Clare O'Neil (Hotham, Australian Labor Party, Shadow Minister for Innovation, Technology and the Future of Work) Share this | Hansard source

I second the amendment. It's a great pleasure to make a comment on the Australian Research Council Amendment Bill 2019 and also to endorse the amendment that's been moved by the member for Moreton. I really enjoyed the passion that the member for Moreton brought to the address he has just given. I know he's been a very staunch defender of our researchers, our scientists, in Australia and in particular has been arguing in favour of proper investment in the skills we need to grow our future economy. I'm grateful for the amendment he's moved to this bill. The bill before us is not particularly controversial—it's an update to the Australian Research Council's funding cap—but the second reading amendment allows us to put some very important points on the parliamentary record with respect to the coalition government and its approach and record on critical areas related to research, science, universities and innovation in Australia generally. And I'm very pleased to make a contribution on those matters.

When the shadow ministry was reshuffled five months ago, I was very lucky to be given the role of spokesperson on innovation, technology and the future of work. One of the absolutely brilliant parts of my role is to be able to spend time with scientists, researchers, inventors and entrepreneurs—some of the most extraordinary people in the Australian economy. When you sit in a room full of these people you think it is eminently possible that we as a society can solve any problem. It's actually an exhilarating area to be working in—and more so because one of the most important things Labor's thinking about at the moment and dwelling on as we go into the next three years is how we're going to make sure we can secure the high-wage, high-skilled jobs of the future for Australians.

There's absolutely no doubt in my mind that there is a massive opportunity here for the taking. When we look around this beautiful country of ours, we've got all the ingredients we need to become an innovation nation. The thing that worries me, and the thing I think is missing when I talk to global experts about our innovation system, is government and the important role in other economies where the government is playing that critical role of stitching together the different parts of the economy that make up an innovation nation. We see a great deal more engagement and leadership on these questions when we look around the world at best-practice countries. What we see when we look to the Australian government, unfortunately, is inertia—I think 'innovation' and 'research' are dirty words that they don't like to use unless they absolutely have to. We are going to have to change that approach if we are going to attract the jobs of the future to Australia.

The bill before the parliament is about research. It's a good opportunity to have a quick reflection on why this matters so much to building the jobs of the future. Put simply, the research that's conducted in businesses, in our universities and in other parts of our economy is our pipeline for future jobs and growth in this country. If we're not getting good ideas, inventing things in this country, thinking about those critical scientific research questions and conducting research that gives us new knowledge and information, we're not going to go far in a knowledge economy. All the research that's the subject of this bill is part of our pipeline; it's part of our ticket to a high standard of living in the future.

When we look at the economic future of our country, if we're looking at things like R&D and investment in our universities—the critical building blocks for growth in the future that, frankly, a lot of governments probably don't get much credit for investing in—they are being profoundly underinvested in and the government is profoundly lacking in focus in the way it is going about it. Innovation is part of my portfolio. We did some research looking at the recent election campaign and found that the Prime Minister uttered the word 'innovation' just four times that we could find during the entire election campaign. There's a pretty obvious political reason for that, and that is that we had the failed Turnbull experiment where for a brief moment innovation was put at the centre of our political discussion. Because that was seen as not being particularly politically useful in the way that it was done, the government will not talk about these matters anymore. They won't talk about innovation, they won't talk about research and they won't talk about the strategy for our universities. As we roll on into the seventh year of this lengthy but not particularly notable government we are losing time, while other countries around the world have been much more effective and strategic.

I think a killer statistic bears this out if we want the government's approach to research and development in a nutshell: between 2015-16 and 2017-18, so two full financial years, the federal government's research and development expenditure fell 19 per cent in real terms. We lost one-fifth of our spending in two financial years. That's absolutely unbelievable to me. Here's another one: in 2019 there are 2,000 fewer people working in government funded R&D projects than there were in the mid-1990s. Think of how much our economy has changed in that time, yet there are fewer people working in government funded R&D than there were in the mid-1990s. Last year's midyear budget update alone cut $328.5 million from research funding over four years.

Of course, it's not just the Labor Party raising these issues and trying to get the government to focus and pay a bit more attention to them; Universities Australia has forecast that government investment in research and development in Australia is set to reach its lowest share of our GDP in four decades. That's lower than back in 1978, before a number of us were even born. Universities Australia, when it released that research, emphasised the impact of those deep cuts to university research. They described it as a ram raid on Australia's future economic growth, prosperity, health and development.

I want to talk about some of the specifics of the way in which the R&D program is being designed and funded in Australia. I think the big picture, though, which is really an inescapable fact for us in this House, is that our R&D spend in this country is not high enough at the moment to sustain the improvements to the standard of living that Labor would like to see spread across the Australian community. Our national spending on R&D at the moment is about 1.8 per cent of our GDP. World-leading countries are spending more than four per cent. The OECD average is 2.4 per cent. In fact, 2016-17 was the first year that R&D in Australia went backwards. We actually spent less that year than we did in the previous year.

You're probably aware that R&D is usually measured in private and public sector spend. Our low level of private sector R&D spend is also a critical problem for us. We are massively behind leading countries and we need to do better, and I'll talk about some of the ways I see that that's possible a little bit later. The most important mechanism we have for facilitating private sector R&D spend is the research and development tax incentive. The whole point of that policy is to incentivise R&D spend, and $2 billion of taxpayer funds a year is actually a very large amount of money. In a $450 billion a year federal budget, it's quite significant. I think it's pretty clear that there is a reform opportunity here. If we're putting in quite a bit but we're not getting out of the system an impressive amount of private sector R&D spend, I do think we need to put this on the agenda of the very long list of national concerns that we have about how this area is being handled.

I want to say something quickly about basic research, which is research without a specific commercial goal in mind. It's the research that scientists usually do in a lab because they've found, with their curious brains, a question that they don't know how to answer. They seek to answer that question, and in doing so can make enormously profitable discoveries, although the focus of that research really is just about scientific curiosity, something that you would think the government would want to nurture. In the 1990s, about 40 per cent of our R&D spend was invested in basic research, and today, even with all I've said about how difficult and low our spending on R&D is in Australia, the figure being spent on basic research is 23 per cent. That has huge ramifications for our economic future, but there are also really immediate impacts on these wonderful scientists, whose work we want to support and nourish in this country. Largely because the funding amounts are so limited, the application process that our scientists have to go through to get research funded is insulting to these incredibly smart people who are just trying to do the right thing by the country. Sometimes it can take scientists months of their year to just submit these applications. Remember that, when they're in the lab, they're often breaking new ground globally in the science that they're doing.

In the last round of NHMRC grants for mid-career scientists—I'm talking about the level 1 leadership program here—just over seven per cent of the projects that were submitted for funding actually got funding. That meant 93 per cent of the scientists who put their blood, sweat and tears into creating these research programs basically didn't get funding for the important work that they were trying to do. A competitive process is something that Labor support; we're very much in favour of it. In leading countries you'll see a funding success rate in the order of 30 or 40 per cent. We're talking here about seven per cent of scientists getting their research funded. It is beyond demoralising as a success rate. If a government policy was to be designed to show these brilliant young scientists that we don't value their work, I think this would be a great way to go about it.

When the shadow minister for science, Brendan O'Connor, and I talk with scientists—as we do frequently—we hear that we are losing some of the smartest people in the country to Silicon Valley, Oxford and Cambridge—places where they are not having to go through this dispiriting process that indicates a lack of interest in the work they're doing. In a survey for young scientists, one responder said:

We are the most educated people in the country and we can barely provide for our families and have at most 3-4 years' job stability.

Research from the Australian Society for Medical Research tells us that a very large number of young scientists have considered leaving a career in research, and that 61 per cent have considered leaving the country to continue their work. At a recent roundtable that Brendan O'Connor and I had with leading scientists, we heard of an Australian researcher who had trained at one of the most prestigious universities in Australia. She went overseas, studied again at a leading American university and then returned to Australia to build a career in research. Instead of the encouragement and nurturing that she wanted, she faced a life of precariousness and funding uncertainty. She later left science to become a real estate agent. I hear these stories over and over again.

I want to quickly go back through some of the brief history of our research and development, because there are some very important trends here about the way that we are funding research and development that I think need to be put on the record as issues for the parliament to discuss and resolve. In 1996, when the Keating administration left office, Australia ranked 14th in the OECD for research and development spend. Labor increased our ranking to 12th. By 2017 we had fallen back to 17th place, with countries like Slovenia and Iceland in front of us. Over that time, OECD average expenditure on R&D as a proportion of GDP increased from two per cent to 2.4 per cent. Australia's increased from 1.6 per cent to 1.8 per cent. So what you see is that, around the world, countries are seeing the big opportunity. They're increasing quite significantly, they're spending on research and development, and we're doing ours just a tiny little bit—nothing like what other countries are doing.

The short point is: we're not keeping up. I think that's really evident in some specific areas of innovation. Investment in energy R&D, for example—Australia should be a global energy powerhouse; I'm hardly the first person to say that. In the final year that Labor was last in office, the multisector R&D spend on energy and the environment was $464 million. Last year it was $296 million. This is in real dollars. If we're going to secure this new energy future and the great wave of jobs that can come with innovation in these areas, we're going to have to invest. That's what we seem to be failing to do at the moment.

Medical innovation is another pertinent example. Anyone working in this area would know that this is a core area of expertise for Australian scientists. In the final year that Labor was last in office, the multisector spend on the National Health and Medical Research Council was $223 million. Last year, under the coalition, it was $8 million less. It's very problematic and very concerning. These are areas of natural comparative advantage for us here in Australia, and to see the government not just underinvesting in R&D but ripping dollars out of these crucial areas where we should be spending more is a bit of a problem.

Finally, I want to make a few comments about the research and development tax incentive. Bill Ferris conducted a review of our innovation system for Malcolm Turnbull when Mr Turnbull was Australia's Prime Minister. He talked about this balance between providing direct and indirect support through the way that we fund research and development. This is something else that I think the parliament needs to have a really close look at. When we look at best practice countries, we see far more support being given directly. The government is able to design and drive much more of a strategy about how we spend our research dollars, as scarce as they are, in this country. I think that, along with some of the other issues that I've mentioned, there are real opportunities for improvement here.

The upshot of all this is the opportunity. There's a huge opportunity for us to create a new wave of employment for Australians to give the very best for our kids. We're only going to get it if we get that focus and energy from the government and, unfortunately, that's what's missing today.

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