Chapter 1Introduction

1.1On 7 December 2023, the Senate referred the provisions of the Australian Research Council Amendment (Review Response) Bill 2023 (the bill) to the Education and Employment Legislation Committee (the committee) for inquiry and report by 5February 2024.[1]

Purpose of the bill

1.2The bill seeks to make changes to the Australian Research Council’s (ARC) purpose, oversight and budgetary arrangements by implementing sixof theten recommendations from the Final Report of the Trusting Australia’s Ability: Review of the Australian Research Council Act 2001 (ARC Review).[2]

1.3In his second reading speech introducing the bill, the Hon Jason Clare MP, Minister for Education (the Minister), noted the government had accepted all ten recommendations made by the ARC Review, and that four recommendations not requiring legislative change are already being progressed by the ARC and in the Australian Universities Accord process.[3] He stated that this bill would fulfil the remaining recommendations (1, 2, 5, 6, 7 and 9) requiring legislative amendment:

Recommendation 1: Clarifying the purpose of the ARC to give a legislative basis for funding basic, strategic basic and applied research via the National Competitive Grants Program (NCGP), and to manage expectations of stakeholders by defining the scope of the NCGP by its historical purpose, i.e. of providing funding to universities and their partners in all areas except clinical health, medical and dental research. We also recommend the NCGP fund research that may have a positive impact on Indigenous Knowledge systems and Peoples.

Recommendation 2: Giving a legislative basis and clarity to the role of the ARC in underpinning and shaping the national research landscape over and above the impact of the administration of the NCGP. Giving further clarity and insight to the role and impact of the ARC in relation to supporting academic careers.

Recommendation 5: Aligning administration of the NCGP to comparable research agencies within Australia and internationally and in accordance with Commonwealth Guidelines for Grant Administration.

Recommendation 6: Strengthening the governance by establishing an ARC Board with responsibilities for appointment of the ARC [Chief Executive Officer (CEO)], the College of Experts and approvals of individual grants awarded under the NCGP in addition to supporting other functions of the Agency.

Recommendation 7: Recommending new arrangements for the appointment and conditions of the CEO.

Recommendation 9: Reducing the legislative burden by simplifying the appropriation and indexation of funding, and adopting more streamlined processes including two-stage application processes where possible.[4]

1.4In the second reading speech, the Minister also highlighted how the bill would help support the ‘discoveries and innovations of the future’ by strengthening and modernising the ARC.[5]

1.5In a media release for the bill, the Minister also suggested that the amendments made by the bill would end ‘political interference’ in the ARC, commenting that:

Over the last decade, the ARC has been bedevilled by political interference and Ministerial delays.

That has made it harder for universities to recruit and retain staff, and it has damaged our international reputation.

That’s not good for our universities. It’s not good for businesses either who work with our universities.[6]

1.6As noted above, the recommendations not requiring legislative change are already being progressed. These were summed up by the Minister in his second reading speech as follows:

I have already requested the ARC to commission work to implement three [recommendations]: (1) that we help universities attract and retain talented academics through meaningful fellowships and promoting academic careers in research; (2) that we advance the support for Indigenous Australian academics through better consultation and additional fellowships; (3) that we encourage more consultation between the ARC and stakeholders in the academic and research community.

That work is already underway.

A fourth recommendation concerning the evaluation of excellence, impact and research capacity within Australian universities is being considered as part of the Australian Universities Accord.[7]

Background to the bill

Role and purpose of the Australian Research Council (ARC)

1.7The ARC is an independent statutory agency of the Commonwealth established by the Australian Research Council Act 2001 (ARCAct). The purpose of the ARC is 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’.[8]

1.8In its Annual Report of 2022–23, the ARC stated that:

The ARC is a vital component of Australia’s innovation and research system. We play an integral role in supporting the research sector to produce high-quality and impactful research through the delivery of the NCGP.

Our broader remit includes the provision of high-quality research policy advice to the Australian Government, overseeing the Australian research ethics and integrity framework, the national university research assessment system that promotes excellence in research and its engagement and impact, powerful data assets, and our role in fostering research quality, translation and impact. The ARC also brokers partnerships between researchers and industry, government, community organisations and the international community.[9]

1.9The ARC has several responsibilities, which include:

administering NCGP funding proposals;

administering research funding schemes;

providing advice to the Minister on research matters; and

assisting the ARC CEO to undertake other functions determined by the ARCAct.[10]

1.10The NCGP consists of two programs:

the Discovery Program, which focuses on research being undertaken by individual researchers or by small teams of researchers; and

the Linkage Program, which encourages collaboration between researchers across higher educational institutions, and industry, business and other partners.[11]

1.11Both of these programs are awarded competitively through a peer assessment process, as outlined below:

Source: ARC,Overview of ARC Funding Process(accessed 5 February 2024).

The independence of the ARC

1.12Although the ARC is an Australian Government body, its establishing legislation stipulates that it should operate independently from government and other Commonwealth bodies, even if it is subject to the broad policies set by the government.[12] This independence is supported by the ARC Act defining the ARC’s direct relationship with the Minister, rather than with the Secretary of the department responsible for university funding.[13]

1.13In this framework, the Minister is provided with a range of powers, including:

appointing the ARC’s CEO;

directing the CEO on their functions;

establishing committees to assist the CEO;

approve funding rules for the NCGP;

making determinations on the division of funding caps between research programs; and

approving proposals for expenditure on research programs.[14]

1.14Ministers have generally accepted funding recommendations made by the ARC. However, a Parliamentary Library article in 2022 outlined the known instances of ministerial veto of research proposals:

Questions put to the ARC at Senate Estimates, as well as the monthly publication of the ARC’s grant recommendations required following a Senate motion on 27 February 2020, revealed several instances where Ministers rejected recommended projects, but it is unknown whether this represents all cases where this occurred. The publicly known occurrences of Ministers rejecting recommended projects are:

Minister Amanda Vanstone in the 1990s, prior to the introduction of the ARC Act in 2001;

Minister Brendan Nelson in 2004 (3 projects) and 2005 (7 projects);

Minister Simon Birmingham in 2017 (9 projects) and 2018 (2 projects);

Minister Dan Tehan in 2020 (5 projects); and

Acting Minister Stuart Robert in 2021 (6 projects).

Known rejected proposals have mostly come from the humanities and social sciences, exceptions are the science and technology proposals in 2020 that were reportedly rejected on national security grounds.[15]

1.15Although the ability for Ministers to reject recommended projects is completely within their powers, as set out in the ARC Act, some stakeholders have argued that this compromises the independence of the ARC. The Parliamentary Library summarised some of these concerns as follows:

… there is increasing concern in the research community about this issue. The vice-chancellor of the Australian National University, Professor BrianSchmidt, stated that it was ‘completely inappropriate for grants to be removed by politicians, unless the grant rules were not followed.’ Similar concerns were raised in a joint statement issued by the Presidents of Australia’s 5 Learned Academies and an open letter from 63 ARC Laureate Fellows advocating for a return to its core mission of funding research ‘without political interference’.[16]

1.16The implications of ministerial vetos on funding recommendations were discussed in this committee’s report in the 46thParliament into the Australian Research Council Amendment (Ensuring Research Independence) Bill 2018.[17] Although the committee was not supportive of the 2018 bill, which was a private senator’s bill introduced by Senator Mehreen Faruqi (Australian Greens), it did recommend that a review of the ARC be commissioned that included ‘its governance and research funding processes’.[18]

Review of the ARC Act 2001

1.17On 30 August 2022, the Minister announced a review of the ARC Act, to examine the role and purpose of the ARC within the Australian research system so it can adequately meet current and future needs.[19] This review was the first comprehensive review of the ARC in more than two decades.[20]

1.18The review was chaired by Professor Margaret Sheil AO, a former CEO of the ARC and Vice-Chancellor and President of Queensland University of Technology. Two panel members were appointed to work with Professor Sheil: Professor Susan Dodds and Professor Mark Hutchinson.[21]

1.19The terms of reference for the review set out four key areas to be considered:

1. whether the role and purpose of the ARC as set out in the legislation remains relevant, including consideration of the contribution the ARC can make to identifying reforms to its programs to actively shape the research landscape in Australia and better align with comparable research agencies;
2. the ARC governance model and management functions and structures to ensure they are contemporary, fit for purpose, and meet the needs of stakeholders;
3. opportunities to improve the legislation to better facilitate globally competitive research and partnerships, reduce unnecessary administrative and legislative burden and increase agility; and
4. how the legislation could be revised to reflect the breadth of functions of the ARC and its evolution, including the measurement of the impact and excellence of Australian research and advise on contemporary best practice for modernising and leveraging these measures.[22]
   20. The ARC Review Panel released a consultation paper on 9 November 2022 and sought public submissions responding to this paper by 14 December 2022.[23] The Panel received 223 submissions and held targeted consultations with some stakeholders through meetings and focus groups.[24]
   21. The ARC Review’s Final Report was released publicly on 20 April 2023. The government released a response to the review on 22August2022, which agreed, or agreed in principle, with all ten recommendations made by the Panel.[25]
   22. The Department of Education published a consultation paper on 19 October 2023, which set out proposed changes to the ARC Act that would implement the ARC Review recommendations.[26] It also invited submissions from higher education research peak bodies and other representative groups and parties by 6 November 2023. Eleven formal submissions were received.[27]

Overview of the bill

1.23The bill has five schedules:

Schedule 1 amends the Objects of the ARC Act to set out a revised purpose of the ARC.

Schedule 2 establishes the ARC Board and administrative matters relating to the Board, including the functions and procedures of the Board, the composition of the Board, the appointment of members to the Board, the appointment of the CEO, and the establishment of new committees (including a College of Experts) by the Board. It also provides for the Minister to give the Board directions by legislative instrument in certain circumstances, and for establishment of new committees to assist the Board (including the Advisory Committee) by the Minister.

Schedule 3 enables the ARC Board to approve grant funding according to approved funding rules prepared by the Board and approved by the Minister, for programs except designated research programs. It establishes that funding of designated research programs requires approval by the Minister and provides for the Minister to give the Board directions to not approve grants, or to terminate funding approval ‘for reasons relevant to the security, defence or international relations of Australia’. This schedule also sets out changes to the funding of the ARC from special appropriation to annual appropriation arrangements.

Schedule 4 amends the reporting requirements of the ARC so that matters such as Ministerial directions are included in the Annual Report.

Schedule 5 enables the Minister to make transitional rules relating to the amendments or repeals made by the Bill.[28]

1.24The Minister drew out some of the significance of the role of the Board in his second reading speech:

The bill also establishes an ARC Board as the accountable authority of the ARC. This was recommended by the review team to strengthen the independence and integrity of the ARC.

The board will be appointed by the minister and the bill includes eligibility requirements to ensure that members are appropriately qualified, with the majority of members to have substantial experience or expertise in one or more fields of research, or in the management of research.

The board will also include a First Nations person, and a regional, rural and remote representative, and be supported by an ongoing ARC Advisory Committee with expertise across research, industry and governance.

The board will appoint the ARC's chief executive officer, and approve the appointment of members to board committees, including the College of Experts.

Importantly, the board will approve research grants under the National Competitive Grants Program.

This is one of the critical changes recommended by the review. Under the existing act, these decisions are made by the minister.[29]

1.25The Minister also set out some of the safeguards for the decision-making powers of the ARC Board, including that:

The minister will be responsible for setting the funding rules to be followed by the board in making grant decisions. These funding rules will be a disallowable legislative instrument.

This will safeguard against future ministers attempting to use the ARC as a political plaything without the oversight of the parliament.[30]

1.26Moreover, it was also noted that the Minister could direct the board not to approve a grant or funding or require repayment of a grant, where appropriate based on national security grounds, and:

When that happens, the minister must notify the parliament and the Parliamentary Joint Committee on Intelligence and Security. The ARC's annual report will specify the number of times that these powers have been exercised.[31]

1.27More detail on specific provisions is provided in the following chapter of this report, alongside any stakeholder commentary received in evidence.

Financial implications

1.28The Explanatory Memorandum included a financial impact statement, which noted that no additional funding will be required to implement the bill’s amendments. It explained:

The measures contained in the Bill, which establish the ARC Board as the accountable authority and restructures the ARC’s governance arrangements, will cost approximately $1.5 million per annum (approximately $0.6 million per annum of direct costs from the establishment of the Board and $0.9 million to support the governance processes). These costs will be met from existing resourcing through reprioritisation from within the ARC’s current annual departmental budget with zero net financial impact.[32]

Compatibility with human rights

1.29The Explanatory Memorandum included a Statement of Compatibility on Human Rights, which concluded that it was fully compatible with all human rights recognised or declared in the Human Rights (Parliamentary Scrutiny) Act2011. This statement recognised that the bill engages and supports several human rights, including the right to work, the right to education, and the right to enjoy the benefits of scientific progress and its applications.[33]

1.30In its last report of 2023, the Parliamentary Joint Committee on Human Rights specifically noted that it had no comment to make on the bill.[34]

Conduct of the inquiry

1.31The committee advertised the inquiry on its website and wrote to relevant stakeholders inviting submissions by 19 January 2024.

1.32The committee received 30 submissions, which are listed at Appendix 1 and available in full on the committee’s website.

Structure of this report

1.33This report consists of two chapters. This chapter sets out the background to the bill and provides an overview of its provisions.

1.34Chapter 2 discusses evidence on the bill provided by stakeholders and sets out the committee’s views and recommendation.

Acknowledgement

1.35The committee thanks all organisations and individuals that contributed to this inquiry by making submissions.

Footnotes

[1]Journals of the Senate, No. 94–7 December 2023, p. 2774.

[2]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, p. 8761. See also Trusting Australia’s Ability: Review of the Australian Research Council Act 2001(ARC Review Final Report), which was released on 20 April 2023 (accessed 5February 2024).

[3]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, 29 November 2023, p. 8761. Three of the recommendations requiring no legislative change are already being progressed by the ARC (Recommendations 3, 4 and 8). The remaining recommendation (Recommendation10) has been considered by the Australian Universities Accord, which handed its final report to government on 28December 2023. At the time of writing, the government has not publicly released this report, but has committed to doing so. See Department of Education, Australian Universities Accord (accessed 5 February 2024).

[4]ARC Review Final Report, p. 5.

[5]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, 29 November 2023, p. 8761.

[6]The Hon Jason Clare MP, Ending political interference in the Australian Research Council, Media Release, 29 November 2023 (accessed 5 February 2024).

[7]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, 29 November 2023, p. 8761.

[8]ARC, About the ARC (accessed 5 February 2024).

[9]ARC, Annual Report 2022–23, p. 23.

[10]ARC, Our purpose (accessed 5 February 2024).

[11]ARC, Funding Research (accessed 5 February 2024).

[12]Australian Research Council Act 2001 (ARC Act), paragraph 5(3)(a).

[13]Australian Research Council Act 2001 (ARC Act), section 33B.

[14]Tim Brennan and Dr Hazel Ferguson, ‘Independence of the Australian Research Council’, Parliamentary Library, 3 June 2022 (accessed 12 January 2024).

[15]Tim Brennan and Dr Hazel Ferguson, ‘Independence of the Australian Research Council’, Parliamentary Library, 3 June 2022.

[16]Tim Brennan and Dr Hazel Ferguson, ‘Independence of the Australian Research Council’.

[17]See Education and Employment Legislation Committee, Report into the Australian Research Council Amendment(Ensuring Research Independence) Bill 2018, and commentary from the Group of Eight (Go8) Universities in its submission to that inquiry; as well as the editorial article ‘Australia must abolish law that allows politicians to veto research grants’, Nature Magazine , 3 May 2022 (all accessed 5 February 2024).

[18]Recommendation 2 of the Report into the Australian Research Council Amendment(Ensuring Research Independence) Bill2018, p.29.

[19]ARC Review Final Report, ‘Appendix B. Review Process’, p. 65.

[20]The Hon Jason Clare MP, Minister for Education, Next Steps in ARC Reform Announced, Media Release, 30 August 2022.

[21]ARC Review Final Report, ‘Appendix B. Review Process’, p. 65.

[22]ARC Review Final Report, Appendix A, p. 64.

[23]The consultation process is outlined in the Explanatory Memorandum, p. 4, as well as in ARC Review Final Report, ‘Appendix B. Review Process’.

[24]ARC Review Final Report, ‘Appendix C. List of Public Submissions’, p. 71 and ‘Appendix D. List of Consulted Stakeholders’, pp. 74–77.

[25]See above for an outline of these recommendations. See also: Explanatory Memorandum, p. 4; and Australian Government Response to: Trusting Australia’s Ability: Review of the Australian Research Council Act 2001 (accessed5 February 2024).

[26]Department of Education, Proposed amendments to the Australian Research Council Act 2001(accessed11 January 2024).

[27]Explanatory Memorandum, p. 4.

[28]Tim Brennan and Dr Hazel Ferguson, ‘Independence of the Australian Research Council’.

[29]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, 29 November 2023, p. 8761.

[30]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, 29 November 2023, p. 8761.

[31]The Hon Jason Clare MP, Minister for Education, Second Reading Speech, Proof House of Representatives Hansard, 29 November 2023, p. 8761.

[32]Explanatory Memorandum, p. 4.

[33]Explanatory Memorandum, p. 5.

[34]Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, Report 14 of 2023, p. 3 (19 December 2023) (accessed 5 February 2024).