Science and research

Budget Resources

Dr Robyn Prior

Funding trends

Australian Government research and development (R&D) expenditure is reported each year in the Science, Research and Innovation Budget Tables (SRI Budget Tables). These list programs and activities reported by departments and agencies on the basis that they were explicitly intended to support science, research or innovation (as defined in the OECD’s Frascati Manual and explained in the ‘Definitions’ tab of the SRI Budget Tables). Both R&D expenditure from departmental funds and R&D support from administered funds are included. The most recent SRI Budget Tables, published in April 2023, indicate that the government will invest $12.1 billion in R&D in 2022–23. This represents an increase of 3.2% on the previous year.

Similar to the 2021–22 financial year (p. 80), the largest components of government spending in 2022–23 are R&D tax measures in the business sector (26.1%), research block grants in the higher education sector (16.8%) and the Commonwealth Scientific and Industrial Research Organisation (CSIRO; 8.3%) (Sector: Table 1).

The SRI Budget Tables also provide data on government R&D spending as a proportion of Gross Domestic Product (GDP) in Australia. This enables comparisons across time. The Australian Government’s R&D expenditure in 2022–23 is forecast to be 0.49% of GDP (Figure 1). This is below the long-term average of 0.6% and is the lowest level since the beginning of the data series in 1978–79.

Upon release of the SRI Budget Tables, the Minister for Industry and Science Ed Husic noted that in addition to the $12.1 billion investment in R&D activities, the government is also investing about $1 billion in other science, technology, research and innovation-related programs and activities. This captures activities explicitly intended to support SRI activities and is separate from the reportable R&D investment.

Figure 1       Australian Government investment in R&D as a percentage of GDP

Notes: As stated in the source, figures are calculated using Australian Government investment in R&D (inflation adjusted, 2020–21 dollars) as a percentage of GDP (in current prices). The 2021–22 and 2022–23 calculations are based on forecast values of both expenditure and GDP.
Source: Department of Industry, Science and Resources (DISR), 2022–23 Science, Research and Innovation (SRI) Budget Tables, (Canberra: DISR, 28 April 2023), Sector: Table 6.

A commonly used measure to compare R&D spending between nations is the gross expenditure on R&D (GERD) as a proportion of GDP. GERD represents total R&D expenditure by the business, government, higher education and private non-profit sectors – it therefore includes more than just government expenditure and is not directly comparable with the figures above. Australia’s most recently reported GERD as a proportion of GDP is 1.79% for 2019–20, which is lower than the 2019 OECD countries average of 2.6%. An update to Australia’s GERD figures is expected in August 2023. The Minister for Industry and Science has acknowledged the long-term challenge of raising Australia’s investment in R&D (p. 7).

Recent reviews and initiatives

In September 2022, the minister announced plans to develop a contemporary national science policy framework, with an update of both the 2015 Science and Research Priorities and the 2017 National Science Statement. Following a consultation process, a revision of these priorities and the statement is expected by September 2023. Other reviews and initiatives include:

Budget measures

Minister Husic has stated that the 2023–24 Budget lays the ‘foundations for future economic growth in science and industry’. The budget focuses on a new Industry Growth Program, responsible for the development of quantum and artificial intelligence (AI) industries and support for local renewable technology manufacturing. The main science-specific budget measures are described below.

Strengthening Australia’s STEM Capabilities

The government is supporting and strengthening Australia’s capability, capacity and outreach in STEM through the provision of $132.7 million over 4 years from 2023–24 (and $17 million per year ongoing) (Budget measures: budget paper no. 2: 2023–24, p. 168). This measure, building on the 2022–23 October Budget measure ‘Supporting talent and leadership in Australian science and technology’ (p. 156), is offset by redirecting funds within the Industry, Science and Resources Portfolio.

Specific measures include $59.7 million over 4 years from 2023–24 (and $15.2 million per year ongoing) for infrastructure and ICT upgrades at Questacon in addition to continued STEM education and engagement programs. In the Questacon funding announcement in early May 2023, Minister Husic stated ‘Questacon plays an important role in the Australian Government’s mission to widen the pipeline of talent available to the science and technology sectors, and to reach 1.2 million tech-related jobs by 2030’.

The budget also provides $9.1 million over 4 years from 2023–24 for expert STEM policy advice through the National Science and Technology Council and the Science Meets Parliament program, as well as the promotion of STEM through the Prime Minister’s Prizes for Science.

Growing Australia’s Critical Technologies Industries

The ‘Growing Australia’s critical technologies industries’ budget measure provides $116 million over 5 years from 2022–23 to support the development of critical technologies, such as AI and quantum (Budget paper no. 2, p. 164). This budget measure will be fully offset by redirecting funding within the Industry, Science and Resources Portfolio.

Specific funding includes:

The first priority of the National Quantum Strategy is investment in R&D. In announcing the release of the Strategy the government confirmed that the $1 billion investment in critical technologies under the National Reconstruction Fund may include quantum. Expenditure from the National Reconstruction Fund is budgeted as investments, not payments; as such, they do not affect the underlying cash balance and will not be captured in the SRI Budget Tables.

Other measures

As announced on 19 April 2023, the Australian Institute of Marine Science will receive $163.4 million over 4 years from 2023–24 (and $43.5 million per year ongoing) to maintain its role as a world leader in marine science (Budget paper no. 2, p. 80). Funding includes $88.1 million over 4 years from 2023–24 (and $29.7 million per year ongoing) for a workforce increase and $40.4 million over 4 years from 2023–24 (and $11.2 million per year ongoing) to enhance science and technology capabilities and improve marine monitoring and data analysis activities. Following recent reports of unusable and unsafe facilities, the measures include support for office and laboratory upgrades and refurbishments, with $31.9 million over 4 years from 2023–24 (and $2.3 million per year ongoing). In addition, $3 million over 4 years from 2023–24 (and $0.3 million per year ongoing) will be provided for a replacement research boat.

The Australian Space Agency (ASA) will receive $34.2 million over 3 years from 2023–24 to support continuing core functions under a measure to refocus support for the civil space industry (Budget paper no. 2, p. 166). This measure indicates support for improving space activity regulation and funding programs that ‘support Australian space projects and remove cost recovery requirements’ but does not identify funding or further details.

As part of a realignment in spending across the portfolio, there is reduced funding for the Global Science and Technology Diplomacy Fund (Portfolio budget statement 2023–2024: budget related paper no. 1.11: industry, science and resources portfolio, p. 39).

The budget also includes several nuclear science-related measures, as described in the ‘Nuclear[PR(7] ’ Budget review article.

Stakeholder reaction

In its budget response, the Australian Academy of Science (AAS) welcomed the ongoing support for Australian science and research but described the overall science investment as ‘lamentable’. The AAS expressed disappointment in the reduced funding for the Global Science and Technology Diplomacy Fund.

The CEO of the Space Industry Association of Australia reportedly stated that the government is ‘defunding space programs without explanation’, with a spokesperson for Minister Husic quoted as saying:

[The][sic] budget included a $77m saving by terminating three small programs announced by the previous government shortly before the last election… These programs do not align with the Albanese government’s priorities and do not deliver value for money for the taxpayer. Of this saving, $34m was reinvested into core funding for the [ASA][sic] to put it on a sustainable footing, with $43m put toward budget repair.

The funding changes also follow a visit from the head of NASA in January 2023, who reportedly urged the government to provide more funding for the space sector.

The Group of Eight (comprising Australia’s leading research-intensive universities) has expressed concern over the inadequacy of support for research in the budget, but hoped the University Accord process and future budgets will ‘deliver on reform that will address the current distorted research funding model and lift Australia's expenditure on R&D as a percentage of GDP to, at the least, the OECD average’. Likewise, the Australian Academy of Technological Sciences and Engineering hope to see a commitment to lifting R&D funding to ‘international competitive levels’ in next year’s budget.

These comments are reflective of wider views on the need for more investment in research, including basic or foundational research, compared with research translation and commercialisation. In his 2023 State of the University Address, Nobel laureate and outgoing Vice-Chancellor of the Australian National University Professor Brian Schmidt also voiced concerns about investment in research, stating, ‘Australia's future is in peril unless it ramps up its investment in research... I hope Government will listen, and help engage business and philanthropy in the cause’.

Science & Technology Australia (STA) was also supportive of the combination of ‘thoughtful major reviews’ and strategic investments in science advice and frontier technologies, with an expectation of increased R&D investment following the completion of these reviews. STA President Professor Mark Hutchinson stated:

This Budget starts to roll out National Reconstruction Fund investments and the new Quantum Strategy with smart, deliberate funding to scale up promising early-stage science and tech industries. It highlights how the Government is leveraging its major reviews to inform its strategy, then investing where the expert advice sees the most potential for Australia. Over the next year, major reviews will shape the next phase of the strategy for the Government to start to dramatically escalate public investment in R&D to generate new breakthroughs, grow our STEM-skilled workforce, and secure Australia’s future economic prosperity.

 

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