David Fawcett (SA, Liberal Party) Share this | Hansard source

I rise to address the Australian Research Council Amendment Bill 2011. I support the comments made by colleagues about the importance of research in the Australian community, but there are a couple of areas that I particularly want to touch on around the implementation and the outcomes of funding on research and development. The Australian Research Council is a statutory authority within the Australian government's Industry, Innovation, Science, Research and Tertiary Education portfolio. I make that point because it does reside within one specific portfolio. One of the challenges that governments of all political make-ups and all levels have is to make sure that money spent and initiatives supported within one portfolio coordinate with outcomes and decisions made with other portfolios. That is the only way that implementation will be effective and that inputs, which we as legislators in this place approve, will have the maximum benefit in the community. I will touch on a couple of areas to highlight that.

Firstly, we should confirm the need for investment in R&D. The OECD has done quite a bit of research specifically on Australia that indicates there is a strong link between research and development and productivity. It found that a one per cent increase in business R&D led to a long-run increase in productivity of 0.11 per cent. The comparable result is 0.28 per cent for public research. In net terms there is actually a very strong and significant link to research. It is good to see that over the years—and I give credit—both sides of government have increased funding on R&D. The gross resources devoted to research and experimental development—this comes from both public and private investigation—have increased from around $10 billion in the late nineties. They rose fairly steadily up to about $24 billion by 2004-05 and then there was a significant change in that gradient up to just under $28 billion by 2008-09, which is good because the need is there. But the question is: are we actually getting the maximum result for that investment in research?

The National Farmers Federation today released their Farm Facts for 2012, which indicates that the farming sector continues to be an important contributor to our economy and to our way of life. They produce some 93 per cent of Australia's domestic food supply. In 2010-11 the farm exports earned Australia $32.5 billion which is up $400 million in two years. Significantly, when you look at food production, the United Nations has identified that there is a real challenge in that we need increasing productivity to meet the growing global food demand. The UN estimates that production will need to increase by some 70 per cent by 2050 in order to meet the world population need. That is why we need continued investment, but investment that is effective. That 'effective' means we need a whole-of-government approach.

One of the simple things that we need to do is, firstly, make sure that funding continues in critical areas. I notice, in looking at agriculture at the Cooperative Research Centres, that there was $33 million removed from the budget last year. That affects certain things. For example, there was a lot of concern last year around the spread of rabbits. The Invasive Animals Cooperative Research Centre, which were doing work on a replacement for calicivirus, were quite concerned about the fact that they were not going to be re-funded. In the end they were, but what are the consequences of not funding what appears to be a fairly small area? Some $400 million a year is the kind of productivity loss that we see in agriculture if something like rabbits are not controlled. The CSIRO has some quite accurate figures about the value to Australian agricultural produce of investing in things like viruses such as the calicivirus to control rabbits. Not only agricultural production but also the environment would be under considerable threat, and a number of plant species would be under threat if it were not addressed. So, maintaining the budget is the first step.

The second part around the whole-of-government approach that I want to highlight is that it cannot stay within that one portfolio. If we are to make those taxpayer dollars count, if we are to encourage business to make the business investments in R&D, then we need a whole-of-government approach. Looking at business R&D investment in 2008, Australia ranked 14th in the world in the amount of business investment, which was significantly above some our regional neighbours such as China. However, when we look at where business is choosing to set up their manufacturing plants, it is instructive to look at the pharmaceutical industry. In speaking yesterday to people from the pharmaceutical industry, they indicated that they would be very willing to establish manufacturing plants in Australia, but we are significantly disadvantaged compared to regional neighbours who are providing better regulatory environments, particularly around tax provisions. That means that it is far more cost effective for the companies to invest elsewhere. If we are to actually capitalise and leverage off the combination of taxpayer and private R&D, we need to have complementary policies in other portfolio areas that will enable the commercialisation and, ideally, the production of the things that are developed by our scientists and researchers in Australia. Only by having that whole-of-government approach will we realise the value of research and development in this country.

Lastly, I want to look at the area of Defence. The Defence Science and Technology Organisation, in August last year, announced US$13.7 million in R&D funding for projects. Five projects were selected out of 119 submissions under round 15 of the Defence Capability and Technology Demonstrator Program. Interestingly, if you look back over the years since 1997 when that program was established, only 11 projects have transitioned into an acquisition project or into a project that has continued the value of that research—only 11 in more than a decade. The feedback we get from small business, who are working in the defence industry sector, is that the reluctance of the Australian government and the Defence Materiel Organisation to purchase Australian products, particularly where there are new or innovative ideas, is harming the long-term prospects for research and development in Australia. Rather than just paying out with one hand to encourage companies to invest in research and development, we need to have a coordinated approach such that we reward them by giving them a market for the products that flow from their research.

I support the bill, but I call on the government to have a whole-of-government approach.