposed Amendments Consultation Paper (Consultation Paper). The Consultation Paper ‘sets out the proposed changes to the [ARC’s] enabling legislation … as part of the Government’s response to the recommendations from the independent Review’.[13] The Department invited submissions and also held targeted consultations in October – November 2023. 11 submissions were received but do not appear to have been publicly released.

The Consultation Paper did not provide substantially more detail regarding the Government’s proposed approach than had already been provided in its response to the ARC Review. Several of the main advocacy organisations representing universities expressed the need for greater clarity on key issues and called for the release of an exposure draft of the Bill for consultation.[14] An exposure draft was not released prior to the introduction of the Bill.

Committee consideration

Senate Education and Employment Legislation Committee

The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 5 February 2024. Details of the inquiry are at the inquiry homepage. Submissions closed on 19 January 2024. The Committee received 27 submissions.

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills considered the Bill and identified several issues of concern.[15] The Committee has sought further detailed advice from the Minister as to:

•  why it is necessary and appropriate to provide the minister and the board with a broad power to vary funding approvals under proposed subsections 47(5) and 48(4);

•  why it is necessary and appropriate to provide the CEO with a broad power to vary funding agreements under proposed subsection 50(2);

•  whether guidance can be provided as to how the CEO must be satisfied that a breach of a condition of the funding agreement has occurred under proposed subsections 50(1);

•  whether independent merits review will be available in relation to a decision made under proposed subsection 50(1), 50(4) or 50(5) of the bill or if not, why not; and

•  why it is necessary and appropriate to exclude independent merits review of a decision made under proposed subsection 50(1), 50(4) or 50(5) of the bill, with reference to the Administrative Review Council's guidance document, What decisions should be subject to merits review?[16]

At the time of writing, the Minister’s response had not been received by the Committee.[17]

Policy position of non-government parties/independents

At the time of writing there does not appear to have been any statements by non-government parties or independents on the Bill itself.

Australian Greens Senator Mehreen Faruqi did, however, welcome the Government’s decision to accept the recommendations of the ARC Review. Senator Faruqi has previously advocated for the removal of the ministerial discretion over grant approvals (the ministerial ‘veto’) and introduced the Australian Research Council Amendment (Ensuring Research Independence) Bill 2018.[18] In her second reading speech, Senator Faruqi stated:

No Minister should be able to dictate which research projects get funded and which ones don't. The true test of academic freedom is that it must be free from political interference, no matter who is in Government. It should be based only on an independent rigorous assessment process.[19]

Position of major interest groups

To date, there has been little detailed commentary on the Bill, but several major stakeholders in the research community have expressed support for the Bill. These groups include:

Currently, there does not appear to be any stakeholder groups publicly opposing the passage of the Bill.

Further relevant stakeholder commentary was provided during the ARC Review, in response to the Consultation Paper, and through submissions to the Bill inquiry. There appears to be strong support in the university and research community for the implementation of the recommendations of the ARC Review.

Financial implications

The Explanatory Memorandum states that:

The measures contained in the Bill, which establish the ARC Board as the accountable authority and restructures the ARC’s governance arrangements, will cost approximately $1.5 million per annum (approximately $0.6 million per annum of direct costs from the establishment of the Board and $0.9 million to support the governance processes). These costs will be met from existing resourcing through reprioritisation from within the ARC’s current annual departmental budget with zero net financial impact.[20]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[21]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights has considered the Bill and had no comment.[22]

Key issues and provisions

A clearer statement of the ARC’s purpose

The ARC Review highlighted that the ‘role and historical purpose of the ARC is not evident from the ARC Act itself’.[23] Currently, the ARC Act states that the objects of the ARC are to provide recommendations regarding research programs to be funded, to administer research funding, and to provide advice to the Minister on matters related to research.[24]

The ARC Review noted that stakeholders highlighted the importance of the ARC as the ‘guardian of basic, or fundamental “blue-sky” research’.[25] The Review also noted that the ARC had recently begun to provide grants administration and peer review services to other government agencies.[26] The Review recommended greater legislative clarity for the role of the ARC, including providing a clearer scope for the NCGP (Recommendation 1) and for the ARC’s activities beyond the NCGP (Recommendation 2).[27]

The Bill repeals and replaces section 3, the objects clause, setting out more comprehensively the purpose of the ARC.[28] The amended purpose largely reflects the Review’s recommendations.

However, the Review also suggested that the ‘commitment to funding basic research should be incorporated into the purposes of the ARC Act along with an explicit statement about the value such investigator-led basic research affords in underpinning the remainder of the research ecosystem’.[29] While basic research is specified as one type of research to be funded (proposed paragraph 3(e)), the revisions do not provide an explicit statement highlighting the particular importance of basic, or investigator-led, research. This omission was highlighted by Universities Australia in its response to the Consultation Paper.[30]

Establishment of a Board

Schedule 2 of the Bill inserts a new Part 3 establishing a Board and makes a range of associated consequential amendments relating to the functions and powers of the Minister, Board and CEO.

The ARC, as originally constituted, was governed by a board. The board was abolished by the Australian Research Council Amendment Act 2006.[31] At the time, the Australian Vice-Chancellors’ Committee expressed concern about the impact of the board’s removal on operations of the ARC, and the National Tertiary Education Union noted that the board was a source of strategic advice and ‘a buffer’ to the political whims of the day.[32]

The ARC Review noted that its consultations had indicated strong support for the re-establishment of an ARC board. The ARC Review recommended a board be established with functions including the appointment of the CEO, approving the appointment of the College of Experts (CoE, discussed below), and approving recommendations for funding under the NCGP (Recommendation 6).[33] These functions of the Board are outlined in the Bill.[34]

The ARC Review recommended that the board be chaired by a person held in high regard by universities and the broader research community.[35] It also recommended that the board consist of up to 6 other members with a ‘combination of skills, experience, and perspectives relevant to the functions of the ARC across the spectrum of ARC disciplines, Aboriginal and Torres Strait Islander leadership, research administration and evaluation, and university industry partners’.[36] The Review further adds:

The function we propose here for the Board requires members with broad expertise across the spectrum of ARC funded disciplines and collaborating organisations, including sufficient senior management and governance experience to fulfill that role.[37]

The Bill provides that the Minister may appoint a Chair, Deputy Chair, and ‘not fewer than 3, and not more than 5, other members’ to the Board.[38] The Minister must be satisfied that the person appointed as Chair has ‘substantial experience or expertise, and professional credibility and significant standing’ in research or the management of research.[39] In addition, the Minister must be satisfied that:

  • a majority of Board members ‘have substantial experience or expertise in one or more fields of research or in the management of research’
  • one of the Board members is an Indigenous person and
  • one of the Board members is a person who will represent regional, rural and remote Australia.[40]

The Minister must also have regard to the Board's membership ‘reflecting the diversity of the general community’.[41]

Some stakeholders have been critical of the proposed composition of the Board, suggesting it will not have sufficient expertise.[42] The Regional Universities Network welcomed the inclusion of a member to represent rural and regional Australia, which it had recommended in its response to the Consultation Paper.[43]

Appointment of CEO

The CEO of the ARC is currently appointed by the Minister.[44] As recommended by the ARC Review, the Bill transfers this function to the Board (recommendation 7).[45] The Bill also amends the functions of the CEO and the appointment process, including the required qualifications of the CEO.[46] Existing subsection 34(2) requires that the Minister consider the [proposed CEO’s] ‘record in research and management’, whereas proposed subsection 34(2) will require that the Board be satisfied that the proposed CEO has ‘substantial experience or expertise, and professional credibility and significant standing, in one or more fields of research or in the management of research’.

The CEO must also be appointed on the basis of a merit-based process that includes the position being publicly advertised.[47] Although the Board appoints the CEO, the Minister retains a role in the process. The proposed provisions in relation to the CEO are similar to, and consistent with, provisions applicable to comparable CEO positions at statutory authorities. However, rather than requiring the Board to ‘consult’ with the Minister about the proposed appointment of a CEO, proposed subsection 34(3) would require the Board to give the Minister details of at least 2 possible candidates for appointment as CEO and provide the Minister with a reasonable opportunity to make representations to the Board about those candidates. In effect, this proposed provision formalises and to some extent codifies consultation processes that have been required in recent comparable legislation.[48]

Grant rules and the assessment process

The Bill repeals and replaces Division 1 of Part 7 of the Act, providing for the grant of financial assistance for research programs. Notably, the Bill distinguishes between standard research programs and newly defined designated research programs, and provides for a separate approvals process for these research programs.

Making grant rules

Under the existing Act the CEO makes funding rules for grant programs which outline how researchers make applications for funding, the criteria these applications are assessed against, and how assessment decisions are made.[49] The CEO then presents the rules to the Minister, who must either approve the rules or send them back to the CEO to address specific concerns of the Minister.[50] Once approved, the rules are a legislative instrument but not subject to disallowance.[51]

The Bill proposes to transfer responsibility for the preparation of the rules from the CEO to the Board.[52] In addition, the Legislation (Exemptions and Other Matters) Regulation 2015 will be amended separately, so that the rules will be disallowable.[53]

In the consultation on the proposed changes, the Regional Universities Network was critical of the rules having the status of a disallowable legislative instrument, stating that this ‘introduces a risk of delays to, or political interference with, the operations of the ARC’.[54]

Assessment of grant applications

Researchers and research organisations submit applications for funding of research proposals based on the criteria outlined in the rules. The ARC then uses a rigorous process of peer review to assess the applications against the criteria.

The peer review process is guided by the College of Experts (CoE), which is currently comprised of 318 members who are experts of international standing in the Australian research community.[55] The CoE members are expected to take on roles as general assessors and Selection Advisory Committee (SAC) members, as well as assign work to the detailed assessors drawn from the wider Australian research community.

The assessment process includes a written assessment by ‘detailed assessors’ (typically at least 2) who are chosen for their relevant expertise. Applicants can respond to this assessment and their response, along with the written assessment, is considered by the ‘general assessors’ (at least 2). Based on the work of the detailed and general assessors, a ranking is formulated and provided to the Selection Advisory Committee (SAC), which discusses the applications and makes a recommendation to the CEO on the applications to be funded and the amount of funding to be provided.[56]

The CEO then considers the SAC’s recommendations and each application’s National Interest Test statement before submitting a list of research proposal applications that are recommended for funding (and the amount of funding) to the Minister.[57]

Formalising the College of Experts

As explained by the ARC Review, the CoE ‘was previously a Designated Committee with appointments made by the Minister under Part 4 of the ARC Act’, however, from around 2011 this practice changed to reduce the administrative burden.[58] The ARC Review notes that it has been argued that ‘the streamlined processes diminished the standing of the College and the oversight of their quality and relevance of the qualifications’.[59] The ARC Review recommended that the board approve the appointment of the CoE and have the ability ‘to establish and appoint members to other such committees as it deems beneficial for the effective functioning of the ARC’.[60]

The Bill establishes a formal requirement that the Board create a committee to be known as the College of Experts (CoE).[61] The Bill also provides for the Board to establish any other committees to assist the Board or the CEO in the performance of their functions.[62] The committees may consist of such persons, and on terms, as determined by the Board.[63] However, while the Board may abolish other committees, it cannot abolish the CoE.[64]

Approving research proposals and the ministerial ‘veto’

Under the ARC Act, the CEO (informed by advice from the CoE) provides a list of research proposal applications that are recommended for funding to the Minister.[65] The Minister must then approve each research proposal before it can receive grant funding.[66] The ability for the Minister to refuse to approve a research proposal, and thus deny it funding, has generally been referred to as the ministerial ‘veto’.

The existence of the ministerial veto has been the most contentious part of the current ARC Act. As described in the ARC Review, there have been instances where Ministers have refused to approve specific research proposals which had been recommended for funding by the CEO of the ARC:

Interventions were made by at least four Ministers on at least six occasions. These were: Ministers Nelson (2005, 2006), Birmingham (2017, 2018), Tehan (2020) and Acting Minister Robert (2021).

Apart from the interventions of Minister Tehan, which were for national security concerns, the recommended funding proposals were rejected reportedly on the grounds of poor value for money. At face value, the rationale of these interventions amounts to a lack of trust in the peer review process on the part of the Minister of the day, given extensive processes involve consideration of national benefit and value for money, alongside matters of academic excellence, the strength of the project, and its likelihood of success.[67]

The Review also described a lack of transparency in the instances where funding proposals were rejected due to national security concerns:

In 2020, 18 recommended funding proposals were referred to security agencies owing to national security concerns, with the Minister reserving his decision: 13 were eventually approved and 5 rejected. The actual process by which the assessment of security issues was made and the grounds for these grants being rejected was not clear in every case, inviting speculation that this was potentially another form of political interference rather than the proper exercise of ministerial oversight of national security.[68]

The use of the ministerial veto had led to frustration among parts of the research community. In 2022, in a joint statement responding to the then Acting Minister’s veto of 6 proposals, the Presidents of Australia’s 5 Learned Academies stated:

When the integrity of Australia's research system is compromised by perceived, or actual, political interference, there are real costs to the research sector and indeed the nation - as trust is eroded and the relationships researchers have with industry, the Australian community, and international partners are damaged.[69]

Additionally, in 2022, two members of the CoE resigned following the exercise of the veto by Acting Minister Robert. One of them, Professor Andrew Francis, stated:

It’s very difficult to be committing a lot of time to a process and asking other people to commit a lot of time and expertise they’ve garnered over decades to make very difficult judgements, [and then] have somebody who doesn’t know about the area make a snap judgement.[70]

The use of the ministerial veto also gained the attention of the international research community, with an editorial in one of the premier international science journals, Nature, arguing that the existence of the veto could ‘undermine the integrity of Australian science’.[71]

Many university and research community stakeholders have called for the adoption of the ‘Haldane Principle’ (or a similar principle) to guide research funding decisions.[72] The Haldane Principle provides that governments should set rules and structure for research funding but that ‘decisions on individual research proposals are best taken by researchers themselves through peer review’.[73]

ARC Review recommendations and the ministerial veto

The ARC Review recommended that grant approval powers (in most instances) be transferred from the Minister to a proposed ARC board (Recommendations 5 and 6).[74] The ARC Review considered that this would align with the research governance processes in other comparable countries, stating:

[T]he Panel advises that the global gold standard is that assessments of individual proposals must be based on expert review free of political interference. For example, the European Research Council (ERC) is composed of an independent Scientific Council, its governing body consisting of distinguished researchers, and an Executive Agency, in charge of implementation. This is enshrined in legislation in the United Kingdom and is the practice in all leading research agencies around the world …[75]

The Review’s recommendation includes provision for the Minister to direct the CEO to not fund, or recover funds from, a research program if the Minister becomes aware of national security concerns related to the program.[76] In these cases, the Review proposed that the Minister notify Parliament and/or the Parliamentary Joint Committee on Intelligence and Security.[77]

Ministerial veto powers as outlined in the Bill

The Bill proposes to transfer approval powers from the Minister to the Board for grants other than those relating to designated research programs.[78] The Explanatory Memorandum states that this change will ‘strengthen the overall integrity of the ARC funding system as the Board is expected to be best placed to draw on the unique expertise within the College of Experts, and other Board committees, to guide discreet strategic funding for programs’.[79]

In his second reading speech, the Minister stated that:

Over time [the requirement for the Minister to approve grants] has allowed political influence to seep into what should be an independent, peer reviewed process aimed at expanding our nation’s knowledge base. The establishment of the board as the approving body will get the politics out of this. It re-establishes peer review as the driving principle in grant approvals.[80]

The approval and veto powers of the Minister, however, are not wholly removed by the Bill. The Minister will retain powers relating to funding decisions on individual applications:

  • where the application is made for a grant under a designated research program
  • when the Minister has concerns related to the research program’s impact on security, defence, or international relations.

Designated research programs

Proposed section 48 outlines the process for the approval of grants under designated research programs.[81] For these programs, the Minister retains the power to approve applications which must meet the requirements of the relevant funding rules. Although the assessment process for these grants will be outlined in the rules, it is likely that this will resemble the existing process (that is, peer review of applications, followed by ARC recommendations and then approval by the Minister).

The Bill inserts a new definition of designated research program.[82] Designated research programs are defined as meaning 3 existing grant schemes within the Linkage Program:

  • the ARC Centres of Excellence scheme
  • the Industrial Transformation Training Centres scheme
  • the Industrial Transformation Research Hubs scheme.[83]

Additional research programs may be specified by the Minister in a legislative instrument.[84] The Explanatory Memorandum does, however, note that the Minister will approve ‘grants for designated research programs to recognise their role in creating research capability rather than programs that award individual grants’.[85]

The ARC Centres of Excellence scheme aims to establish ‘prestigious focal points of expertise through which high-quality researchers collaboratively maintain and develop Australia’s international standing in research areas of national priority’.[86] Relative to most ARC grant opportunities, the Centres of Excellence program provides large grants, with successful applicants being funded for between $1 million and $5 million every year for up to 7 years.[87] Grant opportunities are conducted approximately every 3 years and in the 5 funding rounds to date between 9 and 13 applications have been funded per round.[88]

The 2 other schemes sit within the Industrial Transformation Research Program. This program seeks to support ‘university-based researchers and industry to work together to address a range of priorities to transform Australian Industry’.[89] The 2 schemes provide up to $1 million per year for up to 5 years. The research hubs scheme focuses on partnerships with industry, while the training centres scheme focuses on Higher Degree by Research and postdoctoral training.[90]

Exemption for security, defence or international relations

The Bill provides the Minister with the power to refuse funding (and recoup funding where necessary) if the Minister considers a research proposal should not be funded for reasons relating to the security, defence or international relations of Australia.[91] Proposed subsection 55(1) specifies the matters the Minister must have regard to when making such a decision:

  • financial support from a foreign government body (para (a))
  • association with international tertiary education institutions (para (b))
  • associations with foreign governments, foreign law enforcement agencies, foreign military and intelligence agencies (para (c))
  • association with countries under sanctions from the United Nations or Australia (para (d))
  • association with entities proscribed in accordance with the Autonomous Sanctions Act 2011, which deals with persons and entities of international concern (due to issues such as proliferation of weapons of mass destruction or serious human rights abuses) (para (e))[92]
  • association with persons or entities proscribed in accordance with Part 4 of the Charter of the United Nations Act 1945 (relating to terrorism or assets relating to terrorism) (para (f)).[93]

The Minister may also ‘have regard to any other matters’ they consider appropriate.[94]

It is expected that applications for grant funding would rarely engage with paragraphs (c) to (f). However, international collaborations are widely encouraged across the research sector, permitted under many NCGP schemes, and supported by a range of bilateral agreements.[95] Moreover, the Bill amends the objects clause to provide that the ARC’s role includes supporting Australian universities to conduct research in collaboration with international partners.[96] Thus, many applications may engage with paragraphs (a) and (b), noting that it is the ‘nature and extent’ of the association that would need to be considered by the Minister.

Arguably, the drafting of proposed section 55 still allows the Minister a wide discretion to veto research proposals. Where the Minister does exercise this discretion, the Minister is required to provide a written statement of the decision to the Parliamentary Joint Committee on Intelligence and Security and table a statement of the decision in both Houses of Parliament.[97]

Revised funding arrangements

A move to annual appropriations

The ARC Act currently contains an annual funding cap (section 49) that must be amended annually to ensure future funding for the NCGP. The ARC Review noted that the annual Amendment Bill created an administrative burden and can ‘complicate management of the NCGP, especially in election years when the parliamentary calendar may be disrupted’.[98]

The Bill repeals and replaces the annual funding cap with an annual appropriation to be made to the existing ARC Research Endowment Account, as recommended by the ARC Review (Recommendation 9).[99] This is consistent with arrangements for the funding of medical research from the National Health and Medical Research Council’s Medical Research Endowment Account.[100] The Explanatory Memorandum notes that indexation based on the Consumer Price Index will be applied to annual appropriations to the ARC Research Endowment Account.[101]

The Bill also repeals section 50 of the ARC Act, which required the Minister to split NCGP funding between different research programs.[102] In practice, this required the Minister to assign what proportion of NCGP funding would be provided to each of the Discovery and Linkage programs. The removal of this requirement was recommended by the ARC Review under the proviso that a commitment to basic, investigator-led research be incorporated into the purposes of the ARC Act (see discussion above).[103]

Formalising requirements for funding agreements

The ARC Act currently stipulates the conditions of payment of financial assistance (section 58), and current ARC grant guidelines state that in order to receive a grant, the administering organisation must enter into a grant agreement with the Commonwealth (represented by the ARC).[104]

The Bill further formalises the funding process by repealing and replacing section 58 with a new requirement for a funding agreement to be made between the ARC and the research organisation receiving funding.[105] This funding agreement comprises the ‘terms and conditions on which a grant of financial assistance is to be made to an organisation’.[106]

The Bill also provides the ARC with the power to terminate a funding agreement, cease funding and, if necessary, seek repayment of funds in cases where there has been a breach of the terms and conditions of the funding agreement.[107]

The ARC must also cease funding a research program if the organisation is no longer involved or the lead researcher named in the agreement is no longer leading the project.[108] This suggests a varied or new funding agreement may be required if a lead researcher transfers to a new institution. The ARC Review reported that stakeholders:

questioned whether the requirements, for example to seek formal ARC approval for minor changes to personnel or to record movement of [Chief Investigators] between universities, merited the effort required. It also appears that the ARC’s capacity to provide timely responses to reported changes is overwhelmed.[109]

Transitional funding arrangements

The Bill allows for currently funded and approved research programs to continue under the existing arrangements for 12 months after the commencement of the Act.[110] Following 1 July 2025, they will transition to new arrangements, which will require a written funding agreement.[111]

Author acknowledgements: the authors thanks Dr Emily Gibson for her peer review of an earlier version of this digest.