Budget Review 2021–22 Index

Tim Brennan

Science and research funding is spread across multiple portfolios and overall figures are not published in the Budget but rather collated each year in the Science, Research and Innovation Budget Tables (SRI Budget Tables). It is difficult to be certain of the overall picture of science and research funding in 2021–22 until the SRI Budget Tables are published, which historically has occurred in the second half of the year. The most recent SRI Budget Tables show that in 2020–21, the Australian Government will invest an estimated $11.9 billion in science, research and innovation, representing a 17.1% increase on the previous year.

The SRI Budget Tables provide data for government spending on research and development (R&D) as a proportion of GDP in Australia and 34 other selected countries (most of which are in the OECD). Australia’s $11.9 billion spend in 2020–21 accounts for approximately 0.60% of GDP, which is equal to the average for these selected countries in 2018 (the most recent year when complete data is available). This is significant because in recent years Australian Government expenditure on R&D has been below this level (e.g. 0.51% of GDP in 2019–20) and below the average for government R&D spending in these countries (see Figure 1).

Figure 1: government R&D spending as a proportion of GDP

Average for selected countries unavailable for 2019–21. Source: (Australian data) Department of Industry, Science, Energy and Resources (DISER), Science, Research and Innovation (SRI) Tables, February 2021, Sector: Table 6; (Selected countries data) DISER, 2020-21 Science, Research and Innovation (SRI) Budget Tables, p. 9.

The 2020–21 increase in government R&D expenditure was largely due to measures in the JobMaker package, particularly the one-off increase in Research Block Grant funding provided to universities (see 2020–21 Budget Review, p. 41). Additionally, the ongoing closure of international borders and subsequent reductions in international student income being experienced by universities may have a significant effect on higher education research funding in the coming year (see the Parliamentary Library Higher Education Budget Review for more details).

Agency budgets

Funding for many of the main science and research agencies and research funding bodies is relatively unchanged in this Budget, with the Australian Research Council (ARC), the National Health and Medical Research Council (NHMRC), and the Commonwealth Scientific and Industrial Research Organisation (CSIRO) receiving only minor adjustments to overall funding.

ANSTO funding

The Australian Nuclear Science and Technology Organisation (ANSTO) has been allocated an additional $116.7 million over four years from 2021–22 for ‘ongoing sustainability’ (Budget Paper No. 2, p. 137). This funding includes $56.9 million for ANSTO to renew and maintain its infrastructure, with the remaining $59.8 million allocated to supporting waste storage capacity. This follows the provision of $103.6 million to the National Radioactive Waste Facility program in the 2020–21 Budget (p. 122).

The funding highlights the Commonwealth’s efforts to establish a site for the storage of radioactive waste and the ongoing costs that will be incurred until a suitable storage facility can be developed. The Government specified a site near Kimba, South Australia, in the National Radioactive Waste Management Amendment (Site Specification, Community Fund and Other Measures) Bill 2020; however the Bill has not been passed by the Senate (see the Bills Digest for additional background).

CSIRO staffing

Staffing levels at the CSIRO have been a focus of attention in recent years, with the CSIRO Staff Association telling a Senate Inquiry that the strict application of the average staffing level (ASL) cap was resulting in vacant positions not being filled and reports of an increased use of contractors and consultants at the agency.

This Budget (p. 224) forecasts an increase of 396 staff for the CSIRO, to an ASL of 5,414 during 2021-22. However, past forecast increases have not necessarily been realised. The 2020–21 Budget (p. 256) forecast that the CSIRO would increase its workforce by 210 (to an ASL of 5,351) during 2020–21, but this Budget appears to show that the ASL decreased by 123 (to 5,018) during that period.

Budget measures

Square Kilometre Array

One of the larger science funding measures in this Budget is the provision of $387.2 million over ten years to the development of the Square Kilometre Array (SKA) Radio Telescope (p. 143). In addition to construction costs, this funding includes $64.3 million for the Pawsey supercomputer in Perth which will be used to process the huge quantity of data produced by the SKA. This funding allocation is consistent with a pattern of periodic funding as part of the Government’s ongoing commitment to one of Australia’s most significant long‑term science investments.

The SKA is a collaborative international project involving 14 member countries. The project aims to create the world’s largest radio telescope to undertake research into issues including galaxy evolution, the formation of stars and black holes, and the search for extra-terrestrial life and its building blocks. First discussed in 1993 and formalised through a Memorandum of Understanding in 2000, it was initially hoped that the SKA could commence operations in 2015, but this timeline has proved overly optimistic with construction of Phase 1 now forecast to be completed in 2029 (p. 20).

In 2012, Australia was chosen as a SKA co-host and is planning to build 131,072 low frequency antenna near the CSIRO’s Murchison Radioastronomy Observatory in Western Australia. Australia has previously developed two of the four SKA ‘precursor’ technologies, the $51 million Murchison Widefield Array (MWA) and the $188 million Australian Square Kilometre Array Pathfinder. The government also committed $294 million over 10 years to the SKA as part of the National Innovation and Science Agenda in 2015 (p. 37).

Despite these investments, internationally the SKA has experienced funding pressures in recent years. In January 2020, a Nature article reported that a scaled back model would be considered if additional funding could not be attained. In February 2021, detailed plans for the construction of Phase 1 were released with an overall budget (across all sites) of just under €2 billion, with approximately €1.3 billion needed for construction (p. 22). The Minister for Industry, Science and Technology has stated that the $387.2 million Budget allocation represents around 14% of the total global commitment for the project.

Artificial Intelligence

A 2017 report by PwC estimated that artificial intelligence (AI) has the potential to increase global GDP by 14%, or US$15.7 trillion, by 2030. In Australia, a 2018 Australian Council of Learned Academies report found that, with the exception of the mining industry, Australian firms were well behind leading countries in the adoption of AI and automation (p. 191).

As part of the Digital Economy Strategy (Budget Paper No.2, pp. 72-76), the Government committed to providing $124.2 million to enhancing Australia’s AI capabilities. This includes $53.8 million (over four years) to establish a National AI Centre which will be located at the CSIRO’s Data61, as well as four AI Digital Capability Centres. These measures build on a recent policy focus on AI that has included Innovation and Science Australia’s Australia 2030: Prosperity through Innovation which recommended prioritising AI development, a $29.9 million commitment in the 2018–19 Budget (p. 151) for AI and machine learning capabilities, CSIRO Data61’s AI Roadmap and AI Ethics Framework, and the ACOLA Horizon Scanning report on the opportunities of AI.

The enhancing AI capability measure also includes $24.7 million (over six years) for a Next Generation AI Graduates Program which aims to attract and train AI specialists. IT Professionals Australia describes the lack of AI skills as the greatest barrier to further AI adoption. While welcoming the measures, IT Professionals Australia states that the Budget commitments fall short of what is required to make Australia a leader in AI capabilities and uptake. Similarly, Tony Boyd, writing in the Australian Financial Review, states that following the absorption of National ICT Australia (NICTA) into the CSIRO in 2015, many AI scientists left Australia, which has had an impact on the capacity to train AI specialists.

The Australian Information Industry Association welcomed the Government’s commitment to the digital economy but noted that AI funding fell short of its call for $250 million to resource a National AI Strategy. The funding has been contrasted to much larger provisions to AI by other nations such as France (€1.5 billion) and Germany (€3 billion).  Professor Simon Lucey of the Australian Institute of Machine Learning stated that further investment in AI research is required ‘to bring Australia in line with most other advanced economies’.

Medical research

As announced last year in the Mid-Year Economic and Fiscal Outlook 2020–21 (MYEFO) (p. 25), the Government is committing an additional $172.5 million to medical research during 2021–22. This funding will supplement investments from the Medical Research Future Fund (MRFF), which had lower than expected earnings due to low interest rates.

The Government also announced that it plans to work with existing manufacturers in the Australian market to establish ‘an onshore end-to-end mRNA vaccine manufacturing capability in Australia’ (p. 134) (see Parliamentary Library Industry support Budget Review brief for more detail). This follows the announcement in the Mid-Year Economic and Fiscal Outlook 2020–21 that the Government would be undertaking a business case for further investment into mRNA vaccine manufacturing capability (p. 166). The Government’s contribution to establishing this capability has not been published due to commercial‑in‑confidence considerations. The Australian RNA Production Consortium President, Associate Professor Archa Fox, stated that establishing a production facility would cost around $100 million. The Government is reportedly negotiating with multiple potential mRNA vaccine manufacturers and has stated there is a possibility of more than one manufacturing operation being established. Following the Budget, Health Department Secretary Brendan Murphy stated that he hoped manufacturing would begin in 2022.

Agriculture and biosecurity

In October 2018, the National Farmers’ Federation announced a target to expand the value of Australian agricultural production to $100 billion by 2030. Details of how to reach this target were later explored in a House Agriculture and Water Resources Committee report, released in December 2020. Both the 2020–21 Budget and the current Budget (pp. 51–55) contain measures designed to support the sector to achieve this target. These measures include an emphasis on the adoption of digital technologies to enhance biosecurity and increased support for soil science research.

The Agriculture and Water Resources Committee recommended the creation of a National Biosecurity Strategy which supported the development of new biosecurity technologies. While the Government has not announced a biosecurity strategy, the Agriculture 2030 budget measure has a strong focus on the use of technology to improve biosecurity arrangements with approximately $80.9 million allocated to modernising biosecurity ICT systems, technology and data analytics (Budget Paper No.2, p. 52), and $25.5 million for diagnostic technology for pest and disease identification at borders (p. 51).

The Agriculture 2030 measure also provides $147.9 million for the development of the National Soils Strategy, including $102 million (over two years) to incentivise farmers to test their soil and enhance the National Soil Resource Information System, and $20.9 million (over four years) for a National Soils Science Challenge grants program to address fundamental gaps in soil science (pp. 52–53).

Other measures

The Budget provides $42.4 million to co-fund industry scholarships for women in science, technology, engineering and mathematics (STEM).  More information on this measure is available in the Higher Education brief.

The Budget also includes, from July 2022, a patent box scheme that aims to incentivise innovation by taxing corporate income derived from Australian patents at a reduced rate of 17% (Budget Paper No.2, p. 23). This measure is forecast to reduce the underlying cash balance by $206.4 million over the forward estimates.  Further discussion is available in the Parliamentary Library’s Budget Review patent box brief.

Stakeholder reactions

Many stakeholders welcomed specific measures in the Budget but questioned whether there was sufficient investment in science overall. One of the most positive responses came from Science and Technology Australia which described it as a ‘future-focused Budget’ and highlighted the value of the patent box scheme and women in STEM scholarships.

Professor John Shine, President of the Australian Academy of Science, welcomed the commitments to the SKA and mRNA production but also drew attention to the heavy impact of the closure of international borders on the university sector, which undertakes the bulk of research in Australia. Professor Shine added that given this impact, ‘the lack of recognition for science and scientists in the federal budget, and in particular for the foundational capacity in basic discovery science, is perplexing indeed.’

Among medical research organisations, the Association of Australian Medical Research Institutes described it as a Budget of few surprises but expressed disappointment that there was no new funding for the NHMRC. Likewise, Research Australia welcomed the patent box scheme and the continued support for the MRFF but stated that ‘in real terms, funding for the NHMRC and ARC is declining’ and that sufficient funding for the NHMRC was critical to ‘guarantee the pipeline of health and medical research so vital to our national health and wealth’.