Dean Smith (WA, Liberal Party) Share this | Hansard source

It was the last bit of Senator Di Natale's contribution that I think was the most important. He committed the Australian Greens to looking carefully at, to even supporting, good ideas when they come before the Senate. Certainly, I and other government senators look forward to encouraging the Australian Greens to support those good ideas that come from the government and that are brought to this place.

It is my pleasure also to rise this afternoon to speak on the Medical Research Future Fund Bill 2015 and related bill. This legislation will give effect to what I believe will come to be viewed as one of the government's landmark achievements: the establishment of a $20 billion Medical Research Future Fund. This represents a massive investment in Australia's medical research community, which has always punched well above its weight in global terms when you consider the size of our population.

This is an important initiative for a couple of reasons. The first of these relates to the future needs of our own nation. This is very much a piece of economic legislation. As the fourth Intergenerational report confirmed earlier this year, healthcare costs in Australia will continue growing significantly in the years to come as our population ages.

It is very much in our own interests to promote the type of research that will help to cure or, at least, lessen the impact of chronic illnesses that afflict members of our community. We know that Australians are going to be living longer. Our challenge is to make certain that they are living quality, healthy lives, as well as living longer ones.

By investing in medical research we can determine the effectiveness of a drug or form of treatment so that taxpayers' money is not being unnecessarily spent on things that do not work. But, more than that, this is the sort of investment that will allow Australia's medical research professionals to shine in a global context. Australian ingenuity has been a critical part of internationally significant developments in the field of medical research. For instance, think of Howard Florey, who carried out the first clinical trials of penicillin, in 1941, an act for which he later shared in the Nobel Prize for medicine. Today, we can take it for granted that our injuries can be bandaged and our wounds will heal, with little risk of infection. But that was not always the case of course. Death from wound infection was a significant issue prior to the mid-1940s.

Establishing this fund is about helping to unlock the potential of medical research in Australia. I am utterly confident that there is another Howard Florey out there and that the intelligence and work ethic that abounds in Australia's medical research community will play a big role in the eventual cure of diseases such as cancer, diabetes, HIV and the like.

That is why this legislation is important. It will be transformational, not just for the 23,000 Australians who work directly as medical research professionals but also for the medicines industry that supports those people and that itself employs nearly twice as many Australians.

The structure of the Medical Research Future Fund will also specifically address some of the concerns identified in the Strategic review of health and medical research, published in February 2013. That review, led by Mr Simon McKeon AO, clearly set out the need for Australia to have a more strategic model to get the best health results from its research efforts. The McKeon review identified a particular need to create greater linkage between healthcare providers and research organisations by 'fundamentally embedding research within healthcare delivery'.

The review set out a case for placing far greater emphasis on priority-driven research, to help bridge some of the gaps between research excellence and translation of research into applied technologies and practices. This requires additional investment in translating research findings into bedside applications. It requires more commercialisation and stronger partnerships between researchers and health practitioners, including hospitals and GPs.

Importantly, it will support investment across the research spectrum, from laboratory research to clinical trials, the commercialisation of new drugs or devices, the translation of new techniques or protocols into clinical practice and public health improvements.

All told, the Medical Research Future Fund will provide some $400 million for distribution over the next four years. And it is worth noting, I think, that this investment is additional to existing government support for direct medical research activities. However, the MRFF will be structured in such a way that it will meet specific purposes, consistent with the coalition government's overall investment approach in medical research and innovation.

Importantly, the MRFF will be governed by an especially rigorous set of accountability measures. This government believes that taxpayers' funds are a precious resource and that they should be allocated wisely, based on expert advice and strong governance arrangements.

The government underscored its commitment by making a series of amendments to the bill when it passed through the House of Representatives, all designed to strengthen accountability and transparency.

Under the terms of this bill, the Medical Research Future Fund will be managed by the Future Fund Board of Guardians. This will mean the fund is in the hands of a body that has a strong, proven track record when it comes to managing investment portfolios on behalf of the government or, more accurately, on behalf of the Australian taxpayer.

For instance, under the board of guardians' stewardship, the future fund has grown from approximately $64 billion, at its inception in 2006, to around $117 billion as of March this year, an annualised rate of return of around 8.2 per cent. I think it would take a very brave politician to dispute the success of the future fund. The board of guardians will be required to adhere to the same accountability frameworks that this government has in place for all Commonwealth bodies. This includes the publication of annual reports, audited financial statements and quarterly portfolio updates reporting on the fund's performance. Projects funded by the MRFF will be publicly disclosed online, consistent with the government's reporting frameworks for grants.

On the issue of parliamentary accountability, the Minister for Health will be required to prepare a report every two years, that will set out all funding provided by the government for medical research and innovation from the MRFF, and to explain how the funding is consistent with the strategic objectives set out by the fund's advisory board. That strategy is subject to a review every five years and will take account of national health policy needs, gaps in current investment and the timing needed to make certain the nation is obtaining best possible value from our spending on health, medical research and medical innovation.

In terms of ministerial oversight, the finance minister will be responsible for ensuring funds dispersed by the MRFF are done so in a manner that is consistent with the government's overall policy objectives. In this regard, the finance minister will work closely with both the Treasurer and the Minister for Health, who will oversee the flow of funds through the two accounts applicable to the MRFF—the COAG Reform Fund, and the Health Portfolio Special Account.

Of course, there is always a need to maintain independence in research activities, and nothing contained within the provisions of this bill will threaten the independence of research activities. The coalition government is committed to all investment activities undertaken by the Future Fund board, remaining independent of government. Ministers will not be involved in investment decisions. The Future Fund board will apply the same principles to the investments of the MRFF as it does to other government investment funds for which it is responsible, including the Future Fund. Of course, the Future Fund board will be required to actively manage risks and not take decisions that are likely to jeopardise the investment taxpayers are making in the MRFF. Once the MRFF is established, the board of guardians will advise the Minister for Finance each year of net earnings which can be withdrawn from the fund to invest in medical research and innovation projects. As per usual, long-established practice, the government will then decide, though the annual budget process, how best to use these funds to support priority areas.

The establishment of the Medical Research Future Fund is something of which this coalition government is very proud. Indeed, I suspect that every Australian will find themselves very proud of this particular initiative as time passes. By making this long-term commitment to ensuring excellence in medical research, we are taking an important step not only in the advance of medical science in this country but also in putting Australia's health system on a more sustainable footing. I am sure all of us in this Senate chamber look forward to the day when, as a result of investments made though this fund, an Australian researcher contributes to curing a dreaded disease, helping people both here and internationally lead longer, healthier and more productive lives.

It is estimated that for every dollar invested in medical research, the community derives a benefit worth $2.17. By establishing this fund, we are going a long way to locking in enormous health and research benefits for the generations of Australians both now and into the future. With those remarks, I commend the bill to the Senate.