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

I'm going to get to the education sector. The minister's agitating me here. Don't worry, Minister Tehan, I'm about to come to your portfolio.

One of the things that is frustrating about all of this is that it's so obviously an area where we can be doing better. Instead what we see is a Prime Minister who can't even mention the word 'innovation', and that leads to policy timidity across this whole, expansive sector. I find that incredibly disappointing.

I want to mention three other big directions that I think the parliament needs to look at as it reviews and discusses this important bill over the coming months. One of the issues that cannot be papered over is the simple fact that we are not spending enough on research and development as a country. Our R&D spending has dropped to less than 1.8 per cent of our GDP, whereas best practice countries around the world are spending more than four per cent. This is an enormous problem for our country to consider. We're ranked ninth out of 11 comparable countries on R&D spending. In fact, the biggest lagging area when we break R&D spending into the different sectors of the economy where that spending is being conducted is private sector innovation spending, and the biggest thing this chamber does to promote private sector innovation spending is the R&D tax incentive, so that should tell us right off the bat that there's a pretty significant problem not just with the edges of this policy but with the driving force of it.

What I really want to be clear about—and those on the other side of the chamber need to understand this too—is that the bill that's before us, as proposed by the government, will see R&D spending in Australia decline further. This is not about increasing funding. We know we're not spending enough, and the bill is going to see this go backwards for us as a country.

We see the same in the university sector. The problem there is so profound. Of 34 advanced nations, Australia ranks 30th for government spending on universities. The government introduced cuts of $2.2 billion from universities over the coming years via the funding freeze for degree courses. A further $3.7 billion was removed from the sector with the closure of the Education Investment Fund. Government spending on tertiary education in Australia is 0.7 per cent of GDP. The OECD average is 1.1 per cent. Serious! What kind of government, going into the economy that we know we need to embrace, is cutting spending on our skills sector when we know the best thing a person can do for themselves in this new economy is to get as skilled and educated as they can? It makes absolutely no sense.

I also want to mention the problem of something called additionality, which is like the Holy Grail in this policy area. Basically, success for a program like this one is when the program incentivises companies looking around the world to see where they may do research and development to do it in Australia. That way we get the knowledge, the skills and the jobs that come with those initiatives. Failure for a program like this is when a company is going to do R&D in Australia anyway and we give them government funding to do something they would already have done. That seems simple in principle, but creating public policy to determine which project is which is much more difficult. Something the shadow minister talked about is that we're conducting a Senate inquiry into this bill. Something that Labor will be looking at very closely is what evidence there is that this program is going to create more additionality so we're wasting less money paying companies, often very large companies, for doing things they would have done in Australia anyway.

I also want to mention a perennial and growing problem for us in our R&D program and that is the lack of strategy in how we're spending our R&D dollars. Australia's spending on R&D is about two per cent of global spending. We can't be the best at everything. In fact, in most other areas of policy and economy, we don't try. We do the smart thing that one does when you have limited resources in a globally-competitive world: you think about where you've got a special advantage that might make you particularly good at something and you try and invest and grow that. Renewable energy, for example, the absolutely biggest no-brainer, is right there in front of us. Because our R&D program is indirect, it's letting a thousand flowers bloom—in fact, many thousands of flowers bloom. We're not taking the opportunity to ensure that every dollar is working as hard as possible for us, because it's basically scatter gunned right around the economy. And that's something, again, that doesn't meet best practice when we look around the world and isn't fixed in any way in the reforms that are before the parliament right now.

Again I want to reiterate some of the shadow minister's comments about Labor's history in this area. We're really proud of the importance that we place on things like the R&D program. We're very proud of the support that we've long given to universities in this country. We know there are certain undeniable facts about the future world that we're going into—we've got these brilliant pockets of creativity and innovation in our economy. Government needs to bring these things together. We're not seeing big ideas on that side of the chamber, but we'll engage with this bill in good faith to make sure we get the best out of it we can.

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