Greg Hunt (Flinders, Liberal Party, Minister for Industry, Innovation and Science) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Science and innovation are national priorities for the government and for the country. The advice from the Department of Industry, Innovation and Science drawn from the Productivity Commission is that innovation is responsible for 60 per cent of our national productivity, therefore it drives our new jobs and it drives our job security. Let me be absolutely clear at the outset. Innovation is about new firms but it is equally and fundamentally also about older existing firms and job security for those who are in the workforce already. Building our strength in science accordingly allows us to capture greater opportunities for our people. The National Innovation and Science Agenda is therefore a serious long-term plan to secure Australia's future economic prosperity. In December 2015, the government and the Prime Minister in particular launched our first wave of the National Innovation and Science Agenda and the government is equally if not even more so committed now to pursuing a second wave based on investment attraction and big science, and a third wave built around business simplification and our 2030 science and innovation plan.

Australia is now in its 26th year of uninterrupted economic growth against a background of major structural reforms and global shocks. Today, we have one of the highest rates of economic growth in the advanced world and no other country in the developed world can currently match the fact that we are in our 26th year of economic growth.

But despite this growth, our productivity performance has been lagging for almost a decade against our potential. We need therefore to be serious about our productivity because productivity growth is what will keep us competitive and maintain our standard of living into the future along with sound, sustainable fiscal management of the nation's financial resources. Productivity growth, a balanced budget and economic reform will therefore be essential to help Australia withstand the next and then after that the next economic shock that the world will inevitably face.

Recent history in parts of Europe provides us with a stark example of what can happen when governments ignore productivity growth, a balanced budget and economic reform—the essential ingredients to continuous national prosperity, and maintaining and improving the services to which our citizens aspire.

Innovation is therefore a fundamental and major driving force for productivity growth and it is why we are resolute in our commitment to it. It is why innovation matters. It improves our services. It improves our goods. It improves the quality of life and, it improves and enhances our capacity for economic growth on a sustainable basis.

Australia is an economy which for decades has been continually changing to be more specialised, to be more flexible, to be more service-orientated and to be more in tune with the needs of customers.

As was said yesterday during the course of maiden speeches on this side, we are moving from a case where we simply made finished goods for our own market to being a fundamental part of a global supply chain network. That is the modern Australia advanced manufacturing vision which we must not just aspire to but enable to occur through the majesty of genuine private sector initiative.

The challenge the government is focused on is making sure the policy environment is right for existing and new businesses to succeed as this continues, in a world where knowledge and innovation are becoming the main sources of competitive advantage.

In 2016–17, we are on track to provide $10.1 billion to support research and experimental development. This is an increase of 3.55 per cent on the budget estimate of $9.7 billion for the last financial year.

Over the last decade we have seen a 52 per cent increase in Australian government support for R&D—from over $6.6 billion to over $10.1 billion.

But this is about supporting, through incentives, the creation of new jobs, new activity and other areas of growth, rather than simply providing grants to existing firms that were not being globally competitive. If our firms are not globally competitive, no amount of government funding will allow them to survive. It is about a business environment and operating environment which allows the firms to thrive rather than about a trail of funding from taxpayers which does not succeed in ensuring that firms are prosperous if they are not competitive.

So our challenge is to turn this investment into real benefits for Australians.

Innovation matters to all Australians because it is about job creation. It is about new and improved opportunities to do business, and it underpins a healthy economy.

Innovation is about new and improved goods or services, new processes or new business models. That is what innovation is.

And so it is not just about tech start-ups, although they are fundamental to new job creation. And it is not about existing firms losing business and jobs to new firms. It is also about established businesses doing things better to stay competitive, to improve their competitiveness and to be world class.

Innovation is happening right now on the factory floor, on our farms, at the supermarket checkout and in the office, in addition to the leading-edge research occurring in our science laboratories. It's about turning ideas into commercial opportunity. And our job as a government is not to pretend that we create the jobs, but we can help create the environment which allows those jobs, which allows the fundamental investment to be more easily delivered—or we can make the mistakes which have been made in the past, which impede that process. So good government is about an enabling environment. It is also about ensuring we do not put in place impediments to genuine initiative, imagination and, therefore, the development which comes from that.

As a word, 'innovation' may have a renewed popularity around the world, but the idea resonates with our very history as a nation.

From the stump-jump plough and the Hills hoist to the modern miracle of the cervical cancer vaccine, Australians have rightly developed a reputation for identifying problems and applying insight, intellect and determination to solve these problems to improve the very human condition.

And we continue to innovate. Dulux, in Melbourne, a 100-year-old paint manufacturer, has over 60 scientists at its R&D centre in Clayton. In Sydney, on the other hand, Tyro, a relatively new FinTec firm, is now employing 300 people and challenging the major banks in delivering EFTPOS services. That is the key to the banking sector: genuine competiveness which puts the pressure, through innovation, on the existing incumbents.

But we can't afford to be complacent, particularly as our competitors drive their own innovation agendas. We must be responsive and forward looking as a nation.

Australia must be competitive globally. While the Australian economy has shown resilience, there are increasing risks to the global economic outlook, which therefore present their challenges for Australia

Leading innovative countries such as the UK and Sweden have established institutions like Innovate UK and Vinnova that manage coherent, coordinated, national strategies for innovation. These institutions support high levels of public sector research translation for economic and social benefit.

This bill therefore creates a new Innovation and Science Australia board.

The new board will replace the current Innovation Australia board and redefine the activities. It will continue to be chaired by Mr Bill Ferris AC, an active, brilliant and thoroughly persuasive advocate for innovation to successive Australian governments. The bill also creates a new board position of deputy chair, which will be filled by Dr Alan Finkel AM during his term as Australia's Chief Scientist. And I have to say to be able to work with Bill Ferris and Alan Finkel is a daily insight into genius in action.

Innovation and Science Australia will help us complete the first wave of the National Innovation and Science Agenda and to pursue the second wave, based on investment attraction and big science, and the 2030 strategic plan, which will guide our third wave, also focused on business simplification.

In the last month I have had the opportunity to lay out three key framework speeches on science, innovation and industry, highlighting the importance of these three pillars to the government's economic agenda and the role of Innovation and Science Australia. I have also announced nine key measures under the National Innovation and Science Agenda, including a new $500 million Biomedical Translation Fund and new grant rounds for cooperative research centre projects, the CSIRO SME Connect program, the global linkages priming grants and, in particular and of extreme personal importance, women in science, technology, engineering and mathematics grants. As somebody said to me, a football team will not play to their best if they leave half their people in the shed, and it is exactly the same as a nation if only one in 10 engineering graduates are women. We have to do better, and we will.

Beyond these measures, Innovation and Science Australia will work across the government—providing guidance around our $10.1 billion annual investment in innovation, science and research. It will directly engage international, business and community sectors to improve the national innovation system's overall performance. And Innovation and Science Australia will help in fostering Australia's innovation ecosystem.

It's about linking our investment and our programs to create something more.

The composition of the board will continue for Innovation and Science Australia. The members include some of the finest minds in this space in Australia today. The talent on this board represents innovators and entrepreneurs with proven records of success. It will continue the good work of Innovation Australia before it but will gain more strategic advisory responsibilities. There is an ambitious work plan for the first 12 months of its operation and this legislation will help them to take it forward.

The work of Innovation and Science Australia will involve undertaking periodic audits of Australia's science, research and innovation system to assess and make recommendations on alignment with government priorities. The board will identify gaps. They will better understand the activity in the science, research and innovation system and will draw together the different strands of government activity to increase our impact on the ability of people to invest, to create jobs and to improve prosperity.

A further key activity for the new board will be to develop, for the government's consideration, a long-term, 2030 strategic plan, to be informed by the audit I have just mentioned. This plan will identify science, research and innovation investment priorities and specific areas for policy and program reform.

Innovation and Science Australia will review the adequacy, capacity and condition of Australia's innovation system on a regular basis. These reviews will inform any updates to the strategic plan.

As part of promoting public discussion, Innovation and Science Australia will be able to commission and publish research, including publishing the board's advice to government when the board wishes to do so. I want this to be a transparent body which is not afraid of challenging government and giving fearless and frank advice.

Innovation and Science Australia will also promote investment in industry, innovation, science and research in Australia including showcasing successful innovators, entrepreneurs and researchers.

Similar to other Commonwealth statutory bodies, the board will develop a statement of intent in response to the government's statement of expectations. It is government practice for ministers to issue a statement of expectations to a statutory body to provide greater clarity about the government policies and priorities it is expected to observe in conducting its operations. This is exactly what I am doing with the CSIRO, and that too will be published. The statement of expectations and the statement of intent for Innovation and Science Australia will recognise the independence of Innovation and Science Australia's statutory functions.

This bill will mean that ISA will have the flexibility, capability and capacity to provide advice on all industry, innovation, science and research matters. It will help improve the outcomes of the Australian government's substantial investment in this space, and that means benefits for all Australians.

Aside from establishing Innovation and Science Australia, the bill also provides a transparent and accountable mechanism for implementing Commonwealth spending decisions on industry, innovation, science and research activities through legislative instruments. This mechanism has been structured to support collaboration across the whole of government on these activities.

The ability for the Commonwealth to prescribe programs and identify operational elements of spending activities in subordinate legislation in this way provides a level of flexibility for the government to be in itself agile and to meet changing demands whilst ensuring its activities and programs are effective, robust, sustainable, and subject to parliamentary oversight.

To conclude, the story of Australia has been a story of innovation.

We have shown we are a nation that can harness its ingenuity to create real opportunity and real prosperity.

But our future prosperity depends on our continued ability to innovate. We need innovation, economic reform and budget repair such as the Treasurer is delivering, despite opposition from the other side, to drive productivity and to help Australia address any future global economic shocks. The government will continue to play its part, getting the settings right to encourage existing firms to grow and new firms to start, creating new opportunities and driving jobs and prosperity.

Ultimately, this bill allows us to bring Australia's leading minds to bear—from business, commercialisation and research—to make our investments perform better for all Australians and to attract new investments from within Australia and from overseas. It will point the way for turning today's investments to tomorrow's innovations, to the jobs of the future.

For that reason, I thoroughly commend this bill to the House.

Debate adjourned.