Rob Dossor
From 2014–15 to 2017–18 rural research and development corporations (RDCs), such as Dairy Australia, the Cotton Research and Development Corporation, and the Sugar Research and Development Corporation, will receive an additional $100 million.[1] The Rural Industries Research and Development Corporation (RIRDC), however, is set to have its funding reduced by $11 million over four years.[2] The RIRDC represents a number of rural industries like the olive, goat and rice industries, which are not represented by an individual RDC.
RDCs (including RIRDC) ‘are a partnership between the government and industry created to share the funding and strategic direction setting for primary industry (R&D) [Research and Development], investment in R&D and the subsequent adoption of R&D outputs. The RDCs commission and manage targeted investment in research, innovation, knowledge creation and extension.’[3]
Election commitment
Before the 2013 election the Coalition committed to provide an additional $100 million in funding to RDCs so ‘they have greater capacity to deliver cutting edge technology, continue applied research and focus on collaborative innovation.’[4] While $100 million has been allocated to RDCs, [5] this has been offset in part by reduced funding for the RIRDC.[6] On aggregate, an additional $89 million has been allocated to RDCs in this Budget.
Commission of Audit
The measures in the 2014–15 Budget differ from Recommendation 34 of the Commission of the Audit which recommended, among other things, that the Australian Government:
- abolish sector-specific R&D programmes
- reduce government support for RDCs to better reflect the mix of private and public benefits, and
- consolidate existing research programmes aimed at fostering collaboration.[7]
Rural Industries Research and Development Corporation
In 2013 total receipts for the RIRDC were $25.7 million. Of this, revenue from the Australian Government was $14.2 million—over 50 per cent of all RIRDC receipts. The 2014–15 Budget reduces this by $2 million in 2014–15 and a further $3 million for each year of the forward estimates. In doing so the Australian Government will reduce the RIRDC’s operating funds (relative to 2013) by 7.2 per cent in 2014–15 and 11.6 per cent each year over the forward estimates.
Funding arrangements
The Australian Government’s financial contribution to RDCs is legislated under the Primary Industries Research and Development Act 1989 (the Act).[8] The Act specifies the formula that determines the amount the Australian Government will contribute to each RDC for R&D activities. Specifically the Act states that the Australian Government will match the RDC’s yearly planned R&D expenditure, capped at 0.5 per cent of gross value of production of the specific industry.[9]
As these funding arrangements are legislated, it is likely that to reduce funding to the RIRDC, the Australian Government will have to introduce amendments the Act, in order to decrease the matching contribution cap. No changes to the Act are required for additional funds to be provided through RDCs as section 33 of the Act provides that an RDC may be paid by the Commonwealth under a written funding agreement.[10]
Budged Measures: Budget Paper No. 2: 2014–15 states that this additional funding will be provided through,
grants for research projects that focus on delivering cutting edge technologies and applied research, with an emphasis on how the research outcomes would be used by farmers. The programme will require research to be done collaboratively between RDCs and one or more research providers with a financial contribution from one or more of the parties required.[11]
[11]. Australian Government, Budget measures: budget paper no. 2, op. cit., p. 42.
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