Ed Husic (Chifley, Australian Labor Party, Shadow Minister for Industry and Innovation) Share this | Hansard source

It is a pleasure to speak on the Australian Research Council Amendment Bill 2021 because this parliament should take a great interest in anything to deal with the way in which we think through the things that are affecting us as a country, an economy and a community, particularly through the arms of research in this nation. Labor has already said we will support this bill because we do appreciate that the bill itself is designed to amend the Australian Research Council Act to apply indexation to approved research programs, and it will also insert a funding year for the 2024-25 financial year.

The Research Council is an independent body which funds primary and applied research through the Discovery Program and the Linkage Program. It has been impressed upon us by the bill itself and the documents supporting the bill that this will be important to support the ongoing operations of the Australian Research Council, which we obviously support, and it's why we support the bill.

Coming to the broader point of research, research is critical, particularly in the environment that we are in, where there is an active reconsideration of industry policy being undertaken by countries all over the world. There is a need for us to think through how we meet or make the things that nations need, the way in which we are reliant on others and the way in which trade may or may not be working to help us in meeting the needs of the country. There is also a need for us to address things like self-sufficiency wherever we possibly can. That will not be something that can be achieved perfectly, nor should it be pursued overwhelmingly. We need to work out the things that we are strong at and good at, and be able to mobilise resources to ensure we scale that up.

The pandemic showed that when we needed certain things—most notably in the arena of medical equipment—we found at key points in time that we couldn't get our hands on masks and ventilators and, down the track, vaccines. It has also re-emerged that we yet again need more access to masks and rapid antigen tests. This also showed us that when supply chains were under pressure we needed to reconsider how we manufactured the goods and services Australians needed to get access to in times of need.

The other thing that has forced a reconsideration of industry policy is geopolitical factors, where, as I referenced a few moments ago, we have had to rethink where we get our goods from, the way in which trade is operating and the way in which disruptions to that trade may be affecting our ability to get those things. You are now seeing industry policy become a bigger feature of public policy in a way that it hasn't for many years. In fact the view had been, through a process of economic liberalisation through the eighties and nineties, that industry policy itself had been too driven by governments, had not been sensitive to markets and had potentially distorted the way in which resources were allocated, and that we weren't getting the best outcomes. For many years in this nation—and it started under a Labor government—we moved away from this whole notion of what was described as 'picking winners'. That singular phrase has stayed in political discourse in this country and in economic thinking for decades.

Yet what was happening offshore was that nations weren't necessarily so dogmatic. In fact a number of countries were actively thinking about what sectors they could back—some of which had come out of command and control economies, most notably countries that had exited the Soviet Union's sphere of influence. Most notably I think of Estonia, which has completely reinvigorated its economy with a big focus on digital and tech and which is one of the outliers, one of the outstanding nations, in digitisation and what it has been able to do to reform its own operations. Countries have thought about their strengths. Countries have thought about what they can do to mobilise resources to get things done.

From our perspective, Labor have said, through the National Reconstruction Fund, there would be a number of sectors we would think deeply about to ensure we see better industry outcomes. The pressure is on nations to think about industry policy in a new way, to think about how they can support sectors that are really important to their economy and, through the way, potentially, to ensure that the economic complexity of nations evolves as well. As has been observed, when you look at Australia's economic complexity, we have a lot of work to do to ensure that we are not completely and utterly reliant on a few sectors alone.

Under the National Reconstruction Fund that Labor have championed, we will look at improving value-adding in agriculture. We will look at improving value-adding in resources and mining. We will look at what we can do in the arena of energy and renewable technology development. We will also look at the arena of medical and medical manufacture, and at what we can do to support early-stage innovation and enabling technologies that other countries—again, I come back to the point about picking winners. A lot of countries have dedicated themselves to having very rigorous programs in place to pursue the development of national plans around artificial intelligence, robotics and quantum computing. All these things will be really important longer term. If, as a country, we want to be left behind, we only need to underinvest in some of those areas. Other nations get it. This is not just an issue of economic security but of national security as well.

In particular, there is this hunger that exists in the Australian community to see us deal with this fact that I think shocks a lot of people—that we are ranked amongst the lowest in the OECD on manufacturing self-sufficiency. We import way too many things across critical areas where we used to have a history of local production which has now gone. We need to rebuild that, and we need to find ways to ensure that we've got the things we need. Bob Hawke thought this through many years ago. That was why he championed, for example, back in 1989, the establishment of the cooperative research centres. It's why he thought about ensuring that we didn't have a brain drain and it's why he thought about the way in which he and his government could broaden the way in which the economy was working to ensure that we weren't reliant in just a few spaces, and we had these CRCs supporting economic and social activity along the way.

But, if we want to deal with manufacturing, if we want to boost manufacturing—which is what a lot of people want to see—and if we're going to be a country that makes things, it is critical that we be a country that thinks about how those things are made. Ideas are crucial. We see those ideas emerge largely through the investment in R&D that we make as a nation. As I mentioned earlier, the reality is that as a nation we don't do enough to address that issue of manufacturing self-sufficiency. And, if you want to make things, as I said, the other area you need to think about is how they're made. On the R&D side, we keep sliding down the international rankings. Since 2011 and 2012, we have seen investment in R&D contracting—falling from 2.11 per cent of GDP to 1.79 per cent of GDP in 2019-20. This is not good if we think longer term about economic health.

If you look at expenditure on R&D incentives in the period from 1985 to 2017-18, for example, you see that there is a build-up of national activity under a Labor government and then a drop-off under a coalition government, only to be resuscitated under Labor and then fall again. Those stats don't lie. They are there. If we are not backing our brains, we will see ourselves short-changed in the longer term. As has been identified by countless reports in R&D in this country, including reports commissioned by the government itself, we will only ever be a follower. We will be an importer. We will be basically leveraging off someone else's brains and someone else's ideas, and we will be a nation reliant on the imports of very sophisticated technology or product. We've got to be able to do better. We have to have the faith to back our local brains. We cannot continue to have a situation where we see cuts in that investment.

When it comes to research through arms like the Australian Research Council or others, the only consistency we do see is regular cuts from the coalition. From the moment they got into power, we saw continual attempted cuts. We saw a cut of $550 million introduced in the 2014-15 budget. Then there was an attempt in the 2018-19 budget to make a further $2 billion cut. This spooked even people within the coalition, and there was reporting by the Senate which talked about the damage this would do to the longer-term economic prospects of the nation. It had to be overturned. But what is staggering is that the coalition, without any sense of shame, then turned around and suggested that they were now adding $2 billion to research and development in this country, and they've been going around trumpeting how much they're investing in R&D when the reality is that that was the prevention of a cut that they thought they would make.

What we do see so often in this country under the coalition is that there is no sense of a broader framework with respect to what research is being undertaken in the nation, what's required to support it and how government can put those things in place that ensure that that happens. So we see piecemeal efforts. We see the announcement of a patent box or a fintech sandbox here and there, or we see different initiatives rolled out during a Press Club speech and a bit of money put here and there, or we see this type of initiative put forward. We see the coalition playing around with research as people reacted to the acting minister for education just before December deciding he would make a call on what research he valued and didn't value. We don't see any significant plan by the coalition to say: 'Look, we are falling behind relative to other nations. This is bad for our longer term economic prospects, and here's what we'll do to fix it.' There is none of that. This bill does not provide that. Nothing else that the coalition has done will provide that.

There are two consistent things, I have to say, about the coalition. One is they will always attempt to cut, particularly in these areas, and will always make a budget cut on issues that are critical to the nation. The other is, when they're under pressure, they'll make an announcement to make it look like they're doing the opposite or that they're better than what they are. But the announcements themselves don't stack up. There's no substance to them. We find out soon enough that the detail overwhelms the spin and the shine and the gloss of the announcement and we are back to square one. We cannot afford that.

A lot of us on this side of the House recognise, we believe, that this country, be it First Nations people or the people who came hereafter, given the isolation of this continent, given the way supply lines have worked historically, have had to be a people that are smart enough to work out problems confronting us. In a dry and arid continent like this, we've had to make our own luck and we've had to have the smarts to do it. We need an investment in brains, through the Research Council or the tertiary sector or our vocational sector, making sure we've got that. The coalition have always cut and failed to support local ideas and failed to back thinking. I constantly hear from firms, who are under pressure in the absence of government support and excitement for what they do, thinking they'll have to go overseas. It is unbelievable that we still have that in this day and age. This has been a constant thread through Australian history, where people have had to leave these shores to get backing for their ideas because we didn't back know-how, and that's not right. It's not right and it signals spectacularly a lack of faith in our own people to sort out these problems that face us all—economic or social. We should not have that. We should be making sure that institutions like the Australian Research Council and everything else benefit from a solid framework backed up by a significant investment that ensures that Australia is not just a place that makes things but also a place that knows how to make them as well.

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