Chapter 2Issues raised
2.1This chapter discusses evidence provided by stakeholders on the provisions of the bill. It first provides an overview of the general support for the bill, before discussing more specific comments received, including:
amendments to the object of the Australian Research Council Act 2001 (ARC Act), setting out the role and mission of the Australian Research Council (ARC) (Schedule 1);
the establishment of the ARC Board, including its membership, powers and relationship with its Chief Executive Officer (CEO) (Schedule 2);
new arrangements for the Board to approve funding for research under the National Competitive Grants Program (NCGP), except decisions for designated research programs made by the Minister, and the adequacy of current funding for delivery of ARC reforms (Schedule 3); and
other implementation-related matters, including concerns on transition arrangements, and the need for oversight and review.
2.2This chapter also sets out the committee’s views and recommendation.
General support
2.3Submitters were overwhelmingly supportive of the bill’s implementation of the recommendations of the ARC Review that require legislative change. The bill was seen as a positive step towards bolstering the independence of the ARC and supporting the research sector, even where potential amendments were flagged for consideration.
2.4For example, the Group of Eight (Go8), comprising eight Australian research universities which are major recipients of ARC funding, considered that the bill was ‘a timely strengthening of the operation and governance of the ARC’.
2.5Similarly, a number of higher education research institutions, organisations and professional representative bodies made individual submissions expressing general support for the bill.The University of Technology Sydney (UTS) expressed a sentiment common to many of these submissions, considering the bill as ‘broadly consistent’ with ARC Review recommendations, ‘and the government’s full acceptance of the recommendations’.
2.6Many of these institutions saw the bill as supporting positive change in the research sector. For example, the Western Sydney University submitted that many of the provisions of the bill represented a welcome ‘attempt at building on, and securing, Australia’s research capability’. Charles Sturt University considered that the bill would ‘[strengthen] the independence and governance of the ARC and support its mission to foster the best Australian Research’.
2.7Others commented that the legislation would remove political interference from ARC decisions. The Australian Academy of Technological Sciences and Engineering (ATSE) submitted that:
The ARC Review has provided a generational opportunity to reform the ARC to support a high-performing, diverse Australian research sector and reject ideological interference… These important changes to the ARC [from the government’s endorsement of its recommendations, including the bill] will enable it to be the backbone of Australian academic research.
2.8It was also noted that the Commonwealth had appropriately consulted the sector on proposed reform of the ARC and the bill’s development, and appropriately addressed many concerns that had been raised. For example, Universities Australia (UA) submitted that:
…[the bill] as currently drafted would largely deliver on the recommendations of the [ARC Review] and we are appreciative of how receptive Minister Clare, his office and his department have been to constructive feedback from the university sector.
Comments and concerns raised
2.9This section discusses the bill by schedule, noting both support for particular provisions alongside any comments or concerns raised by submitters. It then looks at some broader implementation issues that were also raised in evidence.
Object of the ARC Act (Schedule 1)
2.10The Explanatory Memorandum states that the bill would make amendments to the object of the ARC Act, which would provide a ‘stronger focus’ on the ‘impact and purpose’ of the ARC, including that it is intended:
…to establish a national body to, amongst other activities, support Australian universities in conducting excellent research, promote and conduct activities to shape and foster the national research landscape and community, and to administer funding to research programs that will result in economic, social and community outcomes for Australia. The ARC is committed to ensuring that support for academic career pathways is considered in its processes including consideration of equity and diversity in the research workforce and participation by all researchers, including First Nations peoples, women, and early and mid-career researchers.
2.11This was broadly supported by stakeholders, many of which noted the bill would fulfil recommendation 1 of the ARC Review. For example, the Regional Universities Network (RUN) commented that the amendments would ‘clearly strengthen and clarify the role’ of the ARC, and was pleased to see mention of the ARC’s role in facilitating Indigenous knowledge systems and ‘evaluating the excellence, impact and depth of Australian research’.
2.12A joint submission by Council of Australian Postgraduate Associations and the National Aboriginal and Torres Strait Islander Postgraduate Association (CAPA and NATSIPA) supported the inclusion of Indigenous knowledge systems in the object of the Act, but expressed concern that research was still classed as ‘medical and non-medical’, as some worthy projects may not be easily categorised:
…[there are] challenges faced in cross-disciplinary research that falls within a gradient that is seen as ‘not medical enough’ to be eligible for [National Health and Medical Research Council (NHMRC)] research grants but also considered ‘too medical related’ for the ARC grants.
2.13Some submissions flagged other matters that could be included as priorities in the ARC’s object, such as:
furthering ‘discovery research’ and research classed as ‘experimental development’;
supporting universities retaining excellent researchers, as part of ARC support for academic career pathways;
‘enabling leading research infrastructure’;
‘consideration of equity and diversity’ relating to research and the research workforce;and
incorporating the assessment of ‘national and collaborative research performance’ and ‘identifying gaps and weaknesses in in our national research capacity’ alongside the current stated object ‘evaluating the excellence, impact and depth of Australian research’.
2.14The Department of Education (the department) submitted that the revised object set out in the bill would fulfil a recommendation of the ARC Review, which found a need to establish ‘a clear and contemporary overarching purpose for the ARC’, rather than the current focus on its role processing grants:
The updated object in the Bill gives the ARC an invigorated strategic mandate to shape the national research landscape. It clarifies and confirms a broader focus for the organisation–from a dominant focus on management of the NCGP to the wider ambition of impact on economic, social, environmental, and cultural outcomes. It also provides a clear mandate for engagement with researchers and the broader community of interest.
Establishment of the ARC Board and governance arrangements (Schedule 2)
2.15The bill would establish an ARC Board to ensure ‘the independence and integrity of the ARC and its decision-making processes’. Board members, including the Chair, would be appointed by the Minister, and would be drawn from diverse backgrounds and skill sets relevant to the research sector, industry and governance.
2.16On the appointment of the Chair, the department submitted that ‘the Minister must be satisfied that the Chair has professional credibility and significant standing in one or more fields of research or in the management of research’.
2.17The bill stipulates that the Board would comprise a Chair, Deputy Chair, and up to five members. This must include a First Nations member, as well as a member to adequately represent regional, rural and remote Australia.
2.18The Board would be responsible for appointing the CEO, who is responsible for the ARC’s operations and assisting the Board in the execution of its functions, including grant funding decisions. The Board would also appoint members of the College of Experts, who provide advice on achieving quality research outcomes as part of the grant assessment process, as well as other committees it deems beneficial for its functioning.
Membership
2.19The creation of an ARC Board was supported by many submitters, who welcomed the requirement that it would represent a broad and diverse cross-section of relevant interests. It was noted that the inclusion of diverse members was necessary to ensure the integrity of the ARC’s decision making on research funding, as well as bolster its support for the research sector more broadly.
2.20The stipulation for a First Nations representative on the Board was welcomed by many submitters, as was the inclusion of a board member drawn from the regional and rural community.
2.21The Council for the Humanities, Arts and Social Sciences (CHASS) supported these provisions, but queried:
…why no specific provision is made for experience in the broad areas of research represented by the ARC. Specifically, there should be provision for expertise across [Humanities, Arts and Social Sciences (HASS)] and [science, technology, engineering and mathematics (STEM)] disciplines to ensure diversity in the Board's composition. This would be achieved by adding a provision: ‘ensuring that the members reflect the diversity of fields of research’.
2.22Similarly, Academics for Public Universities raised concerns that a requirement for ‘specific high-level academic expertise is missing from [the bill’s] proposed Board members’ skill set’ and highlighted potential pitfalls of non-academics assessing the viability and merits of research funding proposals.
2.23The NTEU noted that the Board could be required to have ‘an equal gender balance, and that disciplinary and geographical diversity also be considered’.
Size of the Board
2.24Some commented that the Board may be more effective and representative if it were larger than the planned maximum of seven members (including the Chair and Deputy Chair).
2.25The University of Tasmania summed up these concerns:
We suggest that the ARC Board represent a broader cross-section of expertise by expanding membership beyond 5–7 people. This would allow the Board to have a more balanced representation of gender, indigenous heritage, cultural heritage, sexual orientation, stage of academic career, and disciplinary expertise, including inter- and trans-disciplinary studies. The Board may also benefit from representatives of the end users of research, such as Local Government Associations, small-to-medium-sized enterprises, and those with experience in overseas funding agencies, to ensure the ARC is operating at world’s best practice.
Appointment and role of the CEO
2.26The appointment of the CEO by the Board was supported in a number of submissions.
2.27However, it was commented that legislation could clarify whether the CEO would be an ex officio member of the Board, and whether they would be required to attend Board meetings as recommended by the Review.
2.28The Australian Council of Deans of Science (ACDS) also commented that there should be a required number of Board meetings each year:
Additionally, we recommend that the legislation or Regulations should specify the number of Board meetings each year, with a requirement for a communique after each meeting to summarise activities and promote transparency. The previous advisory Council faced issues because it met rarely, and only at the CEO’s discretion, with no communication of discussions and outcomes.
ARC Advisory Committee
2.29The bill would also formally mandate the ARC Advisory Committee as part of the Act, to assist the Board to determine priorities, strategies and policies for the ARC. Some stakeholders considered that further guidance could be provided on its administration, including membership, appointments, remuneration, and how it operates with the ARC Board, CEO and Minister.
2.30ATSE recommended that the Advisory Committee could be tasked with periodically considering Australia’s research capability in critical disciplines, and ‘identifying areas of weakness that should be targeted for additional investment’, including ensuring priorities are aligned with National Science and Research Priorities.
College of Experts
2.31The College of Experts was generally seen as providing important support for the Board in its consideration of funding proposals. However, some submitters suggested that there should be a requirement for the Board to appoint members of the College of Experts consistent with the principle of sector diversity—as would be required in the selection of Board members.
2.32Dr Shumi Akhtar, an academic at the University of Sydney, commented that the selection process for the College of Experts ‘requires significant improvement’, to ensure that conflicts of interest were disclosed, and appropriate ‘due diligence in precenting nepotism, favouritism and bias in selections’.
Funding arrangements and decision making (Schedule 3)
2.33As noted earlier in this report, Schedule 3 of the bill sets out provisions for:
the ARC Board preparing funding rules (otherwise known as grant guidelines), and approving grant funding for programs—apart from designated research programs that are subject to Ministerial approval;
Ministerial powers to terminate funding approval ‘for reasons relevant to the security, defence or international relations of Australia’; and
changes to the funding of the ARC, from special appropriation to annual appropriation arrangements.
2.34The Explanatory Memorandum sets out the basic changes to funding arrangements that would be enabled by the bill:
Significantly, under the new arrangements, the Board will approve grants of financial assistance for research projects in relation to research programs under the [NCGP], except for decisions to approve grants of financial assistance for designated research programs which will be made by the Minister. Board decisions will be made in accordance with the funding rules made by the Minister and after considering advice following expert and peer review processes. This will better align the ARC’s funding of research to comparable research agencies within Australia and internationally, reflecting recommendation 5 of the Review.
Board funding decisions and funding rules
2.35Stakeholders overwhelmingly welcomed the ARC Board being responsible for most funding decisions.
2.36For example, the Go8 noted its long advocacy for this measure, which it saw as a ‘landmark’ achievement of the bill.
2.37More broadly, these new arrangements were seen as modernising the ARC’s processes, recognising its independence in making funding decisions, and removing the risk of Ministerial intervention in research funding.
2.38ATSE’s submission summarised its support for this aspect of the bill as follows:
These reforms directly address the issue of political interference with the ARC…ideological ministerial intervention has been corrosive for the research sector, and it is important to restore confidence by removing the veto except for under constrained circumstances.
2.39Funding decisions would be underpinned by funding rules prepared by the Board and approved by the Minister. As noted by the department’s submission, these rules would be disallowable legislative instruments, which will make them subject to Parliamentary scrutiny as part of the normal disallowance process.
2.40Some concern was expressed in relation to this process. For example, UTS commented that disallowance motions in Parliament could potentially slow down the finalisation of NCGP grants and burden the work of Parliament, while ‘also risking exposure to the political interference that the Bill is intended to avoid’. It advocated for a process whereby funding rules were not subject to disallowance, but would be:
…tabled in Parliament but not subject to disallowance…[which] would allow ongoing Parliamentary scrutiny of grant awards while not exposing the government of the day to the politicisation of the process.
2.41A significant number of submissions from academic institutions and groups expressed support for peer assessment as a crucial element of Board funding decisions. It was commented that the bill could be amended to include a stronger emphasis on ‘upholding the peer review process’ as an integral part of funding assessment processes. Indeed, some recommended amending the bill to make peer review a central and legislated part of the grant allocation process.
Ministerial funding decisions and powers
2.42Under the bill, Ministers remain the approving authority for ‘designated research programs’, including the ARC Centres of Excellence Scheme, Industrial Transformation Training Centres, and Industrial Transformation Research Hubs.
2.43The Joint Learned Academies suggested this was ‘commensurate with the scale and significance of these programs in supporting major research capability, as distinct from individual research projects’, which was broadly reflective of the views of other stakeholders.
2.44However, some called for greater clarity of definition of ‘designated research programs’ to make the distinction clear between programs supporting research capability, and individual research grants, and to future proof against Ministers resuming control of funding decisions for research grants.
2.45On the Minister’s limited power of vetoing research funding projects, the Explanatory Memorandum states that, following Recommendation 5 of the Review, the bill would:
…if there are reasons relevant to the security, defence or international relations of Australia that a grant to an organisation should not be approved, or should be terminated, the Minister is empowered to do so.
2.46It was broadly recognised that this Ministerial power was appropriate, and that the requirement to table a statement in Parliament within 15 days to detail the day of decision and the research program affected would increase transparency of decisions.
2.47However, some stakeholders considered that the bill should require that more detail be provided to impacted universities. For example, the Go8 recommended:
In the event the Minister vetoes or terminates research funding based on security, defence or international relations concerns, the impacted university should be afforded a briefing. If classified in nature, the university representative should have the appropriate security clearance.
2.48The Department of Education submitted that:
The exercise of this power will have significant consequences for an organisation. As such, it is appropriate for the Minister, as the relevant representative of the Commonwealth, to be empowered to make these decisions. It is expected that this power will only be exercised in relation to those organisations or research projects that have ongoing national security concerns or those specifically identified by Commonwealth entities as of concern.
Australian universities will continue to hold a primary role in identifying national security risks associated with grant applications and research, which are subsequently assessed by the ARC. Funding rules and program documentation, such as funding agreements, will clearly articulate university due diligence responsibilities.
Timeliness of funding decisions
2.49Some submitters commented that the research community would appreciate more predictable and timely funding decisions. For example, The University of Western Australia (UWA) suggested:
Presently the proposed Bill does not reference the timely approval of funding. UWA recognises the positive procedural changes the ARC has made to expedite the funding review and approval processes, and that the introduction of the new Board and associated approval powers will assist in this regard. However, the consequences of lengthy delays in funding processes have been well-documented in the Review, including the loss of highly talented academics and research staff across the sector. Sustainability of the research workforce is in the national interest. Accordingly, the Bill should include additional measures to ensure the timely processing of funding rounds to further prevent lengthy processing and delays.
2.50Science & Technology Australia commented that the requirement for the Minister to table funding decisions in Parliament may lead to unnecessary delays:
… the Minister must table a statement listing the successful grant organisations and projects within 15 sitting days of receiving these details from the ARC Board as a step in the right direction to improve grant processes.
However, given the gaps in the sitting calendar, if applicants must wait until this statement is tabled to learn the outcome of their grant proposals, it could still result in lengthy and unnecessary delays for applicants, which exacerbates job insecurity for Australia’s brilliant researchers – especially for early career researchers. Where a researcher is approaching the end of their current employment contract, they can be left stranded without a job or income while they await notification.
2.51Similarly, CAPA and NATSIPA commented:
… the research community would have benefited greatly if timely approval and announcement of grant outcomes were legislated, which would allow for better project planning and prevent grant outcome embargoes as experienced under the previous government.
Concerns on levels of research funding
2.52Some submitters called for the bill to include protections to funding levels, suggesting there had been a marked decline in levels of funding in real terms.
2.53For example, the Go8 provided an overview of this trend and its effects on the sector:
ARC funding has declined over the last decade. This has contributed to a drop in the proportion of basic research conducted by universities. This continues a trend over the last two decades which has seen university research effort dedicated to basic research drop from 55 per cent of total university research effort in 2000 to 37 per cent in 2020 (latest available figures).
2.54UWA also spoke to protecting levels of funding, citing the ARC Review’s recommendations:
The Review speaks to protecting funding available for basic research, yet there is nothing presently encapsulated in the proposed Bill that specifically protects basic research funding. Universities Australia have previously advised in a publicly released response to an earlier request for consultation of their concern that the lack of a protection mechanism in the proposed Bill, along with the retention of Ministerial approval for designated research programs, has the potential to further erode funding for basic research. This remains a major concern and further consideration should be given to specifying the extent or mechanism of protection.
2.55The NTEU commented that the bill includes ‘sensible measures that will simplify funding and appropriations processes’. However, it argued that the bill could strengthen provisions to protect basic research:
The greatest advancements in human knowledge come from basic blue skies research. The essential role of ARC in funding such research should be included in the Act via a minimum funding allocation for the Discovery programs. It should be noted that over the past decade the relative funding share allocated to Discovery has been above60% for almost the entire decade, making it relatively non-controversial to enshrine a 60% floor for the Discovery programs into the Act.
2.56The Go8 recommended a higher threshold, for the legislation be amended to require that ‘a minimum of 65 per cent of ARC funding be dedicated to basic research–through the Discovery or equivalent program’.
2.57The department stated in its submission:
The ARC will invest over $895 million in 2023-24 in non-medical research undertaken by the most dynamic researchers in Australia — a significant component of the Australian Government’s investment in research and development.
Concerns regarding ARC funding
2.58Schedule 3 of the bill also amends current ARC funding arrangements, moving them from the current ‘capped special appropriation’ to provision for annual appropriation. This, the Explanatory Memorandum notes, will further simplify funding arrangements, by ‘removing the requirement to divide funding between different categories of research programs’.
2.59Submissions generally supported the modernisation of funding arrangements for the ARC, but some concerns were raised. Most commonly, stakeholders suggested that the ARC would find it challenging to meet the costs of its expanded role and responsibilities from existing budget constraints.
2.60For example, UA noted that the Explanatory Memorandum identified a direct financial impact from the bill of $1.5 million to be met by existing funding levels. It observed that this would make it difficult to successfully implement the ARC’s expanded role under the bill, including fostering academic pathways and Indigenous knowledge systems, and supporting research integrity.
2.61Charles Sturt University summed up its concerns as follows:
The ARC’s range of responsibilities has expanded steadily in the more than 20 years since it was established as an independent statutory agency, and now includes the assessment of research excellence and impact, research integrity, and managing complex ethical issues, to name a few. Funding to the ARC’s operations has not kept pace with its expanding remit. The bill formalises many of these responsibilities and introduces some new ones (such as to ‘promote and conduct activities to shape and foster the Australian research landscape and community, including by supporting academic career pathways [and] expanding Indigenous knowledge systems’) again without ensuring the ARC has the funding it needs to do so.
2.62Several stakeholders suggested the bill include stronger provisions regarding the ARC’s budget, in line with the Recommendation 9 of the ARC Review. For example, UA argued that:
The Explanatory Memorandum does indicate that annual indexation will be applied (based on some variation of the Consumer Price Index) and with a ‘floor’ to guard against CPI fluctuations below zero. However, UA does not consider this a strong enough assurance and recommends the Government include a specific, simple indexation formula in the ARC Act itself.
2.63The department supplied a supplementary submission to clarify indexation arrangements. It noted that, in accordance with recommendation 9 of the Review, ARC funding would be delivered as annual appropriations through Budget Bill No. 1, and ‘indexed every year by CPI at each successive estimates update’.
2.64Given this, the department stated that indexing arrangements as a potential provision of the bill ‘is not necessary or relevant under annual appropriation arrangements, with the process for varying or indexing annual appropriations managed through the relevant Appropriation Bills’.
Comments on implementation and review
2.65Some submissions raised concerns about matters related to the implementation of the bill, including comments on potential pressures coming from meeting the cost of ARC reform within existing funding (as discussed above), as well as the need to clarify transition arrangements, and calls for a required review of the legislation’s operation, which are discussed briefly in this section.
2.66On transition arrangements, the Go8 noted that:
The ARC is currently operating under the direction of an Acting CEO. Given that one of the primary duties of the ARC Board is the appointment of the CEO, it is recommended that interim arrangements remain in place until the Board is established to appoint a substantive CEO.
2.67Additionally, the need for a review following implementation was flagged by several stakeholders. A review, it was argued, should be undertaken to assess whether the operation of the Board had been effective, and the appropriateness of its membership, composition and size. A range of timeframes were proposed, from ‘within 12months’ to 18 months following implementation.
2.68Several submissions noted that the interaction of ARC reform and other related initiatives should be considered as part of any review. For example, the ATN noted that any review should consider:
…how [the bill’s provisions] may intersect with the Accord Panel’s recommendations and the Government’s response regarding research funding and the establishment of a Tertiary Education Commission and its remit.
Committee view
2.69The government has introduced this bill to make long-overdue reforms to the ARC, in line with the recommendations of the recent independent review. These reforms will improve the ARC’s governance, ensure the independence of its funding decisions, and ensure it is better equipped to keep supporting Australian research and advising government.
2.70Evidence received in this inquiry overwhelmingly supported the bill’s intentions to implement the recommendations of the recent ARC Review. Stakeholders repeatedly recognised that the ARC is the central institution of the Australian research landscape, and considered that its reform and modernisation is essential for maintaining its important role as the chief source of support and funding for new research.
2.71The reforms proposed for amendments to the ARC's object were met with widespread approval from participants in the inquiry. These amendments are widely seen as fulfilling the Review’s recommendation for a clear and contemporary overarching purpose for the ARC, not only to recognise its role in funding research, but also as a central pillar of support the sector and a broader community of interest. This includes the object incorporating Indigenous Systems of Knowledge, and an increased recognition of the rich diversity of the research community.
2.72The creation of a diverse and representative ARC Board was seen as a positive step. Particularly welcome is the power to make research funding decisions for many grants programs, drawing on access to expert advice through the College of Experts and other committees.
2.73It was generally perceived that this new Board structure would increase the independence and integrity of the ARC and its funding programs, and ensure its decisions are protected from political interference and potential Ministerial intervention.
2.74It was also broadly supported that Ministers should have the power to cease funding for projects with potential negative implications for our national security, as well as being responsible for funding approvals for significant research programs. As outlined in evidence, these decisions would be made transparently, including through Parliamentary oversight, which would further bolster the ARC’s central role for the Australian research community.
2.75Some potential improvements to the bill were raised in submissions, many of which sought to improve the bill’s provisions, rather than question its intentions.
2.76This included suggestions on sharpening the object of the ARC Act, questions on requiring Board members to have adequate research sector experience, and ensuring selection of advisory roles is conducted effectively and transparently.
2.77Questions were also asked on whether the process of tabling funding rules would slow down the award of funds to successful projects, and on the timeliness of funding decisions more generally.
2.78Similarly, concerns were raised by several stakeholders over the adequacy of the ARC’s funding in the bill, including on indexation, as well as funding for its grant programs.
2.79The committee welcomed the department’s clarification of the implications of moving from a special to annual appropriations, including the relevant indexation arrangements, and the budget certainty that this will give the ARC into the future.
2.80However, the committee sees some merit in some of the suggestions that could improve the operation of the legislation. First, the committee recognises that many academic stakeholders considered the Board may be more effective, and representative of the sector and its diversity with more members than stipulated by the bill. Given the stipulations that members must include a First Nations representative, and someone to adequately represent regional, rural and remote Australia, there may be benefits in providing the Board some flexibility to ensure it can draw on a broad range of skills, experience and expertise.
2.81Second, it may be worth considering providing some clarification on the relationship of the CEO to the Board, particularly on the attendance of meetings and whether they would be an ex officio member of the Board.
2.82Lastly, on concerns raised regarding the implementation of the Board, it seems reasonable for a review of the Board’s effectiveness to be undertaken at an appropriate time after it commences its operation.
2.83While the committee makes no recommendations on some of these issues, there may be some merit for the consideration of several matters by the government and the Parliament, for either clarification in the Explanatory Memorandum or amendment of the bill.
2.84In closing, the committee considers that the bill will have a timely positive effect on the ARC and, in turn, strengthen the Australian research sector, and that the bill should be passed.
2.85The committee recommends that the bill be passed.
Senator Tony Sheldon
Chair
Labor Senator for New South Wales