Purpose of the Bill

The purpose of the Australian Research Council Amendment Bill 2021 (the Bill) is to amend the Australian Research Council Act 2001 (the Act) to apply an indexation rate to the current appropriations for Australian Research Council (ARC) funding programs for the financial years starting 1 July 2021, 1 July 2022 and 1 July 2023 and to insert a funding cap for the financial year starting 1 July 2024.

Background

The ARC was established as an independent Commonwealth entity under the Act.[1] The ARC advises the Australian Government on research matters and has responsibility for the Excellence in Research for Australia (ERA) initiative, which compares Australian university research against international benchmarks, creates incentives to improve research quality and identifies key emerging research areas.[2]

The ARC also administers the National Competitive Grants Program (NCGP), which supports fundamental and applied research, as well as research training.[3] The NCGP supports research across all disciplines except clinical and most other medical research, which is primarily supported by the National Health and Medical Research Council.[4]

Part 7 of the Act outlines how the ARC funds research projects and provides annual caps on the quantity of funds to be distributed by the ARC. Amending the annual funding caps is the primary focus of the Bill.

NCGP grant funding is allocated via a ‘competitive peer review process involving national and international assessors’.[5] The NCGP is comprised of two programs:

• the Discovery Program supports individuals and teams to undertake fundamental research. The Discovery Program includes: the Australian Laureate Fellowships; Discovery Early Career Researcher Award; Discovery Indigenous; Discovery Projects; and Future Fellowships.[6]
• the Linkage Program supports collaboration between university researchers and partners in business, government, community organisations, and other public research organisations. The Linkage Program aims to support the ‘transfer of skills, knowledge and ideas as a basis for securing commercial and other benefits of research’. The Linkage Program includes: the ARC Centres of Excellence; Industrial Transformation Research Program; Linkage Infrastructure, Equipment and Facilities; Linkage Projects; Linkage Learned Academies Special Projects; Special Research Initiatives; and Supporting Responses to Commonwealth Science Council Priorities.[7]

The Minister has responsibility for approving funding to research projects.[8] The Act, however, prescribes that the Chief Executive Officer (CEO) of the ARC must provide recommendations to the Minister on which research proposals should be approved and the quantity of the funding that should be provided to successful proposals.[9] Typically, the Minister approves the proposals recommended by the CEO, but the Minister may choose to reject recommended proposals. For example, in December 2021 the Minister rejected the recommendation to provide grants to six research proposals in the humanities.[10]

Reforms to the grant funding process

On 6 December 2021, a Letter of Expectations (the Letter) was sent from the Acting Minister for Education and Youth, Stuart Robert, to the ARC, outlining the actions the Government expects the ARC to undertake to support relevant Government policy directions.[11]

The Letter identified four areas for reform to be implemented by the end of 2022:

• supporting national priorities
• strengthening the National Interest Test (NIT)
• fast-tracking implementation of recommendations from the review of the ERA and the Engagement and Impact (EI) assessments
• enhanced organisational governance.[12]

As part of the supporting national priorities reforms, the Letter stated that at least 40 per cent of funding approvals by value should be for proposals under the Linkage Program. Additionally, at least 70 per cent of funding under the Linkage Program should be for projects that align with the Government’s six National Manufacturing Priorities.[13]

The Letter also asks the ARC to brief the Minister on options to expand the pool of people who participate in the College of Experts (who are involved in assessing grants) to include representatives from industry and other end-user groups.[14] Additionally, the Letter asks the ARC to establish an independently chaired committee to assist the CEO that should include representatives from industry and other research users. The committee should have ‘Terms of Reference (ToRs) that support ongoing reform of ARC operations and a focus on driving impact from publicly funded research in Australia's universities’.[15]

Some stakeholders have expressed concerns regarding the impact of these proposed reforms. For example, the Australian Academy of the Humanities stated that the changes to the Linkage Program pose a ‘risk to the strength of the broader research system by skewing ARC funding so substantively towards applied research aligned to a narrow set of priorities’.[16]

The Academy of the Social Sciences in Australia (ASSA) also expressed concerns with the changes to the Linkage Program, highlighting that other funding programs already provide significant support to research aligned with the National Manufacturing Priorities.[17] The ASSA also questioned the value of adding non-academic members to the College of Experts, stating:

Perhaps the most serious concern is the proposal to alter (and potentially dilute) the long-established mechanism of peer-review by including non-research experts through membership of the ARC College of Experts.

Academic research throughout the world is built on a foundation of review of research outputs and funding applications by those best able to evaluate the methodology, the knowledge context and the research claims.

Non-experts – even highly qualified and experienced researchers in different fields – simply lack the knowledge required to evaluate such research and, in the context of funding applications, to determine whether it is appropriately designed and resourced, and whether it adds appropriately and usefully to the existing body of knowledge.[18]

Committee consideration

Senate Standing Committee for Selection of Bills

At the time of writing, the Senate Standing Committee for Selection of Bills had deferred consideration of the Bill to its next meeting.[19]

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 Universities Australia, Science and Technology Australia, and the academies representing science, humanities, social sciences, and technology and engineering do not appear to have commented on the Bill.

Financial implications

The Bill results in an additional appropriation of $843.67 million over four years.[20] The majority of this funding ($811.17 million) is due to the addition of the financial year commencing 1 July 2024 to the forward estimates.[21] The remainder of the additional appropriation is due to increases in the funding caps for the three financial years commencing 1 July 2021, 1 July 2022 and 1 July 2023 (a total increase of $32.5 million).[22]

The additional appropriation does not affect the substance of the Act, nor give extra money to a government agency; it only adds to the special appropriation administered by the ARC for the purpose of funding research. The proposed changes in funding are detailed in Table 1.

Table 1: Proposed changes to appropriation caps

Source: Australian Research Council Act 2001, section 49 and Australian Research Council Amendment Bill 2021, 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 as it does not raise any human rights issues.[23]

The Parliamentary Joint Committee on Human Rights had no comment on the Bill as it considered it did ‘not engage, or only marginally engage, human rights; promote human rights; and/or permissibly limit human rights’.[24]

Key issues and provisions

The Act is updated, usually annually, to apply indexation to the funding caps and to add an additional year to the forward estimates funding period. The Bill alters the administered special appropriations but does not alter the substance of the Act.[25]

The proposed changes to the funding cap are outlined in Schedule 1 of the Bill. Item 1 adds the financial year starting 1 July 2024 to subsection 48(2) of the Act, while Item 5 provides the funding cap for that year. Items 2 to 4 outline the proposed changes to the funding caps for the years starting 1 July 2021, 1 July 2022 and 1 July 2023, as detailed in Table 1.