Key points

• The Higher Education Support Amendment (Australia’s Economic Accelerator) Bill 2022 (the Bill) amends the Higher Education Support Act 2003 (HESA) to enable grants to be paid to universities and other eligible bodies through the National Industry PhD Program and Australia’s Economic Accelerator (AEA) program.
• The Bill also details administrative arrangements for the AEA program, including an Advisory Board, research commercialisation strategy, an investment plan, and annual reporting requirements.
• The Bill also creates an offence under HESA for disclosure of AEA information to unauthorised parties.
• A Bills Digest was created for a Bill identical to this which lapsed at the close of the 46th Parliament. This Bills Digest draws heavily from the previously produced Bills Digest authored by Dr Hazel Ferguson.

Introductory Info

Date introduced: 1 December 2022
House: House of Representatives
Portfolio:  Education
Commencement: The day after the Act receives Royal Assent.

Purpose of the Bill

The purpose of the Higher Education Support Amendment (Australia’s Economic Accelerator) Bill 2022 (the Bill) is to amend the Higher Education Support Act 2003 (HESA) to enable grants to be paid to universities and other eligible bodies through the National Industry PhD Program and Australia’s Economic Accelerator (AEA) program.

The Bill also details administrative arrangements for the AEA program, including an Advisory Board, research commercialisation strategy and investment plan, and annual reporting requirements. The Bill also creates an offence under HESA for disclosure of AEA information to unauthorised parties.

Structure of the Bill

The Bill has one schedule, which contains amendments in three key areas:

1. Amendments to subsection 41-10(1) to enable the grant provision arrangements for the National Industry PhD Program and Australia’s Economic Accelerator (AEA) program.
2. Proposed Division 42 establishes the AEA program, its research commercialisation strategy and investment plan, and AEA Advisory Board and its administrative arrangements.
3. Proposed Division 181 creates an offence under HESA for the disclosure of AEA information to unauthorised parties.

Background

Australian Government expenditure on research and development

In 2021–22, Australian Government expenditure on research and development (R&D) was $11.8 billion across 12 different portfolios. This includes major investments in national science research centres and agencies such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and business support through the R&D Tax Incentive, as well as support for university research, which is the subject of this Bills Digest.

As shown in Table 1 below, the forecasted 2021–22 expenditure is slightly below 2020–21 expenditure in nominal terms, but otherwise above recent years.[1] Despite this, spending has not kept pace with growth in gross domestic product (GDP), with R&D expenditure reaching a low of 0.51% in 2019–20, the lowest recorded since the beginning of the data series in 1978–79, with some limited recovery since.

Table 1:     Australian Government research and development expenditure and percentage of GDP, years ending June 2014–2022 ($ million)

	2014	2015	2016	2017	2018	2019	2020	2021 (estimated actual)	2022 (budget estimate)
R&D expenditure (nominal)	9,838.0	9,781.2	9,593.2	9,517.3	10,255.9	9,968.2	10,321.3	12,016.0	11,831.8
R&D expenditure (inflation adjusted, 2019–20 dollars)	10,848.4	10,844.4	10,694.1	10,229.4	10,818.0	10,167.5	10,321.3	11,694.4	11,573.0
Nominal expenditure as a percentage of GDP	0.62	0.60	0.58	0.54	0.55	0.51	0.52	0.58	0.56

Source: Department of Industry, Science, Energy and Resources (DISER), Science, Research and Innovation (SRI) Budget Tables, Sector Table, (Canberra: DISER, 17 December 2021).

Australian Government funding for university research

The dual funding system

Undertaking research is a condition of registration as an Australian university. The contribution to this investment from the Australian Government is provided through a ‘dual funding system’, comprising:

• performance-based research block grants (RBGs), made up of:
  • the Research Training Program (RTP), which supports research training through research student stipends and tuition fee offsets and
  • the Research Support Program (RSP), which supports the systemic costs of research, including the indirect costs of competitive grants, through a general grant to universities and
• national competitive grants for research programs, projects or fellowships, such as those provided by the National Health and Medical Research Council (NHMRC) and the Australian Research Council (ARC).

As shown in Table 2 below, Government investment in university research has been relatively static in recent years, except for a one-off increase in RBG funding in 2020–21 ‘to safeguard Australia’s research sector against the impacts of the COVID-19 pandemic’ (Parliamentary Library, Budget Review 2020–21, p. 42-3). In 2021–22, funding is estimated to return to just above 2019‑20 levels.

Table 2:     Australian Government higher education research expenditure, years ending June 2014–2022 ($ million)

	2014	2015	2016	2017	2018	2019	2020	2021 (estimated actual)	2022 (budget estimate)
ARC	883.3	852.9	815.3	743.7	758.0	753.4	762.5	806.4	814.6
NHMRC	640.3	677.8	615.0	627.9	635.6	630.5	671.7	664.1	647.9
RBG	1,685.7	1,755.9	1,829.9	1,777.9	1,943.2	1,921.1	1,938.4	2,973.3	1,999.8
Other	275	230.9	230.3	229.3	236.6	242.1	238.5	260.7	259.2
Total	3,484.30	3,517.50	3,490.50	3,378.80	3,573.50	3,547.00	3,611.10	4,704.50	3,721.50

Source: DISER, Science, Research and Innovation (SRI) Budget Tables, Sector Table, (Canberra: DISER, 17 December 2021).

Funding for research collaboration and translation

University-led research collaboration and translation (which involves putting research insights into practice, such as moving ideas from the lab to the clinic in medical research) is supported via several mechanisms in the dual funding system. These include:

• The ARC Linkage program funds university-led research collaborations with business, community organisations and publicly funded research agencies through sub-schemes such as:
  • Linkage Projects funding of $50,000 to $300,000 per year for two to five years supports the or development of research collaborations which serve as a basis for skills and knowledge transfer and
  • ARC Centres of Excellence funding of $1 million to $5 million per year for up to seven years supports significant collaborations in areas of national priority that maintain or develop Australia’s international standing in that area.
• The NHMRC supports collaboration and translation of health and medical research through, for example:
  • Development Grants, which support researchers to undertake health and medical research at the proof-of-concept stage (that is, testing to determine if an idea is practically feasible) with the aim of achieving a commercial outcome within a foreseeable timeframe and
  • Partnership Projects, which support researchers and policy makers to work together on research questions, research, interpret findings and implement findings into policy and practice.
• The RBG programs also incentivise collaboration through funding formulae that include, among other measures, engagement income (that is, research income earned from projects with non‑university public sector bodies and industry).

In addition, universities receive funding from Government programs for industry-led research. Most important among these is the Cooperative Research Centres (CRC) Program. The CRC Association states that its members ‘represent an estimated $4 billion in collective investment in innovation and commercialisation by industry, universities and other research institutions, and the Australian Government’ (p. 1). The CRC model provides both Centre (up to 10 years) and Project (up to three years) funding, allowing for longer-term as well as short-term collaborations, which are easier for small to medium enterprises (SMEs), which make up a high proportion of Australian businesses, to engage with.

However, while playing an important role in fostering collaborative research activity and translating research into practical outcomes, the CRC Program is not as prominent in the university research funding system as programs designed to support university-led research such as those through the ARC and NHMRC. In contrast to the figures shown in Table 1, in 2021, universities received $115.6 million through the CRC program, $71.2 million of this from the Australian Government, $32.9 million from industry, and the remaining $11.6 million from other sources.[2]

Total higher education sector research and development expenditure

Total expenditure and source of funds

Australian Government funding for higher education research remained relatively static between 2018 and 2020, as did higher education expenditure on R&D (HERD)— with the latter increasing by just $0.6 billion, from $12.2 billion to $12.8 billion (Table 3 below).

The latest statistics from the Australian Bureau of Statistics (ABS) estimate that HERD accounts for approximately one third of gross expenditure on research and development (GERD) in Australia (HERD was $12.7 billion for the 2020 calendar year, and GERD at $35.6 billion in 2019–20).

Types of activity and main fields supported

Higher education sector R&D investment represents a mix of basic and applied research and experimental development (Table 3 below) and in 2020 was concentrated in biomedical and clinical sciences (29.2%), engineering (15.9%), health sciences (13.1%) and biological sciences (10.0%), with all other fields receiving less than 7% of total investment each.

The proportion of expenditure distributed between pure basic and applied research has remained relatively stable since 2014, while experimental development has attracted a slightly increased share of spending, and strategic basic research has seen a fall. In 2020, applied research accounted for 52.3% of spending ($6.7 billion), while pure basic research accounted for 20.3% ($2.6 billion), strategic basic research accounted for 17.2% ($2.2 billion), and experimental development 10.2% ($1.3 billion).

Table 3:     Higher education expenditure on R&D by type of activity, 2018–2020 ($ billion)

Type of activity	Activity definition	2018	2020
Pure basic research	Research for the advancement of knowledge, without seeking long-term economic or social benefits or making any effort to apply the results to practical problems or to transfer the results to sectors responsible for their application.	2.8 (22.8%)	2.6 (20.3%)
Strategic basic research	Experimental and theoretical work undertaken to acquire new knowledge directed into specified broad areas in the expectation of practical discoveries.	2.2 (17.8%)	2.2 (17.2%)
Applied research	Original investigation undertaken to acquire new knowledge directed primarily towards a specific, practical aim or objective.	5.9 (48.4%)	6.7 (52.3%)
Experimental development	Systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.	1.3 (11.0%)	1.3     (10.2%)
Total		12.2	12.8

Source: ‘Research and Experimental Development, Higher Education Organisations, Australia, 2020’, Higher education expenditure on research and development (HERD), HERD, by source of funds (a), Australian Bureau of Statistics (ABS).

Note: Figures are not adjusted for inflation. Figures may not sum due to rounding.

Recent Australian Government research policy

Low levels of research-industry collaboration

Australian Government R&D policy has long been characterised by efforts to address low levels of research-industry collaboration, with the aim of increasing innovation and driving productivity gains. However, over the last four decades, innovation policy initiatives have, for the most part, either focused on supporting short-term projects or single fields of research or been discontinued before long-term outcomes could be realised. As a consequence, despite some stand-out exceptions:

There is still quite limited knowledge and understanding in Australia of what drives success in terms of governance and leadership, organisational frameworks, systems and processes, and relationships with a host university. A visionary strategy is vital, but unless the management framework, including shared interests and incentives for collaboration, is given appropriate attention, achieving outcomes will continue to be a challenge.

For 2019–20 Australia’s gross expenditure on R&D as a share of Gross Domestic Product (GDP) was 1.79 percent, below the OECD average of 2.48 percent. Australia’s investment in R&D as a share of GDP was at its highest in 2008–09 where it peaked at 2.25 percent and has been declining ever since.

Coalition Government policy 2013–2019

In late 2014, the newly elected Coalition Government’s response to the collaboration deficit began with the release of the Boosting the Commercial Returns from Research (BCR) discussion paper, as part of its ‘Industry Innovation and Competitiveness Agenda’.

The discussion paper cited insufficient knowledge transfer between researchers and business as a key driver of a lack of research commercialisation, arguing that addressing this issue would ‘…help drive innovation in Australia, grow successful Australian businesses, and boost productivity and Australia’s exports, ensuring the competitiveness of the Australian economy into the future’ (p. 2).

The paper canvassed a range of options, including changes to university research policy and funding. Consideration was given to the RBG funding formulae, research training, ARC grants assessment, and intellectual property (IP) arrangements, and work on an assessment of engagement and knowledge transfer, to better support, recognise and incentivise industry engagement by university researchers.

In July 2015, the Review of Research Policy and Funding Arrangements (the Watt Review) was commissioned to consider arrangements for university research in greater depth, including the RBG programs, competitive grants, and business collaboration programs. The Watt Review recommendations, released in November 2015, covered similar ground to the BCR discussion paper, detailing proposed changes to RBG programs, competitive grants, IP arrangements, and research assessment, as well as additional funding for collaboration with business.

In December 2015, the $1.1 billion National Innovation and Science Agenda (NISA) was launched. Engagement and Impact (EI) Assessment and continuous submission and assessment for Linkage Projects were also introduced through the ARC to better meet the requirements of industry and community partners. For universities, NISA built on BCR and the Watt Review, and included changes to research funding arrangements for universities. From 1 January 2017, six RBG programs were consolidated into the current RSP and RTP, with more emphasis on engagement income in the funding formulae. The EI Assessment was new, while the other changes were revisions of existing programs.

In the years following NISA, some growth in commercialisation of publicly funded research is evident, as shown in Table 4 below. However, it is important to acknowledge that this is not necessarily attributable to NISA. During this time, universities continued to receive research funding from other Government sources and devote significant additional resources to research, as discussed above. Continuous assessment of Linkage Projects was amended in 2020 in response to an evaluation which found the process did not appear to have ‘incentivised increased participation by business and industry partner organisations’. Ultimately, the departments with leadership of NISA stated that the total package was too small, and its measures too disparate, for their economy-wide impact to be adequately evaluated against the Government’s stated goals (p. 27).

Table 4:     Research commercialisation outcomes, 2017–2020

	2017	2018	2019	2020
Invention disclosures	1263	1362	1355	1393
New non-patented IP	294	330	363	261
New patent applications	454	428	455	427
New licences, options, and assignments	588	567	609	626
New spinouts and start-ups	43	48	42	54
Active spinouts and start-ups	199	217	231	256
Equity held by research organisations in spinouts and start-ups	$146 M	$178 M	$262 M	$555 M
Commercialisation revenue	$452 M*	$119 M	$179 M	$242 M

Source: Knowledge Commercialisation Australasia (KCA), Survey of Commercialisation Outcomes from Public Research 2020 Report (Melbourne: KCA, 9 September 2021), 7–8.

Notes: This data is from up to 25 universities, 10 medical research institutes, the Australian Nuclear Science and Technology Organisation (ANSTO), the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Meat and Livestock Australia Limited (MLA) and the Grains Research and Development Corporation (GRDC). 2017 to 2019 data is based on 34 respondents, and 2020 data is based on 39 respondents. Not all respondents reported data for all measures.

* The 2017 commercialisation revenue figure is an outlier due to $325 million received by the Walter and Eliza Hall Institute of Medical Research from the partial sale of royalty rights in anti-cancer treatment venetoclax—a result of collaboration with companies Genentech and AbbVie.

Coalition Government policy from 2020

The year 2020 marked a turning point for the higher education sector, with declining international student numbers due to COVID-19, and the announcement of the Job-Ready Graduates Package, which aimed to align funding for domestic students more closely with the cost of delivering services from 2021. Both changes likely reduced the additional revenue available for R&D investment by the higher education sector from general university funds, which depend heavily on student fees.

In response to the pandemic, the 2020–21 Budget provided a one-off increase in RSP funding for 2021, but also signalled the Government’s continued focus on research collaboration and commercialisation. The balance of funding for the ARC’s Discovery and Linkage research programs changed from 64:36 to 60:40 (that is, a greater proportion of ARC research grants funding than previously expected would go to Linkage, which funds collaborative research). Additionally, $5.8 million was provided to scope a University Research Commercialisation Scheme, discussed in the next section of this Digest.

In December 2021, in a letter to the Chief Executive Officer (CEO) of the ARC, Stuart Robert, the Acting Minister for Education and Youth, reiterated the importance of 40% of ARC grant funding being allocated to Linkage, and asked the ARC to:

• bring forward a proposal ‘to enhance and expand the role of the industry and other end-user experts in assessing the NIT [National Interest Test] of high-quality projects’ and
• ‘review the operation of the College of Experts and brief me on options for expanding the pool of people who participate in the College to include experts from backgrounds beyond universities, in particular those from industry and other end-user groups’.

University Research Commercialisation Action Plan

On 1 February 2022, the former Prime Minister announced a University Research Commercialisation Action Plan (the Plan), which outlines a package of measures pursuant to increasing university’s commercial research outcomes.

The Plan is the outcome of the scoping work announced in the 2020–21 Budget consultation, undertaken from February to April 2021, which included a consultation paper, 14 expert panel meetings, 80 round table and other discussions, five international bilateral discussions, 15 analytical studies, and 171 public submissions. According to the Department of Education:

93 submissions emphasised the importance of focusing on national priorities in driving a focus on research commercialisation, while 88 submissions endorsed a stage-gated approach to funding projects along the technology readiness level (TRL) scale.

Improving university-industry collaboration more generally was emphasised as being vital to supporting research commercialisation, with university researcher incentives and Intellectual Property suggested as key areas for improvement.

Most agreed that there is no ‘silver bullet’ solution to improving research commercialisation outcomes, and that new reforms need to be integrated across the whole research commercialisation ecosystem.

The Plan, detailed in the University Research Commercialisation Action Plan paper, comprises:

• the Trailblazer Universities Program to support select universities to work on research commercialisation with industry partners—this program was announced in November 2021, ahead of the rest of the Plan
• the AEA program, the centrepiece of the Plan, a stage-gated program dedicated to funding translation and commercialisation in the six National Manufacturing Priority areas, as well as the expansion of the CSIRO Main Sequence Venture Program
• Industry PhD and research fellowship schemes, which aim to change promotion and reward n universities, and enable more mobility between universities and other research employers and
• a new IP framework for universities, including standardised terms, clauses, and agreements for collaboration on IP licensing, options, and assignment, which is now in place.

Please note: this Bill only deals with arrangements for the AEA program, and funding for Industry PhDs through the National Industry PhD Program.

The National Industry PhD Program

According to the Department of Education:

The National Industry PhD Program will support PhD candidates to undertake industry-focused research projects and be equipped with the knowledge and skills to better translate university research into commercialisation outcomes. Upon completion, candidates will have the ability to work at the interface of research and industry, and across the sectors in future.

The Program consists of two streams:

Industry Linked PhD stream: This stream is for outstanding PhD candidates to undertake research projects co-designed by university and industry, with opportunities to be embedded in an industry setting and participate in a 12-week training program.

Industry Researcher PhD stream: This stream is for highly capable industry professionals who are supported by their employers to undertake PhD projects in partnership with a university while retaining industry employment and salary benefits.

The AEA Program

Although the Australian Government already provides some research collaboration and translation funding, what distinguishes the AEA program is its specific focus on the ‘valley of death’:

Promising early-stage university research is frequently not progressed to later stages of development. Businesses cannot justify investment in these projects given the relative risk of investing during the early stages of development; and current funding programs for universities are directed towards discovery. This results in a gap in funding for this development work and consequently a gap in taking promising opportunities to commercial readiness. (Action Plan, p. 50)

The details of the program are set out in the Other Grants Guidelines (Research) 2017, but broadly:

Grants under the AEA program are available in two stages. Stage 1 grants are for proof-of-concept (Technology Readiness Level 3-5) projects. Up to $500,000 is available per project. Projects must be completed between 3 months to 1 year from the project’s commencement. Stage 1 applications must demonstrate some industry engagement, which may include matched funding or in-kind support.

Projects with commercial investment partners will be prioritised.

Stage 2 grants are for proof-of-scale (Technology Readiness Level 5-7) projects. Up to $5 million is available per project. Projects must be completed between 3 months to 2 years from the project’s commencement. Stage 2 applications must demonstrate a formal partnership and committed co- investment from an industry partner.

Up to $500,000 is available per Stage 1 project and up to $5 million is available per Stage 2 grant.

Applications for the National Industry PhD Program will open in 2023, with the Program commencing from 1 July 2023.

Committee consideration

Senate Standing Committee for the Selection of Bills

The Selection of Bills Committee in its Report No. 8 of 2022 deferred consideration of the Bill until its next meeting.

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills reported on the lapsed version of the Bill, which is identical to the current version of the Bill, in its second Scrutiny Digest of 2022.

The Scrutiny of Bills Committee expressed some concerns that the research commercialisation strategy and the investment plan for the AEA program will not be legislative instruments. The Scrutiny of Bills Committee sought advice from the Minister on why this is the case and whether the Bill could be amended to ensure parliamentary oversight and at minimum require tabling of the documents in both Houses of Parliament within 15 sitting days of ministerial receipt of the strategy or finalisation of the investment plan.

The Scrutiny of Bills Committee also expressed concerns in relation to the reversal of the evidential burden proof at proposed section 181-15 of that Bill (which is identical to proposed section 181-15 of the Bill).

Policy position of non-government parties/independents

At the time of writing, no non-government parties/independents have commented on the Bill.

Position of major interest groups

Major interest groups have been supportive of the additional funding announced as part of the Plan, whist also expressing concerns or making recommendations about a number of its policy features, as detailed in this section.

The value of research translation funding for universities

Major interest groups are united in their support for research translation funding.

Universities Australia, peak body for Australia’s 39 comprehensive universities, was supportive of the additional financial investment in research commercialisation that the Bill will trigger.

Universities Australia has long advocated for further investment in translational research which recognises the key role universities and industry contribute to achieving commercialisation success.

We look forward to working with Government to develop a robust, merit-based process for assessing projects and recognising them with investment.

The Group of Eight (Go8) representing the major research-intensive universities, in contrast to recent statements about the ARC, suggesting its model is ‘broken’, welcomed the announcement of the commercialisation funding, stating:

The Go8 has long advocated for funding for early-stage research commercialisation, a translational research fund and closer cooperation between universities and industry.

…

That the Government has adopted our key recommendations is recognition of the important role research-intensive universities will play in the future prosperity of the nation. This new funding strategy for research and commercialisation will deliver gains for universities, business, our economy and most importantly the Australian population.

The Australian Academy of Science (AAS) has also long called for the establishment of a science translation fund for university and science agency research. In its 2022–23 pre-Budget submission, it suggested such a fund should be modelled on the Medical Research Future Fund (MRFF) and apply to sciences not currently covered by the MRFF, stating:

Support for translation of all research will be critical to maintain the knowledge pipeline for future Australian manufacturing opportunities and mitigate sovereign risk.

Likewise, in its 2022–23 Budget submission, Science and Technology Australia (STA) called for ‘a new $2.4 billion Research Translation Fund to turn more of Australia’s science into applications that will generate returns on investment’. Following the announcement of the Plan, STA called the announcement of the AEA program and industry scholarships and fellowships a ‘game changer’ that ‘could turbo-charge Australia’s research commercialisation success’. STA estimates, based on its experience with the ARC Centre of Excellence in Nanoscale BioPhotonics, that ‘even if only half the outlay in the new fund - $800 million - delivered a similar rate of return, it would generate a $17.6 billion return on investment to Australia’s economy’.

Relationship to the broader innovation system

The AAS, while welcoming the Plan, has also raised concerns about missed opportunities, citing that Australia has ‘over 200 schemes and programs’ to support research and industry engagement, and stating ‘it is unclear how the new scheme will work alongside existing programs’. Further, it raises the plan’s lack of incentives for industry to engage with researchers as a potential limitation and recommends that knowledge brokers could be supported to improve connections between industry and researchers.

Roy Green, special innovation advisor at the University of Technology Sydney, has raised similar concerns, and is reported as saying the scheme is:

… a welcome announcement because it will plug some gaps in the commercialisation structure, but at the same time it’s still based on a linear, lab-to-market model rather than a comprehensive approach to the development of innovation ecosystems with an institutional policy structure that lasts beyond individual projects…

Similarly, the Australian Academy of Technology and Engineering (ATSE) has also welcomed the announcement but cautioned ‘…it is also important not to neglect curiosity-driven research which creates the ideas for new commercial opportunities’.

Financial implications

The Explanatory Memorandum (p. 2) states that establishing the AEA as an ongoing grant program will result in a net expense of $432.0 million over four years from 2022–23. The new industry-led postgraduate study programs will result in a net expense of $36.1 million over the period 2022–23 to 2025–26.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, 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.[3]

The Government states that the Bill engages the following human rights:

• the right to work – Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) and
• the right to education – Article 13 of the ICESCR.

However, the Government considers that the Bill is compatible with human rights because ‘it promotes the right to work and the right to education’ (Explanatory Memorandum, p. 5).

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights is at the time of writing this Bills Digest yet to produce its report covering the period within which the Bill was introduced. For the lapsed Bill, the committee had no comments on the Bill.

Key issues and provisions

Funding provisions

Most Australian Government funding for higher education is provided under HESA, including general course subsidies under the Commonwealth Grant Scheme, and student loans through the Higher Education Loan Program (HELP). Targeted priorities are supported through the Indigenous Student Success Program in Part 2-2A, as well as various grants under the Other Grants provisions in Part 2-3.

Items 1 and 2 of the Bill amend the Other Grants provisions to enable funding for the National Industry PhD Program and the AEA program.

Rather than detailing arrangements for specific programs in Part 2-3, HESA lists the broad purposes for which Other Grants may be made and the bodies to whom the grants can be paid, with administrative details set out in the Other Grants Guidelines (currently the Higher Education Support (Other Grants) Guidelines 2022 and Other Grants Guidelines (Research) 2017).

These purposes currently include:

• grants to support research by, and the research capability of, higher education providers
• grants to support the training of research students and
• grants to encourage higher education providers to engage with industry.

The current Bill would add the following grant purposes to Part 2-3:

• ‘grants to support arrangements to increase industry-led study and postgraduate research’ (item 1) and
• ‘grants to assist higher education providers to undertake programs of research, in areas of national priority, that progress development of technologies and services to a state of commercial investor readiness’ (item 2).

All Australian universities, as well as bodies corporate specified in the Other Grants Guidelines, would be eligible for grants for both purposes.

Item 8 amends section 206-1 of HESA with the effect of providing that a decision not to approve the latter kind of grant is a ‘reviewable decision’, and therefore subject to internal review by the Minister (who is also the original decision-maker, although this power may be delegated) and review by the Administrative Appeals Tribunal. HESA does not currently specify any Other Grant decisions are reviewable decisions.

Administrative arrangements for AEA program

The bulk of the remainder of the Bill deals with arrangements for administering the AEA program.

Item 3 inserts Division 42 at the end of Part 2-3 of HESA. The proposed division contains most of the substantive amendments relevant to the administration of the AEA program, and is comprised of three subdivisions:

• subdivision 42-A deals with arrangements for the development and publication of a research commercialisation strategy and investment plan for the AEA program
• subdivision 42-B establishes an AEA Advisory Board (the Board), and specifies its functions, reporting obligations, and membership arrangements and
• subdivision 42-C specifies that the Secretary may engage ‘Priority Managers’ to assist the Board.

Items 4 to 7 insert Division 181, which deals with AEA program information, and make related consequential amendments.

Other consequential amendments at items 9 to 11 are not discussed in detail in this Bills Digest.

Research commercialisation strategy

Proposed section 42-1 provides that a five-year written strategy is to be made by the Board as soon as practicable after the commencement of the Act. It will:

• outline the vision, aims and objectives for translation and commercialisation of university research in areas of national priority
• identify new and emerging technologies in areas of national priority and
• identify and propose ways of addressing regulatory, financial and cultural barriers to translating and commercialising research in areas of national priority.

The Board is to provide a copy of the strategy to the Minister, who will provide a copy to each House of Parliament. Despite this tabling requirement, the strategy is not a legislative instrument.

Investment plan

Under proposed section 42-5, the Board will also be responsible for developing an AEA investment plan for each year, dealing with:

• areas of national priority
• total amount of funding available
• other matters considered appropriate by the Board to assist with meeting the AEA objectives.

The investment plan is to be consistent with the research commercialisation strategy, and Board members must act in accordance with any policies formulated as part of the investment plan.

The AEA Advisory Board

Purpose

Under proposed subdivision 42-B, the Board is established to:

• advise the Minister in relation to translation and commercialisation of university research
• advise the Minister in relation to the AEA program, including its objectives, conditions of eligibility and conditions of grants
• oversee the performance of Priority Managers
• undertake any other functions conferred by HESA or the Other Grants Guidelines and
• do anything else incidental or conducive to the performance of its other functions.

Membership

Proposed section 42-25 provides that the Board will be made up of six to eight members: the Chair; the Deputy Chair; and four to six other members. These members are to be appointed by the Minister by written instrument, on a part-time basis, for a period of up to five years (proposed section 42-30).

In appointing members, the Minister must:

• not appoint a member for more than three consecutive periods
• specify appointment of a Chair and Deputy Chair (who will act as Chair during any period when the role of Chair is vacant or the Chair is absent or unable to fulfill their duties)
• ensure that members collectively possess experience and knowledge in research and its commercialisation and translation, as well as representing government, industry, business, and research (proposed subsections 42-30(3) to (5) and 42-35(1)).

Membership of the Board may be paused or ended via:

• a leave of absence granted by the Minister on terms and conditions determined by the Minister (proposed section 42-45)
• written notice of resignation from a member to the Minister (proposed section 42-60) or
• termination by the Minister if the member:
  • is unable to perform their duties due to physical or mental incapacity
  • becomes ineligible for membership due to bankruptcy or related actions
  • is absent without leave and/or
  • fails to meet disclosure obligations to the Minister or the Board (proposed section 42-65).

If any other terms and conditions not specified in HESA apply to an appointment, they must be determined in writing by the Minister (proposed section 42-70).

Disclosure of interests

Members are to be responsible for disclosing interests relevant to their functions to the Minister and the Board:

• written notice of direct or indirect pecuniary interests that conflict, or could conflict, with the member’s functions must be disclosed to the Minister in writing
• if a member becomes aware of an interest (pecuniary or otherwise) relevant to a Board decision about grant approval or any other matter considered by the Board, then the member must disclose the interest to a meeting of the Board as soon as possible. Unless the Board determines otherwise, the member is not to be present during any deliberations relating to the matter or take part in any decisions. The disclosure of the interest and related determination by the Board about the member’s ability to take part in any deliberations/decisions regarding the matter must be recorded in the minutes of the meeting (proposed sections 42-50 and 42-55).

Renumeration and allowances

Renumeration for the Board is to be determined by the Remuneration Tribunal, and allowances prescribed by the Minister in a legislative instrument. In the absence of a determination by the Remuneration Tribunal, renumeration will also be as per the legislative instrument made by the Minister (proposed section 42-40).

Annual reporting

At the end of each financial year, the Board will be required to provide an annual report to the Minister, for presentation to Parliament. The report is to cover the Board’s achievements and outcomes in translating and commercialising university research in areas of national priority, as well as regulatory, financial, and cultural barriers to these activities, and proposed ways of addressing these barriers (proposed section 42-20).

Priority Managers

Unlike the Board, Priority Managers are not a requirement of the AEA program. However, proposed section 42-75 allows the Secretary to engage Priority Managers to assist the Board by providing technical and specialist advisory services, and performing other functions conferred by the Other Grants Guidelines.

The terms and conditions of Priority Managers’ engagement are to be determined by the Secretary (proposed subsection 42-75(2)).

Disclosure of AEA program information

Item 7 inserts Division 181, which creates a new type of information under HESA, Australia’s Economic Accelerator program information.[4] This is defined at proposed section 181-10 as any information obtained or created by an officer for the purposes of the AEA program.[5]

The Bill creates a new offence, with a penalty of up to two years imprisonment, for officers who disclose, copy, or otherwise record AEA program information for a purpose not related to their employment. The offence only applies if:

• the information is ‘personal information’ under the Privacy Act 1988
• the officer’s actions cause or are likely to cause competitive detriment to a person and/or
• the action leads or is likely to lead to an action by a person for breach of duty of confidence (proposed paragraph 181-15(1)(d)).

Additionally, a defendant may be able to rely on the following exceptions, if they can establish that:

• the person to whom the disclosure relates consented to the disclosure (proposed subsection 181-15(2))
• the disclosure is required by Commonwealth law (proposed subsection 181-15(4)) or
• proposed Division 181 authorises the disclosure (that is, disclosure by an officer to the Minister or their staff, or disclosure by the Minister for the purposes of publicising an approved grant) (proposed subsections 181-15(3) and proposed sections 181-20 and 181-25).

The Bill provides that in order to rely on the above exceptions the defendant bears the evidential burden of proof. The Scrutiny of Bills Committee noted (in relation to the lapsed version of this Bill) that 'it is ordinarily the duty of the prosecution to prove all elements of an offence’ and expressed concerns regarding this ‘reversal’ of the evidential burden. The Committee requested the Minister’s detailed justification as to the appropriateness of these provisions and suggested that it may be appropriate to reframe the offences so that these matters reflect the elements of the offence (p. 40–1). It appears that the Minister did not respond directly to the Committee’s request.

Additionally, the Minister must not disclose information if a person demonstrates to them that the information is not in the public domain or readily discoverable, its release would cause competitive detriment to the person, and it is not required to be disclosed under another law of the Commonwealth or a state or territory (proposed subsection 181-25(2)).

Concluding comments

Research policy and funding in Australia is characterised by a wide range of initiatives with diverse purposes across multiple portfolios, and a long history of attempts to improve research collaboration and commercialisation.

Although the new research funding enabled by this Bill has been widely welcomed by the higher education sector, concerns remain about how this investment will fit with other features of Australia’s innovation system, especially funding for basic research and industry incentives.

Ultimately, the success of the initiatives in this Bill may rely as much on the future focus and size of Australian Government R&D expenditure, and funding for higher education research, as the implementation details of these specific programs.