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Rebalance research funding, Australian universities say


More money for university R&D and basic research will pay off, Productivity Commission told

Private R&D is failing to deliver on Australia’s cash investment, Universities Australia has told the Productivity Commission, a government research and advisory body.

In a submission to the commission’s inquiry into national productivity, the vice-chancellors’ group said that the A$2.7 billion provided in R&D tax breaks in 2019-20 gave the government “almost no say in how that R&D should be focused in the national economic or commercial interest. It is also unclear how government measures the value or return for this investment.”

It said that the recent focus on research commercialisation and industry-targeted research represented a “narrowing” of research funding. “Universities Australia supports a balanced approach to research funding which also supports the critical role of discovery research,” it said.

The group called for more spending on university-based research, claiming that if spending were increased by just 1 per cent, there could be a A$24bn return over 10 years. Chief executive Catriona Jackson said that “there is work to do to raise Australia’s R&D investment”.

“A shift in public support for business research and innovation—towards direct support and away from tax concessions—can better provide the incentives for business to do research and foster industry-university partnerships.”

Driving growth

The submission included modelling from Deloitte Access Economics showing that in 2018, universities contributed A$41bn to the Australian economy. Deloitte’s report says that every dollar spent on university research has a A$5 return, and universities’ “greatest importance lies in the role that [they] play in driving growth in productivity and living standards—through the research they produce and the graduates they furnish the labour market with.”

Universities Australia predicts that up to 600,000 graduate-level jobs will be created in the next five years, causing a potential skills shortage.

Australia’s rate of government investment in R&D lags the OECD average of 2.48 per cent of the economy, at only 1.79 per cent, the submission said.

It also called for more university places, more support for retraining via microcredentials and several improvements to healthcare training.

Employment reform

Other submissions to the inquiry included a call from the National Tertiary Education Union for employment reform in higher education, and an Australian Academy of Technology and Engineering paper calling for greater investment in research translation and science and mathematics training.

Initial submissions to the inquiry have closed, with an interim report and further submissions due later this year.