Australian government R&D contribution hits all-time low

Figures indicate ‘crisis point’ for spending on science and innovation, learned academy warns

April 29, 2023
Parliament House, Canberra
Source: iStock

Canberra’s spending on research and development has slumped to its lowest ever share of gross domestic product, in the first year of a Labor Party administration that has committed to a dramatic spending boost.

Australian government investment in R&D fell to 0.49 per cent of GDP in 2022-23, according to a forecast published in newly released science, research and innovation budget tables.

It is the first time that the figure has sunk below 0.5 per cent since records began in 1978, and about one-third lower than spending levels during a mid-1990s peak.

Investment on this measure has declined fairly steadily over the past decade, apart from a 2020-21 blip when the then government gave universities an extra A$1 billion (£528 million) of research funding as a Covid relief measure.

The now governing party vowed to reverse this decline in a pre-election pledge to “work with business, industry, universities and research institutes to boost Australia’s investment in research and development. Labor believes Australia can be a global STEM superpower.”

The promise outlined an aspiration to lift overall spending “closer to 3 per cent of GDP achieved in other countries”. The current figure is about 1.8 per cent.

Canberra’s investment in R&D is dwarfed by the contributions from businesses and universities. And the Australian Academy of Science said the published figure excluded “new and off-budget expenditures” such as Labor’s National Reconstruction Fund and initiatives such as the former government’s Australian Economic Accelerator programme.

Nevertheless, the academy said science spending had reached crisis point. “We’re not competitive anymore,” said chief executive Anna-Maria Arabia. “Other countries, particularly after the pandemic, have all boosted their investment in R&D.

“Australia has been on a trajectory of decline for more than 10 years. In a world where STEM [science, technology, maths and engineering] skills and industries are growing, it’s the wrong direction to be going. I don’t think anyone is expecting some multibillion-dollar injection in the next budget cycle [but] there is an expectation that we meet the needs of the nation.”

Science minister Ed Husic said the tables showed that the government was investing A$12.1 billion in R&D in the 2022–23 financial year. “We are also investing A$1 billion in other science, technology, research and innovation-related programmes and activities.

“The government will continue looking for ways to expand Australian research and innovation opportunities, drive scientific breakthroughs and industry growth and create high-paying, sustainable jobs.”

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