Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I continue my comments on the Medical Research Future Fund Bill 2015. In the few minutes available to me I want to explain why the government does not accept the amendments to the bill as proposed by the opposition, because I am certainly hopeful that the opposition will support the bill.

The first is the fact that the amendments do not support the objective of the bill to establish a fund to provide complementary funding in addition to existing levels of funding through the NHMRC. Such an amendment would limit and reduce the amount of funding available to go into the capital fund so that these proposed changes would constrain funding for medical research infrastructure and the commercialisation of medical research innovations. I do not think any of us really want to see that but that is the objective of that amendment and I speak against it.

The second reason not to support the amendments as put up by the opposition is that they would remove the ability for the government to enter into agreements with the states and territories—who would be critically important in the medical research space—or with corporate Commonwealth entities or, indeed, with corporations. At the commencement of my contribution this afternoon—Acting Deputy President Williams, unfortunately for me you were not in the chair, at that time, to listen—I mentioned some of the most important people: Nobel prize winners from Australia in the fields of medical research. In fact, the vast majority of Nobel prizes won by Australians have been in the medical and related spaces. In the Commonwealth entities corporate sector, I mentioned the Commonwealth Serum Laboratories as just one example.

Another amendment proposed by the opposition should not be supported, because it would burden the CEO of the NHMRC with significant additional administrative responsibilities and provide that person with additional powers that would be inconsistent with the intent of building proper checks and balances into legislation. Importantly, as I will state in a moment, there is a critically important role for the NHMRC chief executive officer and that is to chair the advisory board, so that person will have the most critically important space.

Finally, the other reason the government does not support the opposition amendments is that the opposition amendments call for the continuation of the Health and Hospitals Fund and the billion dollars that sits in it. With the MRFF coming into existence, there is no further need for the Health and Hospitals Fund. Surely everybody's interests would be best met by that billion dollars going to start the development of that capital fund, which will build up to $20 billion and will become the capital base from which interest, over time, will fund the necessary research.

I made mention of the fact that there will be an advisory board, skills based, including people who collectively possess expertise and experience in medical research, policy relating to health systems, management of health services, medical innovation, financing and investment, and commercialisation. It will leverage from the experience that exists already in the NHMRC.

One of the areas that I hope will find its way into the execution of the legislation, once it is passed, is that whilst it is the case that it is directed towards medical research one must never lose sight of the fact that an enormous amount of research that did not have its origins in the medical space has found its way. So much of the work that has come out of the space race—NASA and those others around the world—has found its way into medical research. I am particularly hopeful that whilst it is a medical research fund we will not exclude those areas in related disciplines that may well have a pathway into medical research.

What is important to conclude here is who will receive payments from the interest that accrues from the capital fund. They will be medical research institutes, universities and corporate Commonwealth entities and corporations. They can all receive grants, not loans but grants, for medical research and innovation under the legislation as can the states and territories; again, this is a reason for us not being able to support one of the opposition's amendments. I will say again that the NHMRC will play a vital role in the funding arrangements through the CEO's membership of the board, the requirement for the board to take into account the NHMRC's national strategy for medical research and public-health research.

So we have got a scenario now with the states and territories involved through the COAG process with government instrumentalities, corporations, universities and the CSIRO if it is relevant to them. But of course the fund will not be able to fund health services or primary health care; they are dealt with under 'others'. I mentioned earlier the role of the Future Fund—the fund that is exceeding all other funds in terms of the success of the investments—in overseeing this complete scenario and removing the need for a whole new bureaucracy to administer this. I do recommend this to the Senate. I hope it passes unanimously.

Arthur Sinodinos (NSW, Liberal Party) Share this | Link to this | Hansard source

I rise to make a contribution to the Medical Research Future Fund Bill 2015 debate. Let me say at the outset, I think this is a landmark coalition initiative. I was very excited when this was first floated after we came to government and I was very keen that it be supported. It is one of the biggest sovereign endowment funds of its kind in the world. There are some big ones like the Wellcome Trust in the UK but this is a very big one.

The reason I particularly support the fund is because when I look at health and medical research in Australia, it is one of our competitive strengths as a nation. When I think about the great institutions in that space in Melbourne and in Sydney, I think of the Garvan, for example, which has a fantastic name internationally. If you think of some of the institutes, you think of some of the various cancer research centres in Sydney and of the Peter MacCallum Centre in Melbourne. The list goes on and on. If you go to Melbourne there is now a precinct of the city which is effectively a health and medical research hub. It is very important to see because health and medical research hubs are where we bring together world-class research and world-class technologists working on cutting edge health problems.

The point of this particular fund is to create a capital amount of about $20 billion by the early 2020s and the net interest from that as determined by the Future Fund will be used to fund health and medical research. It will be on top of existing funding under the National Health and Medical Research Council so it is not substituting funding. It is additional funding and that is why it is a very important initiative—it will turbocharge our role in this space. As I said, it is one of the biggest sovereign endowment funds of its kind in the world.

The reason that this will be important to Australia is because we have 23,000 research professionals and the medicines industry that stands behind that employs nearly twice as many Australians, so it is a world-class industry and we can have a world-class edge in this sector. It will provide funding for Australian scientists and medical researchers to become the best in the world.

This aspiration to be the best in the world is very important. We often hear about how we must benchmark ourselves against others overseas, against the best in the world. But what we are saying here is we want to become the benchmark. We want to become the best in the world by providing the funding that will turbocharge this particular sector.

I recently had a conversation with the new vice-chancellor of the ANU, Brian Schmidt. He had been on a business mission to Europe as part of the Australia-German advisory council set up as a result of the visit by Chancellor Angela Merkel to Australia in the context of the G20. That council is chaired ably on our side by my good friend and colleague the Minister for Finance, Senator Cormann. What struck Brian Schmidt when he was in Germany was the fact that the German aspiration was to identify four or five areas of research and to say, 'We are going to be the best in the world. We are going to be the pacesetter, the pacemaker in those sectors.' He said that a country like Germany has more resources than us to do this. We cannot hope to match the scale of the German investments in some of these identified areas, these four or five strengths of Germany, but here we have made a big bet on a sector where we already have runs on the board.

If we go back and think of CSL, originally Commonwealth Serum Laboratories; if we think of ResMed with its inventions around sleep apnoea; if we think of Cochlear, the bionic ear then we have a track record of doing health research well in a leading-edge way. This Medical Research Future Fund Bill will establish the Medical Research Future Fund and will provide over $400 million for distribution over the next four years, as I said, in addition to existing government funding for direct medical research.

Importantly, the Future Fund addresses some of the concerns which were identified in a major strategic review of health and medical research commissioned by the previous government and published in February 2013. That review, known as the McKeon review, led by Simon McKeon AO, a former chair of CSIRO, found that Australia needs 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 health care delivery'. This was about greater industry and research collaboration.

One of the observations that Brian Schmidt made about his trip to Germany was the fact that industry and academic and research institute collaboration is of a very high standard, a very high level. For example, the chief scientist of BMW may also be a top professor at one of the local universities and hold dual appointments, the point being that in a physical way this collaboration reflected a capacity to take research results and translate them into practical outcomes, not just commercial outcomes. We are talking here about practical health outcomes.

The McKeon review made the case for new emphasis on priority driven research to help bridge some of the gaps between research excellence and the translation of research into applied technologies and practices, and that this required additional investment in translating the research findings into bedside applications. It requires more commercialisation and stronger partnerships between the researchers and the health practitioners, including hospitals and GPs. This fund will support investment across the whole research spectrum, from laboratory research—in other words, fundamental and basic research—through clinical trials to the commercialisation of new drugs or devices and the translation of new techniques or protocols into clinical practice and public health improvements.

In evidence before the legislation committee that looked at this particular legislation, CSL made the point that the fund was addressing Australia's ability to commercialise our intellectual property. They said:

Too often it is either not translated from an idea into a product or goes offshore for development at a very early stage and Australians miss out on the real economic payback. And the employment and multiplier effects that come from manufacturing.

We are talking here about advanced manufacturing. They said:

To help address this, we would like to see the (future fund) have a strong and strategic focus on Translational Research.

In their submission, they talked of seeing 'at least 20 per cent of disbursements go towards' this strong and strategic focus on translational research. They went on to say:

It is important to take a proportion of appropriate novel ideas to the point where there is the potential for commercial interest. Where the technical concept is proven, but commercial viability is uncertain and commercial risks remain. Translational research is the leap from fundamental science to its practical application. From an idea to a candidate product. From the lab to a Proof of Concept clinical trial.

Intellectual property around a project at the pre-translational stage is far less valuable than that same intellectual property at the post-translational stage.

CSL go on to say:

We believe that this critical nexus between academia and commercialisation is underfunded in Australia and this impedes the overall productivity of the medical research sector.

New targeted funding from the MRFF could help recruit substantial, complementary research funding from the commercial sector as well as increasing the pool of sound research projects that firms like CSL can take forward to the later stages of development.

How often have we heard, here in Australia, about good ideas having to go offshore in order to be funded. I have heard this many times when I have done work in the commercial sectors in Sydney and Melbourne. This future fund gives us a capacity to do things which we could only have dreamt of doing some years back.

It has a very strong accountability framework, and I just want to quickly canvas elements of that framework. There is an Australian Medical Research Advisory Board to determine the strategy around medical research and innovation every five years and to determine our medical research and innovation priorities every two years. So we identify a strategy and then we prioritise elements of that strategy and then the Minister for Health and the cabinet, through the budget process, make the program level funding decisions based on the best advice provided and the strategy and priorities set by the advisory board. Payments are then made into the Medical Research Future Fund special account and from there they will go either to a Medical Research Future Fund health special account, under the control of the National Health and Medical Research Council and other expert bodies to manage distribution, or this special account may involve disbursements to the Council of Australian Governments' reform fund, which will disperse moneys to states and territories for payments—for example, to hospitals that are participating in appropriate research projects. In the case of the Medical Research Future Fund health special account, medical research institutes like the ones I mentioned before—the universities, corporations including charities and not-for-profits, as well as corporate Commonwealth entities like CSIRO—will have a capacity to obtain funding. So, as you can see, the funding is being spread around. This is not a situation where we will be saying that only one set of entities is able to be funded. There will be a broad church when it comes to the funding.

The Medical Research Future Fund will be managed by the Future Fund Board of Guardians, which has a proven track record of managing investment portfolios on behalf of the government and maximising returns over the long term. It has had a remarkable record with the Future Fund since it was established of maximising returns to the Commonwealth, and the bill requires that the Treasurer and the finance minister issue directions setting out the government's expectations as to how the funds will be managed and invested by the Future Fund Board of Guardians, including setting a benchmark return for earnings. The Future Fund Board of Guardians will have responsibility for preserving the capital of the fund in perpetuity. So this is not about raiding the biscuit tin—none of that. The capital will be preserved in perpetuity. What we are doing is investing the capital and then using the best expertise available to the Commonwealth through the Future Fund to maximise that return. That net interest return, which will be a mixture of investing in cash, in equities, in bonds and so on, will provide a capacity to maximise the return so that we will be effectively doubling the investment in health and medical research when the Medical Research Future Fund is up and running.

The Medical Research Future Fund will be a new secure revenue stream for medical research and innovation supporting a sustainable health system into the future. This is important. This is about continuity. We had a debate the other day about shipbuilding in South Australia and we talked about the virtues of a continuous build. It is a very important concept. Here we have this concept of providing certainty to health and medical researchers about the amount of funds that will be available over time, and innovations in health and medical research will play an important role in increasing the efficiency of health services and improving health outcomes. It will not be just about new health products and services, it will also be an investment in more efficient provision of health services. This will help to achieve even greater breakthroughs in years to come and improve the health and wellbeing of all Australians, and strengthen our standing as a global leader in medical research and give us the strongest benefit from new discoveries and improved healthcare practices.

I think it is very important to put in context some of the debates we have in this country about what innovation means. Innovation fundamentally means building an ecosystem. The framework in this bill builds an ecosystem from go to whoa, from basic research, through the practical health outcomes, underpinned by a strong, secure source of funding from the Commonwealth.

I will conclude on the following note. There have been some suggestions for further amendments to the bill. All I will say in that regard is that we must guard against excessive red tape. I went through the governance and accountability mechanisms. They are strong, they are transparent, they are world's best practice. So I believe the bill as it stands provides the best possible framework for turbocharging health and medical research in the years ahead. I commend the bill to the chamber.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Medical Research Future Fund Bill 2015. I am proud to be a member of an Abbott government that is so focused on ensuring that our best and brightest Australian medical researchers remain at the forefront of developing treatments and creating cures that will improve the lives of Australians and millions of people around the world. Innovative research is a key driver of better health care and health service delivery in Australia and internationally.

I come from Western Australia, a state that has always understood the need to be competitive and productive, and to be competitive and productive you need to be innovative. We have demonstrated that in so many ways—in mining, oil and gas and agriculture, and also now in shipbuilding. On top of that we already have a highly innovative medical research facility. We understand the need to keep driving innovation. This fund is an absolutely critical component in that.

Health and medical research has an important role to play in identifying opportunities and strategies to increase the efficiency of health services and ensure the sustainability of the overall health system. That is why last year in the budget we committed to creating the $20 billion Medical Research Future Fund, the biggest sovereign endowment fund of its kind in the world. It is truly innovative and truly world-beating.

The Australian government is establishing the fund as a dedicated investment vehicle to fund medical research and medical innovation, and, importantly, this funding is in addition to existing government funding for direct medical research. The new fund will help to ensure Australia continues to advance world-leading medical research projects and attracts and retains first-class researchers. Ultimately, the fund will deliver improved health and medical outcomes for all Australians. The fund will also be a dedicated investment vehicle to provide a sustainable and secure source of funding for medical research and innovation across all sectors of medicine. Importantly, it will also provide the opportunity to fund research strategically and address our national priorities in a very coordinated and cohesive way, which will undoubtedly complement existing medical research and innovation funding that exists today in our country.

The government is committed to boosting health and medical research and funding a medical and research innovation system, but, as we know, this does require a national approach. So, when looking to the future it cannot be just more of the same. We have to demonstrate greater value and return for the Australian people for their investment in this new future fund.

The fund will give particular impetus to medical research and innovation being translated into health and economic benefits. The fund will also complement the Medical Research Endowment Account operated by the government, and leverage the existing capabilities, including research peer review, grant management, and the provision of expert advice. The Future Fund Board of Guardians will be responsible for deciding how to invest the money in the fund in order to enhance the government's ability to make grants of financial assistance for medical research and innovation in a way that will most benefit the Australian people.

To ensure a high level of transparency in the decision-making process, and to provide for the effective disbursement of funds from the fund, the bill includes requirements for, firstly, an expert Australian Medical Research Advisory Board to ensure that spending from the fund is informed by a group of skilled leaders in the field of medical research, and it does so on the basis that it is provided by and the decisions are made by medical experts. Secondly, an Australian Medical Research and Innovation Strategy will be set independently by the board to prioritise Australian health needs. Thirdly, Australian Medical Research and Innovation Priorities will also be developed independently by the board to give certainty in the long term about the nature of investment activities to support the delivery of the national strategy. As we all know, certainty and continuity are so important in the field of research and development and innovation. Fourth, it will also include a requirement that decision-making mechanisms for the disbursement of funds must take into account the strategy and priorities worked out by the board and the experts.

Additionally, the health minister is to report every two years on medical research and innovation investment to ensure that it is truly accountable to the Australian people. Also, to further support the transparency requirements, it will be published online, consistent with Commonwealth reporting frameworks for grants. Further, the health minister will report to parliament every two years, advising the parliament, and through them the Australian people, how the grants of financial assistance for medical research and innovation were consistent with the priorities, as determined by the advisory board.

Once established, the fund will receive an initial contribution of $1 billion from the uncommitted balance of the Health and Hospitals Fund. Earnings from the fund's capital can be used into the future for health infrastructure and also for health purposes that are wider and more strategic than those allowed under the current HHF legislation. But the mechanisms will also help to bridge gaps in the existing system. They will ensure that medical research can make a greater difference to health outcomes.

The bills were amended by the government in the House of Representatives to ensure certainty and permanence around the government's policy approach for distributing the fund's earnings. Those amendments made it clear that the fund will have strong governance and expert leadership. It will support investment across the research spectrum from laboratory research to clinical trials, the commercialisation of new drugs or devices, and the translation of new techniques or protocols into clinical practice and public health improvements. These mechanisms will help bridge the gap into the existing system. They will ensure that medical research can make a greater difference to health outcomes. The bills were also amended by the government in the House of Representatives to ensure certainty and permanence around the policy approach to distributing the fund earnings. Those amendments made it absolutely crystal clear that the fund will have strong governance and expert leadership and will be accountable and transparent to all Australians.

The independent advisory board will bring extensive expertise from across fields including medical research, medical innovation, health policy, finance and investment and commercialisation. Commercialisation is particularly important. It is something, again, that we are focusing on in the West: how we can take research and development and innovation and commercialise it into the businesses and into the jobs of the future. Having the CEO as a member will leverage the experience and expertise of the organisation at the board level. The advisory board will provide advice to the health minister every two years on key medical research and innovation priorities for expenditure on the disbursement of funds. Additionally the health minister will be required to report to parliament every two years, advising how the grants of financial assistance have provided for medical research and innovation and are consistent with the board priorities. The transparency, the strong governance and the expert leadership of the fund are at the core of this fund's creation and have clearly been a strong theme throughout the drafting and amendment of these bills. Membership of the advisory board will be strictly skills based and will include professionals who collectively possess expertise and experience in medical research, policy relating to health systems, management of health services, medical innovation financing and, as I said, commercialisation.

It is really easy to see and to appreciate that this is truly a landmark coalition government initiative. It will be transformational not only for the 23,000-plus research professionals in Australia but also for the medicines industry in Australia, which stands behind them and is expected to employ at least double the current workforce into the future. It will truly provide funding for Australian scientists and medical researchers to become simply the best in the world. Some may be questioning why the creation of another fund is truly necessary. Innovation in health and medical research is absolutely a key driver of better health care and health service delivery. Health and medical research also has an important role to play in identifying opportunities and strategies to increase the efficiency of health services and ensure the sustainability of our health system in Australia, which I think all in this place would acknowledge is something that, as we have an ageing population and the cost of health keeps exponentially increasing, is vitally important. It is particularly wonderful that this fund will stimulate that innovation here in Australia rather than overseas. Probably the most important thing for all Australians is to make sure that patients get the best possible care we can provide and afford and to make sure the cost of that care is sustainable into the future. But if we are going to have a sustainable health system we cannot expect taxpayers to keep paying for things that are not effective and are effectively a waste of taxpayers' money. With a good bit of thought and innovation they could be done more effectively and therefore our health dollars and our research dollars could go a lot further. Finally the aim of this fund is to reduce future health expenses through medical research advancement and medical innovation.

It is for all of those reasons that this fund is being established under these bills. It is a dedicated investment vehicle to fund medical research and medical innovation in this country. The fund will undoubtedly help ensure that Australia continues to advance and lead the world in medical research projects, in innovative thinking and in innovative health care. The fund is also critically important not only to support the 23,000-plus research professionals we currently have in Australia but also to attract new researchers and to give young Australians an opportunity in this field. That is very important. We want to train, attract and retain first-class researchers and, as I have said, deliver improved healthcare and medical outcomes for all Australians.

One aspect of the fund that I am particularly supportive of is that it is capital protected into the future, thus providing a secure revenue stream dedicated to funding medical research, which means that future governments will not be able to raid the fund for recurrent expenditure. The fund will support the sustainability of the health system into the future and enable vital research that may lead to the discovery of new medicines and new technologies for treatments and cures. Some may ask why it is necessary to establish another fund. But this fund is clearly very different and far more significant. In fact it is going to be the biggest fund of its kind in the world. This fund has specific purposes that are absolutely consistent with the government's investment in medical research and medical innovation. It has the capacity to transform how medical research is conducted by encouraging innovation, supporting research and development and supporting the commercialisation of great ideas. The use of a capital protected fund ensures that this funding for medical research and innovation is available well into the future, which provides much more certainty for researchers to be able to develop from R&D to innovation and commercialisation and through into the market than they currently have today.

Under this bill, and as announced in the 2015-16 budget, the fund was to commence on 1 August 2015, subject to the passage of the legislation. As the legislation is still going through the Senate, we are hoping it will be passed so that it can be implemented straight away. Delays in the commencement of this fund are impacting on the level of investments and earnings of the fund and are currently now reducing the amount of funding available for distribution to medical research and innovation next financial year.

It was also interesting to me to note that the fund is a capital preserved fund. Net earnings from the fund will be distributed annually and will support ongoing investment in health and medical research. The funding will be distributed to address the Australian medical research and innovation priorities which, as I have said, will be developed by the board. Currently the bill does not contemplate the inclusion of philanthropic funds into the fund, but there are still provisions in this bill such that if a future government wanted to do so it could.

The investment of funds collected from health expenditure savings through the fund will make a positive contribution to reducing net debt insofar as they comprise cash or debt or debt-like securities. However, investments in other asset classes such as equities are not included in the calculation of the debt, and the $1 billion transfer of the uncommitted balance of the Health and Hospitals Fund will not affect the net debt.

It is for all of those reasons that I commend this bill to the Senate.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

It gives me great pleasure to rise this evening to speak to the Medical Research Future Fund Bill 2015 and Medical Research Future Fund (Consequential Amendments) Bill 2015. It was with great pride that I sat listening to a budget speech where we announced the fact that an Abbott government was going to make the landmark decision to commit significant funds to one of our nation's most competitively advantageous sectors, that being biomedical research.

We like to play to our competitive advantages in this country. I do not want to get onto the cricket team or even the Diamonds of late. But we did go all right with the Wallabies this week, didn't we? So I think that as a nation we have to pull down, ruck hard and we will go all right. When it comes to biomedical research, we definitely do punch above our weight internationally. That is why this government has chosen to commit significant investment to ensure that what we have done great in the past we can continue to build on, not only to assist domestic citizens with increased access to practices, technologies, serums and the like that can assist in the health outcomes but to take that capacity to the world.

Our competitive advantage as a nation has always been our creativity, our ingenuity and our tenacity. We think outside the square because we have had to do so over a long period of time. When I think about innovations and inventions and the spaces where Australia has punched above its weight, Australians have made significant contributions on the world stage as a result of the creativity and ingenuity of our research bodies: the black box; spray-on skin, thanks to Fiona Wood; the electronic pacemaker from Sydney Women's Hospital; Google Maps; the medical application of penicillin by Florey, which saved hundreds of thousands of lives in World War II; the bionic ear, and we know the great story of Cochlear and Professor Clark; not to mention our winged keel, permaculture, the ultrasound scanner et cetera. We have made a significant contribution to the world through our research. When you go through our top 20 contributions as a nation, the vast majority are in the medical research sector. That is why our government have chosen to play to our strengths, to get out on the field, to do what we do best and to invest where we know we will get a great return.

It is not just a financial return. The only return for those of us who come and serve in this place is to ensure that the lives of Australians are better after we leave than when we arrive. That is why a fund of this magnitude, focused in the way that it is, will make such a significant contribution to the health outcomes for Australians over a long period of time. I am very proud to be part of a government that, under projections, by 2019-20 will see $20 billion being invested and the fund disbursing funds to our researchers for creative projects. This will have benefits not only for Australia and Australian researchers and Australian citizens but also for our universities, our hospitals and our private institutions that will be able to access this type of money—money unheard of at the moment.

Our researchers go through a very competitive process, and there are more wonderful ideas out there and capacity in our research bodies then we have dollars to spend. With something like this not only can we harness that energy and creativity and focus it into projects that will deliver great benefit in terms of health outcomes but we have also got to think about the commercialisation opportunities and how transformational that will be when we look at advanced manufacturing opportunities. The additional industries that will be spun off this research over time will be absolutely fantastic.

Four hundred million dollars will be committed over four years, which is a significant injection. This is in addition to the significant investment the Australian government makes into medical research, because we are a government that is actually interested in investing in 21st century technologies. We know that we cannot continue to rely on the technologies of the past and the industries of the past. That is why we have identified our competitive advantages. We have a competitive advantage in international education, particularly in my home state of Victoria. It is the No. 1 export. That is where we need to be focused. We know that agribusinesses are underpinned by good science and industry policy, free trade agreements, and by managing our land appropriately in giving consideration to the environment and ensuring that regional communities are underpinned by investment in agribusiness. Similarly, our competitive advantage lies in medical research.

This type of fund is going to allow us to attract high-calibre researchers from across the world. That is going to assist us to move our universities through the international rankings, which will have flow-on effects for the international student market. More and more internationally accredited researchers in the biomedical sphere can say: 'I'm struggling to get that trial up and going. I'm struggling to get the funding for that new practice that I saw of the innovative way that the nurse was interacting with patients, and the interesting technology and the way they were using that particular machine in the hospital. Maybe we could use that in another way and get some real productivity gains.' It is in those creative spaces where our very, very clever people out there in the research world can get a spark of an idea and do something fabulous that none of us have ever thought of. Being able to have a pool of money that those people can be attracted to will assist in so many other ways throughout our economy. It will be very, very exciting to see internationally renowned researchers being attracted here to Australia.

The types of projects that are going to be funded under the medical research fund will include everything from work that needs to be done in labs through to clinical trials and commercialisation issues. We are going to be looking at new technologies. There will be room for new protocols to be established that will impact and affect not only patients but also the interoperability of people within a hospital system more broadly. There will be new practices—whether they be for physiotherapists, dentists, GPs or surgeons—to increase productivity and safety for the health outcomes. As Senator Reynolds mentioned earlier, the focus of this fund has to be on ensuring better health outcomes over time because we know the challenge is great, and it is only going to get greater as the Australian population ages. We have the ingenuity and now, thanks to the Abbott government, we have the funds available to invest in the type of research that is going to make a difference, because the challenge is very, very great.

We are trying to get the passage of this bill through the Senate, and the delay is simply going to mean that these lifesaving projects and these lifesaving research efforts across a wide spectrum of areas will start later. It is going to be a longer time before we get the next cochlear bionic ear developed. It is going to be a longer time before we see new and innovative ways to use penicillin. It is going to be a longer time before we create something as innovative as spray-on skin. That is the opportunity disadvantage, and the reason that this is a problem is because it is not an economic disadvantage—it is about real people, real lives and real health outcomes that we will be delaying if this Senate chooses to continue to delay supporting this wonderful initiative. It is the largest fund in the world dedicated to this type of research. We need to be very proud as a nation that we are prepared to do this.

One of the key questions that researchers like to know when they are applying for funds is who is going to make the decision on where the money is coming from and which projects get funded and which do not. This is going to be a strategic, appropriate, independent decision-making process so that academics can have confidence in the outcomes that this fund will be seeking to achieve. Each year the Future Fund Board of Guardians—I know other Senators have talked about the Future Fund Board of Guardians' role in this process, so I will not go to that—will advise the finance minister of net earnings that can be withdrawn from the fund and invested in medical research and medical innovation. They are going to do their best to raise as much money for this fund as they can. That is absolutely appropriate and exactly what they need to be doing. On an annual basis they will let the finance minister know how much the Medical Research Future Fund will have at its disposal to distribute. The government will then make decisions through the annual budget process and be guided by a national medical research strategy. This is about strategically applying the funds—looking where we can get the most bang for our buck and the best health outcomes. This is about the greatest commercialisation opportunities to create new jobs in a new economy, in the new century and building our great history as a nation around biomedical research.

The national medical research strategy will inform the government on how to allocate that money and on how to best use these funds to support medical research and medical innovation priorities. This process will ensure that taxpayer money invested in the fund is protected. The future fund board will aim to provide certainty to the medical research sector by assessing the fund's net earnings in such a way as to minimise undue volatility in the amount available for distribution from year to year. Because, when you go out there and talk to researchers, particularly those involved in the scientific field, you see that it is about that continuity of the finances being available over time. The government is currently conducting a review of research. I get a lot of feedback around the need for research projects to be approved over a much longer period so that you can fully develop the program, fully run it out and indeed assess it at the end so that the learnings can be shared amongst the wider academic community. So I think it is important that that continuity of disbursement be absolutely reassured for the research sector.

I think the exciting thing, though, for the Senate to note about this particular bill and what it is setting up is who can actually receive the payments. It will not just be CSIRO or hospitals. Indeed, medical research institutes, universities, corporate Commonwealth entities and corporations can receive grants for medical research and innovations, as can the states and territories. As a Victorian I think that is absolutely fabulous. We have a great history of investment in science and research, and in spin-off industries, and we are looking forward to getting our hands on—I bet—as much of this money as we possibly can. So I would challenge Senator Muir and Senator Madigan to get on board for Victoria's sake, because we have a great history as a state in absolutely capitalising on our ingenuity and our brains in this sector and the fact that states and territories are able to actually be part of this is a great story for the great state of Victoria.

Every year, as a part of the annual budget process, the health minister will develop proposals for medical research and innovation funding through the Medical Research Future Fund, subject to the maximum distribution available for disbursement, which the finance minister will advise themof as a result of the advice given to them from the future fund's governors. Then he or she will submit that to cabinet for consideration. The health minister must take into account the priorities set by the independent advisory board. We do not want politicians deciding where the best project is because, if I had my way, they would all be in Victorian institutions, creating jobs for Victorians and creating education opportunities and research opportunities for my great state. So it is a great thing that the health minister must take into account the priorities set by the independent advisory board and seek those opinions, which will be delivered to him or her to take to cabinet.

Cabinet will consider and approve program proposals as part of the budget process. Annual disbursements for medical research and medical innovation, including the NHMRC, are expected to be around $1 billion from 2023-24 onwards. This will result in a doubling of the existing health and medical research funding, from 2023-24. That is a great story. We are investing in the future; we are investing in our brains. For a very long time we have gotten rich on the back of the sheep. We have dug things up and we have shipped them off and we have been very, very good at that. It has meant that we have developed as a wealthy nation. Regional Australia has delivered most of that prosperity over our 200 years. However, this particular future fund recognises that our future as a nation is in smart technology, in advanced manufacturing and in the creative in the 21st century. It also recognises that we can make a significant contribution to the world's thinking around the human condition and some of the challenges that we will be facing as a species going forward and the significant contribution that we can make, based on our expertise.

One concern that has been raised with me with respect to this bill is around the question of the public accountability frameworks that will be put in place to ensure public transparency on the performance of investment for the Medical Research Future Fund. Again, the Future Fund Board of Guardians will continue to be subject to the financial accountability framework that the government has in place for all Commonwealth agencies. It will be required to provide annual reports, audited financial statements and quarterly portfolio updates reporting on fund performance. And that is a good thing because it will be able to be questioned by senators if the need arises. So the greater Australian public can be assured that the Senate will continue to watch over taxpayers' dollars and the annual reports of the future fund through the estimates process. If you have any questions, see your local senator.

Grants funded from the Medical Research Future Fund will be published online, consistent with the Commonwealth reporting framework for grants. So with respect to who gets the money, where it has gone, what sort of projects will be funded it will be very transparent. That is exciting, transparent and accountable. We are happy to be judged on the decisions we make. I think that is a form of good governance, it is part of our process of cabinet and it is something that we as a government and indeed a nation should be very proud of.

Further to this, the health minister is required every two years to prepare a report which will provide meaningful information to the parliament on all funding provided by the government for medical research and innovation from the fund and to detail how this funding is consistent with strategy and priorities set by the advisory board. Isn't that great? So you are not going to get a health minister making the decisions, doing the deals. They will have to be accountable with respect to the advice they are given by the independent advisory board, that they then take to cabinet and discuss. Then, two years later, they have to actually detail how the decisions they have made are consistent with that strategy and that advice.

I am very, very proud of the meticulous nature with which our government and our ministers have approached this particular fund's set-up and how it is delivering on our commitment to be an accountable, open and transparent government. This says it all and I am very, very proud of it.

Confucius once said, 'When you breathe, you inspire. When you do not breathe, you expire.' I think the Medical Research Future Fund is an inspirational, landmark decision by a government that is continuing to inspire, and I just hope that the Senate chooses to come on the journey with us.

Penny Wright (SA, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on the Medical Research Future Fund Bill 2015 and related bill. This is a bill which provides for the establishment of the Medical Research Future Fund, the MRFF as it is colloquially known. I want to put on the record, and reiterate essentially, what the Leader of the Australian Greens, my colleague, Dr Richard Di Natale, has said, and that is that we are keen to support health and medical research in Australia. We welcome the intention of the MRFF—that the fund strategies and priorities will foster innovation and translation. The Medical Research Future Fund is a transformative initiative that will provide significant funding in Australia and support innovative work to bridge the gap between pure research and the application of research results in the field.

It was only fairly recently in my career that I came to hear the phrase 'translational research'. I do not have a scientific background as such. Although I am very interested in science, I come more from a humanities and legal background so I had not actually heard that expression until I met a very impressive mental health practitioner, Dr Jayashri Kulkarni, who is associated with the Monash Alfred Psychiatry Research Centre, who talked to me about the importance of having translational research, particularly in relation to mental health research. So, as the Greens spokesperson for mental health, I am going to be making a particular case in speaking to this bill about the desirability of having much more dedicated and directed funding for research into mental health. I think it is not difficult at all if you look at the evidence to make the case for that.

Let us go back to what we know about mental ill health prevalence in Australian society in 2015. Mental illness is the third-highest cause of disability and premature death in Australia. In fact, it is very well accepted that one in four of us will experience some form of mental illness or mental ill health in our lifetimes. We also know, and it is not really contested, that mental illness costs the Australian community billions of dollars a year in both direct and indirect costs.

Recently, the chair of the National Mental Health Commission, Professor Allan Fels, was on the record talking about the incredible cost to the Australian community in terms of personal cost in lives lost and productive lives lost and participation, and also the financial cost to the community in lost productivity that flows from mental ill health in Australia. We know that it costs us all a great deal of money as well as quality of life. In fact, there is report after report that establishes the cost of untreated and undertreated mental ill health in Australia. A national survey of people living with psychotic illness in 2010, which was overseen by the organisation, SANE, found that for people with psychotic illness—just as one example—education achievement was low; 78 per cent of those people were unemployed; 16 per cent were either homeless or living in supported group housing; and 74 per cent were single. It does not take much imagination to understand the incredible loss of productivity just in that subgroup of people who experience mental ill health in Australia.

The fundamental problem is that the treatment of mental disorders in Australia has not progressed sufficiently. I think our awareness of the prevalence of mental ill health has progressed. Our understanding of the need to get adequate treatment has progressed. But in fact the treatment of mental disorders has not progressed at the same rate, particularly when we compare it with treatments of other illnesses, which once were much more debilitating than they perhaps are now—illnesses like cancer and heart disease. Once, decades ago, a diagnosis of most forms of cancer would have been a terminal diagnosis, and with amazing treatments and research that has occurred in those intervening decades there is a lot more hope for people who experience those sorts of illnesses.

So, despite the fact that there is such a huge financial loss from untreated and undertreated mental illness in Australia, only about 3.5 per cent of Australia's total medical research budget, for instance, was spent on research into depression and psychosis. Depression is a very prevalent mental ill health condition in Australia, and psychosis, while less prevalent, has very, very debilitating and life-affecting consequences for people.

Basic science research is important. Speaking to Dr Kulkarni and others, I have come to understand the absolute importance of having that research then translated forward into the development of new and effective treatments for people with mental illness, so that practically speaking there is absolutely important hope offered to those people. Early intervention is necessary but its impacts are only as good as the treatments that are available.

Service reform is also important, and there is huge a debate, conversation and dialogue going on at the moment in Australia, particularly on the back of the most recent National Mental Health Commission's review report as to how we improve service provision. But ultimately services will be impotent without new treatments to deliver to sufferers. So there is an absolute need to have better mental health research and translational research to provide the treatments that are needed.

I was interested to see that there was a very impressive and interesting article in The Medical Journal of Australia that was published in 2011. The authors of that article were like a who's who of some of the most influential thinkers and practitioners in the mental health space in Australia. So we had Helen Christensen of the Black Dog Institute, Philip Batterham, Ian Hickie, Professor Pat McGorry, Philip Mitchell and, as I mentioned earlier, Dr Jayashri Kulkarni. They did some research into comparing funding for mental health research between 2001 and 2010. They were really questioning whether or not the gap which we are aware of in relation to the proportion of the health research dollars that is going to mental health research had narrowed over that decade. They compared it with the research being done into other national health priority areas.

The findings of that research, reported in that Medical Journal of Australia article, were really concerning and did in fact confirm the fact that most people know that mental health research does receive lower levels of funding. They started off by looking at particular illnesses like cardiovascular disease and cancer research. They found that mental health research had received 9.5 per cent of funding, cardiovascular disease had received 21.7 per cent of funding and cancer research had received 14.9 per cent of funding. When they made adjustments for the burden of disease, they looked at things like—forgive me for the acronym—DALY, which basically is a way of trying to apportion the significance and the implications of particular illnesses and conditions on people's lives and functioning. DALY standards for disability adjusted life years. When they made adjustments for the burden of disease they found that diabetes, asthma, cancer, arthritis and cardiovascular disease, all important and life-affecting conditions, all receive proportionately more research dollars per disability adjusted life year than mental health conditions such as depression, anxiety, psychosis and so on.

For people who are very aware of the prevalence and the effects of mental ill health on people in their daily lives, that causes us a great deal of concern. In a sense, I suppose it reflects some kind of illogical way that we have developed our funding in the health system generally in relation to treatment of mental ill health. It is almost as though we have some kind of mind-body split where we privilege illnesses and conditions from the neck down perhaps more than we do illnesses and conditions which affect people from the neck up.

Mental health has traditionally always been neglected in terms of health funding dollars. There is a common understanding that in terms of burden of disease generally and mental health funding while the burden of disease associated with mental ill health is 13 to 14 per cent, in fact the proportion of health spending that is directed towards mental health funding is about half of that at six to seven per cent. So for a long time mental health advocates have been saying that we need to double the funding that is available to meet the incredible unmet need throughout Australia. Those people who have been following the sorts of work I have been doing over the last four years as spokesperson for mental health for the Greens will know that I have done a lot of work particularly in relation to unmet mental illness and mental ill health needs in rural areas of Australia. So while the funding for the burden of disease overall is about half what is needed, it is even less than that in rural areas, particularly when we acknowledge that 30 per cent of Australians live in rural, regional and remote areas and there is a great lack of both community based and clinical services, that there are too few practitioners who are qualified and living and working in those areas. That is a real problem for country people. Unfortunately we see the results of that in the recent Garvin institute report which came out last week and showed that country people are 66 per cent more likely to take their own lives. That is just one example of the effect of that unfairness and disproportion of funding in the system which does not flow on to people living in rural, regional and remote areas.

The Australian Greens are very clearly on the record as calling for increased funding of mental health research. Indeed after having spoken to Dr Kulkarni and being very impressed with the proposal which she brought to me in relation to a national institute of mental illness research, which would look at coordinating the often wonderful, exciting research which is happening in different institutions across Australia, with a need to coordinate that the Australian Greens developed comprehensive and thorough policy to support more mental health research that we took to the 2013 federal election having had it costed by the Parliamentary Budget Office. We did that on the basis that we understood that there is a desperate need for the development of new treatments which offer hope particularly for people who live with chronic and debilitating illnesses like schizophrenia, bipolar disorder and schizoaffective disorder. We need the development of new treatments for mental illness. Similarly for people who experience chronic depression, GPs and specialists need strongly to have tools in their tool kit which can offer people hope when they come to get the assistance they need.

On the basis of knowing that mental illness is the third highest cause of disability and premature death in Australia and does already cost the Australian community billions of dollars, how can we argue with the idea that investing properly in appropriate research and translational research and treatments would not be a good reward or good down-payment on that investment? The Australian Greens came up with a proposal to invest $150 million over three years to establish a national institute for mental illness research as an overarching, supervisory body for mental illness research in Australia. It was based on the well-thought-through proposal and that is still there. We are not talking about that today. We do not have the option to be promoting that but I hope I have made the case for much more dedicated and significant funding for mental ill health and mental illness in terms of the medical funding of research generally.

The Greens will be supporting this bill but I will be putting in a particular plug that when decisions are being made about which research should be funded that mental health stops being a Cinderella area and gets the priority it deserves.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to rise in support of this bill, the Medical Research Future Fund Bill 2014, and related bill which have come before this chamber. But, before I talk about these bills, I want to acknowledge Senator Wright's contribution in this debate and indeed her much broader contribution. In the break, Senator Wright announced that she was leaving this place. I am not sure when that is actually going to happen, but I would like to acknowledge your great work in South Australia, Senator Wright, especially in those areas which you spoke of so eloquently. I know you are very passionate about the area of mental health, and passion is exactly what you need to have in this place to drive a cause.

Recently our Prime Minister said to me privately, 'You have to stand for something. You have to be known for something in this place. You can never leave this place not being known for something,' and I took that on board. The day that you do leave this place, Senator Wright, I will remember your contribution in the area of mental health outcomes for Australians—in particular, the mental health outcomes for regional Australians. As we know, for a range of reasons, there is a disproportionate amount of dysfunction and even, tragically, suicide in the regions and our Indigenous communities stemming from mental health issues. I have watched your contribution in the area of mental health and I have an enormous respect for it. So thank you for that.

I was also heartened to hear that the Greens are going to support this bill. It is a landmark bill. It is a bill which takes into account a lot of what we in Australia have been subject to for many years—that is, the ebb and flow of budgets and budget pressures. With the establishment of the Future Fund we saw a demonstrably successful piece of policy which is now delivering dividends for all Australians. All Australian saw the benefit of that and are now seeing the benefits of that. This bill looks to try to address what has been an issue throughout history. Invariably when governments come under pressure to balance their budgets they look to areas of expense, and traditionally the biggest area of expense in any government's budget is the health area.

In quarantining what will be a significant amount of money—in its final form, $20 billion—the Medical Research Future Fund will become the biggest endowment fund of its type in the world. The importance of that and the commitment to that by this government cannot be understated. This is a particularly important issue when it comes to providing security to ensure that the research professionals in the medicines industry can stand by all the people they employ and we can stop any leakage of our incredibly smart and dedicated scientists and health professionals to other countries and we are able to keep them here, because they will know that this government and subsequent governments will be committed to the cause.

In this bill there are a lot of mechanisms. There is obviously the provision for revenues that will be provided. A sum of $1 billion initially has been allowed for in the next 12 months, and I will outline later in my speech how that has been achieved. Importantly, it will provide $400 million over the next four years, and that is in addition to the government's existing commitment to direct medical research. The establishment of this fund will not only encourage innovation and medical research but also provide economic benefits, which I will outline later in my contribution. There is nothing like money to attract money, and this will support investment across the research spectrum—laboratory research, clinical trials, commercialisation of new drugs and devices and the translation to new techniques or protocols into clinical practice and into public health improvements. As I say, this bill provides for the mechanics of creating credits to this fund, provides a mechanism for debiting the funds and provides how the fund is going to be governed and how it is going to be administered.

The fund will bridge gaps in the existing system. Successive governments, no matter what persuasion, have seen that there is a need. We have seen knee-jerk reactions to various programs, and we want to smooth out the highs and the lows so that we can get a translation of research projects into applied technologies and practices and ensure that medical research for the longer term does not suffer any setbacks which would put us behind in terms of achieving the best health outcomes for Australians. The fund will provide for us to be an innovative nation and provide for us to commercialise our research work. Who could forget the work of Professor Graeme Clark AO in the development of the bionic ear, a multiple-channel cochlear implant?

there are so many stories.

I see Senator McEwen is in the chamber on the other side. She would be well aware of Dr David David and his great work. He grew up in Adelaide. He gained his medical degree in 1966. He set-up the Craniofacial Unit, now the Australian Craniofacial Unit. Three decades since, he and his team of dedicated professionals have helped restore dignity to thousands of patients. In his hands, complex surgical procedures seem somewhat commonplace. He does, indeed, perform everyday miracles. To see the work that is able to be carried out with the necessary public funding to change the way people live their lives, in his case, is profound.

Dr Bill Griggs is another local. He is involved in innovation in trauma surgery. He has cared for victims of events where there have been multiple casualties. He is best known and lovingly remembered for his exceptional work after the Bali bombings and the 2004 Boxing Day tsunami.

All of these people are products of the great research work that is able to be carried out here. Senator McKenzie referred to spray-on skin—another incredibly important advancement for burns victims. We have to be and continue to be a nation leading the medical technology race. It is not just about the health outcomes of Australians; it is not just about increasing the longevity of people's lives; it is about increasing the quality of people's lives.

This fund addresses the commercial issue of money. I love talking about money because you cannot do anything without money. People say to me, 'Money is not everything.' If you have got it, you can choose your own level of poverty, I say. This innovation fund will be governed by a mix of specialties from science, administration and governance, and they will identify medical research projects and innovation priorities and give certainty to the nature of investment activities to support the growing needs of what is required for the commercialisation and the sustainment of this important area.

I am not going to talk about the boiler-plate of the bill which talks about independent advisory boards and their role. I am not going to talk about the ministerial provisions to report to government every two years. They are all contained in the legislation, as you would expect that a proper government would have in place. There is a transparent listing and regular updating and listing of the priorities of the fund, and how the fund is administered. The strategy will be set on a five-yearly basis and it will take into account the national health needs, the gaps in current investment and the strategic sequencing needed to deliver the best results for the expenditure.

It also will strategise the priorities which are expected to ensure that program level funding from the fund has a strong business case. I have talked about the commercialisation of our research. The CSIRO is well-known for it. Ranging from sunblock to wifi, they are famous for their contribution to the planet in terms of the research and science that they have deployed. But this fund will address health and welfare. It will be the biggest fund in the world. The governance of this fund, the people behind it, will ensure that they coordinate research and innovation programs that will minimise duplication and leverage the expertise which we have in this country and use existing medical research arrangements. They will ensure that everything that we do complies with what is internationally accepted in terms of medical research and innovation, including peer review and the provision of expert advice where required. The innovation of the fund will always be directly proportional with medical research. It is just a fact that medical research is a great consumer of cash. It goes to the very core of our being to improve our way of life, the way we live and our quality of life.

I am going to be a little parochial, if I might, and talk about how this relates to South Australia because that is my home state. I had the pleasure several weeks ago of attending the newly constructed South Australian Health and Medical Research Institute. In Adelaide, we affectionately call it the SAHMRI building. It is west of the train station on North Terrace. Some call it, also affectionately, the 'cheese-grater' because of its design and out-there architecture. It houses some of the smartest minds that his country has in the fields of science and medical research. These people will be directly affected by this fund. There are about 450 people there now and there is capacity to go to 550 people.

We are hoping that we can get the cyclotron there which works in conjunction with ANSTO, the Australian nuclear organisation—the government-run organisation that is so well-reputed around the world

It will be the only one in South Australia, and we can use that for making radioactive tracers that will be used in the early detection of cancers. These things are expensive, and when health budgets are cut by state and federal governments these things are put on a backburner. But not with this fund. There is a compelling argument to deploy this facility and the scientists that go with it for the early detection of cancer, in order to turn the outcomes for people's lives around much quicker. These are typical examples of how the benefits, the dividends, of this fund will flow and support the way in which we live—not just in South Australia but also in Australia, in Asia and the rest of the world.

The SAHMRI building and research institute is run by Professor Steve Wesselingh, a very smart man who was obviously attracted by the long-term commitment of both the federal and state governments to that facility. He assumed the role of the inaugural executive director in October 2011. Without the commitment to that facility and the programs within that facility, we would not be able to attract the world-class expertise of people like Professor Wesselingh. I include Senators McEwen and Wright in this contribution, because they were with me on the day on which the Prime Minister, the Hon. Tony Abbott, opened this building in November 2013. It was a celebration because it marked the beginning of a new era for research in South Australia, and it was certainly emblematic of the future of the state's economy and the health economy. It is a big marker in time as to where we felt our economy should be turning to, and medical technologies will be a very big part of the way in which the South Australian economy will grow.

Visiting places like this provides you with the momentum to come and talk about these things. When I was there with Professor Wesselingh, he talked about the work that they do in Aboriginal health—the Wardliparingga Aboriginal Research Unit is housed in the SAHMRI building within the institute. Their research is focused on a significant gap between health status and life opportunities available to Aboriginal people as compared to other Australians. This is topical, because I have the Minister for Indigenous Affairs here in the chamber in his ministerial role. He would, no doubt, know of the great work that this and other institutions are doing to improve life outcomes for our Indigenous communities. Also within the medical research institute in South Australia is an overarching goal to foster excellence in a full spectrum of cancer-related research from fundamental genomic discovery and developmental biology to translational research and the development of innovative clinical trials.

It might sound complex, but it all takes cash. Research and innovation, by their very nature, have to have somebody paying for it and, when it is untested and you are in new ground, that is the role of government. In establishing this fund and going about this in a way in which we can deliver health outcomes and fund health outcomes for the next two generations, we know that when we leave this place after setting up this fund—by passing this bill—that we will have left the medical research institutes, the like of SAHMRI, all over Australia in very good health.

Matthew Canavan (Queensland, Liberal National Party) Share this | Link to this | Hansard source

It is a pleasure to rise to give further support to the Medical Research Future Fund Bill 2015. It is a very important initiative that supports what is a very successful industry for our country—an industry that provides a massive number of jobs but, more importantly, has huge future potential going forward. It is a great service that this government has committed such a high level of resources to back and to underpin that sector and to make sure that we fully take the opportunities that are arising in the sector.

I will start with a more prosaic example from my home state of Queensland. Recently I had the opportunity to visit a medical products firm called Cook Medical at Mount Gravatt, just south of Brisbane. Cook Medical is actually part of a large overseas conglomerate based in the United States, but it does a substantial amount of manufacturing here in Australia. Indeed, the headquarters of Cook Medical choose to do this manufacturing in this particular part of Australia because of the available skills and capabilities, and because our general environment is conducive to the manufacture of these products.

We should celebrate businesses like Cook Medical more than perhaps we get to do, because they produce fantastically innovative and wonderful medical products that save people's lives and improve the quality of people's lives. Cook Medical produce a range of products, but specialise in stents. I did not know anything about stents until a few years ago when my grandmother got quite sick and had a stent inserted. I suppose when you first hear about how these things work you wonder who comes up with this sort of idea? 'We'll stick something up your leg and put it all the way up to your heart and that will make you feel better'. I feel for the first person who had to undergo that operation as a guinea pig, but it did work. We have had stents for, I think, less than 20 years or so, and they have saved or extended tens if not hundreds of thousands of people's lives. They have certainly extended my grandmother's life so I am very thankful for it.

Cook Medical produce stents for people like my grandma here in Australia but they also export them around the world. Indeed, when I went to see them they were producing stents for patients in Japan. They had received an MRI scan of a Japanese patient and they looked to see what specific product they should produce and supply to that person. It is amazing technology and it is only going to grow. It is probably going to become more customised and produce more opportunities for Australia to be part of this sector—not only to be in the business of saving people's lives but also to create jobs and opportunities for very smart young Australians who want a future career. I met a young lady there who had just come out of Griffith University in Brisbane, and she had been given a job as well as an opportunity there as a graduate. It is not just for the tertiary graduates; they have a whole floor of people manufacturing stents. It is pretty much what you would see in a textiles or clothing factory: rows and rows of people at sewing machines and knitting facilities, creating stents.

It has clearly become difficult for business in Australia to specialise in things like textiles and clothing, which are relatively labour-intensive forms of manufacturing. It is manufacturing like this that we do have a future opportunity in, because it is value adding in a business that is of high value and that has a high level of customisation; therefore, the issues of economies of scale and mass production are not as prevalent or as keenly felt. Cook Medical explained to me that they would not think of outsourcing the manufacturing of these products overseas because of the natural advantages they have here in Australia, where they are close to the design team who design the stents. It is very important to have that communication between those who design the products and those who manufacture them, because what can seem like a good idea in theory or design may not be practical when it comes to manufacturing. It helps the designers to get things right when they have got the people actually making the products so close by. So it is a great positive, new story for our manufacturing sector, for our medical sector and for our innovation sector. It is these sectors that we should seek to promote and support more, and it is a great initiative of the government to establish a substantial medical research fund that we hope to grow to $20 billion over years—a fund that will be starting with $1 billion from the Health and Hospitals Fund of the former government and a fund that we hope to provide $400 million in additional research and development funding over the forward estimates.

That sort of money will not just fill a gap in the medical sector; it has the potential to fix some of the issues that we have in our broader innovation sectors. Right now we have a Senate economics committee inquiry into innovation, and one of the issues that have arisen in that inquiry—it is not one that is new to policy making but it is one that has been emphasised in that inquiry—is that we do very well as a country at producing ideas. We do very well at having high-qualify researchers. We rank highly in our ability to produce high-quality research and our universities are remunerated to make sure, through the ERA rankings, that they do produce high-quality research. The issue we sometimes have is translating that high-quality research from good ideas and good papers published in good journals to actually commercialising them into products that create jobs and wealth. We do fall down on those measures. So, while we are one of the top countries in the world for producing those published papers, we are at the bottom of the table in the OECD in terms of commercialising those ideas into some kind of saleable product.

I note that the detailed projects that the Medical Research Future Fund will fund are yet to be worked out and will be worked out through the governance arrangements defined in this bill. I do hope that there is a focus by the Australian Medical Research Advisory Board that will be established under this framework. I do hope that they do consider the need to concentrate more on commercialising the good work that we already do in the medical field into commercial, saleable products that support businesses here in Australia. I note that the advisory board will develop an Australian Medical Research and Innovation Strategy and Australian Medical Research and Innovation Priorities. I do hope that those sorts of things are considered. I am sure that by the time that strategy and those priorities are set, the Senate economics committee will have wrapped up and reported, and perhaps we could point out a few things in this field that we think should be done. We do have a very great opportunity here with this fund, and it would remiss of us not to completely maximise that funding opportunity.

We are hoping to establish the $20 billion fund as a capital reserve, as something that would put a base into medical research funding in this country, and I think Senator Edwards may have raised a point about how important it is that we do have some stability for people in this sector. Many of the products that are developed in this sector—indeed, probably most of them—require an investment timeline, a pay-off period of decades, not just years. It is a very risky area where investments may not pay off. I think it is a sector that requires, more than most, some form of stability from government, some form of continuity, and I very much hope that, if this bill is passed and if this fund is established, we do ensure over many parliaments and different governments that it continues to fund research in a stable and continuous fashion for the medical research sector. It is not a sector that could cope well or respond well to ups and downs of different funding and different decisions

If we were to do that, it would dent confidence in that sector and perhaps limit the leverage this fund might generate in the private sector. While this is a substantial investment of public resources into medical research in our country, it is something we hope would be leveraged to create an even more substantial investment from the private sector in medical research in this country. That will happen only if a stable and consistent policy environment is delivered.

We will make sure the new fund ensures that Australia continues to advance the world-leading medical research projects we are lucky enough to have housed here and that we continue to attract and retain first-class researchers and ultimately deliver better health outcomes for all Australians. One thing we do have to tackle, not just in this country but across the world, is ensuring that we can continue to improve how we deliver health services in a cost-effective way. It is no secret that health funding, both public and private, both in this country and around the world, is growing at very high rates. The pressure will probably only continue as our population ages and new customised medical products are developed. But we do have a limit, and we need to make sure that the health budget we do have in this country, which is substantial, is spent in a way that delivers the biggest bang for the buck. If we do not do that, two things will happen: we will have to find more money to pay for these things, or else restrict services that are available, and we will not be able to fund as many lifesaving and life-improving products as we could.

So, we have an obligation to make sure that our hospital and health funds more generally are spent efficiently and that investments in research and development through this fund make sure that that happens. That will ensure that we deliver a sustainable health system into the future and will enable vital research that will lead to the discovery of new medicines and technologies for the prevention, treatment and care of all Australians. All Australians stand to benefit from ongoing investments in medical research through this fund—both directly, through improved health, and indirectly, through enhanced productivity and economic growth. As I said earlier, it will also make sure that we build on the huge opportunities that exist in our medical research and innovation sector and help deliver a more sustainable health system.

Various funds have been established in the past few years by different governments, and some have asked, why establish a new fund? Well, with this fund we want to achieve a few things. We want to focus on research, because we think that is a great opportunity for our nation, as I have outlined, and we want it to be capital protected so that we have an ongoing, stable amount of money there to support research—money that is not dived into for various, sometimes politically motivated, programs. And we want to deliver a national approach to medical research and innovation across the entire country. With that in mind, this bill provides for funds to be distributed to state or Commonwealth corporations that are engaging in medical research.

We announced in the latest budget that this fund was due to commence on 1 August, subject to the passage of this legislation. Obviously that date has passed, but once the legislation is passed we will establish the fund and transfer that $1 billion from the Health and Hospitals Fund. The delay in the commencement of this fund will impact the level of investment earnings over time, but the estimates previously provided in the budget will be revised later this year. This is a fund that will eat what it kills, basically: whatever it makes and funds, it will be able to spend. So, while there are certain estimates in the budget, the finalised spending of this fund will be determined by the earnings of the fund itself, which will be governed by the Future Fund, as are other funds in the Commonwealth.

I applaud the government for focusing on this area, because I think there are huge opportunities for our country in medical research. It already underpins thousands of jobs. It is an area that has been highlighted both by the Chief Scientist, Ian Chubb, and in the government's STEM policy, as well as industry policy—industry growth centres last year. This fund helps and complements those policies to ensure that we do in fact take the great opportunities that exist to provide health care to Australians and to the burgeoning middle class in Asia, which will certainly be demanding better health outcomes. And what better country to provide those outcomes than one in the same time zone that has a proven track record and that is providing innovative and new health outcomes?