Purpose of the Bill

The purpose of the Australian Research Council Amendment Bill 2019 (the Bill) is to amend the Australian Research Council Act 2001 (the Act) to apply indexation to the appropriation amounts for approved research programs for the three financial years starting 1 July 2019 to 1 July 2021 and insert a funding cap for the financial year starting on 1 July 2022.

Background

The Australian Research Council (ARC) is an independent Commonwealth body which was established in 2001 through the Act.[1] As the main Commonwealth research support body, it aims:

... to grow knowledge and innovation for the benefit of the Australian community through funding the highest quality research, assessing the quality, engagement and impact of research and providing advice on research matters.[2]

The ARC is the Government’s main source of advice on investment in Australian research, in addition to providing the Government with advice on general research issues. The ARC also provides evaluation of research through Excellence in Research for Australia (ERA).[3] ERA ‘identifies and promotes excellence across the full spectrum of research activity in Australia’s higher education institutions’, including through comparison with international benchmarks.[4]

The ARC administers funding for both primary and applied research in all areas through the National Competitive Grants Program (NCGP; however, the majority of medical research funding is administered through the National Health and Medical Research Council). There are currently two programs in the NCGP: the Discovery and Linkage Programs. The Discovery Program focuses on research by individual researchers and small teams of researchers while the Linkage Program encourages research ‘links’ between higher education institution researchers and industry, business and other research partners.[5] The grants are awarded competitively through a peer assessment process.[6]

The Act provides the financial assistance required for the ARC to administer the NCGP. It does this by providing annual funding caps for the approved research.[7] The Explanatory Memorandum states that applying indexation to annual appropriation amounts and inserting funding for additional years are ‘essential as the ARC Act is the legislative basis that supports the financial operations of the ARC research programs through special appropriation mechanisms which must occur each financial year’.[8] The Bill therefore ensures ‘the ARC can play its role in supporting and expanding Australia's research strengths’[9] and the continuation of ‘high-quality research needed to grow knowledge and innovation for the benefit of the Australian community’.[10]

Committee consideration

Senate Standing Committee for Selection of Bills

The Senate Standing Committee for the Selection of Bills recommended that the Bill not be referred to a committee for inquiry.[11]

Senate Standing Committee for the Scrutiny of Bills

At the time of writing, the Senate Standing Committee for the Scrutiny of Bills had not yet reported on the Bill.

Policy position of non-government parties/independents

At the time of writing, non-government parties and independents do not appear to have commented on the Bill.

Position of major interest groups

At the time of writing, major interest groups such as the Australian Academy of Science, Science and Technology Australia, and Group of Eight Australia do not appear to have commented on the Bill.

Financial implications

The Bill results in an additional appropriation of $829.052 million over four years from 1 July 2019.[12] The additional appropriation does not affect the substance of the Act nor give extra money to a Government department; it only adds to the special appropriation administered by the ARC for the purpose of funding research. The proposed changes in funding are in Table 1.

Table 1: proposed changes in appropriation caps

Source: Australian Research Council Act 2001, section 49 and Australian Research Council Amendment Bill 2019, Schedule 1.

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.[15]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Parliamentary Joint Committee on Human Rights had not yet considered the Bill.

Key issues and provisions

Schedule 1 contains three items. Part 7 of the Act covers research funding, with Division 1 of Part 7 outlining financial assistance for approved research programs. Section 48 of the Act then contains the years to which Division 1 applies. Item 1 inserts a proposed paragraph at the end of subsection 48(2) of the Act. Proposed paragraph 48(2)(s) adds the financial year starting 1 July 2022. This will allow Division 1 of Part 7 of the Act to apply to the additional financial year, 2022–2023.

Items 2 and 3 of the Bill relate to section 49 of the Act, which specifies annual caps on the total approved amounts of research funding. Item 2 omits ‘$771,932,000’ in paragraphs 49(t), (u) and (v), substituting it with ‘$786,212,000’. This deletes the current funding cap and replaces it with a new, higher funding cap of $786,212,000 for the financial years beginning 1 July 2019, 1 July 2020 and 1 July 2021, respectively. Item 3 adds proposed paragraph 49(w), which inserts a new financial year starting 1 July 2022 with a funding cap of $786,212,000. This gives the same new higher funding cap to the additional financial year. In the second reading speech for the Bill, the Minister for Education, Dan Tehan, stated that the increase to funding caps in the Bill ‘provides for anticipated inflationary growth’.[16]