Government and business ‘letting Australia down’ on research

Australia’s representative body for top-ranked universities has taken a swipe at both the government and business for shirking their research funding responsibilities.

The Group of Eight (Go8) says Canberra’s share of research and development spending has been declining since the mid-1990s, while business expenditure on R&D fell 10 percentage points between 2008 and 2020.

In a prepared opening statement to the Productivity Inquiry, which is holding a public hearing on 8 November, Go8 chief executive Vicki Thomson lambastes Australia’s “lopsided commitment” to research funding.

“Business has been and continues to walk away from funding research and it is universities which are picking up the slack,” the statement says. “It should also be noted that government is commissioning national research from universities while only paying for less than half the costs.

“This requires universities, primarily the Go8, to support the national research effort using their contingent funding – mainly international student fee revenue.”

The inquiry is conducted by the Productivity Commission every five years. Education and research are likely to be high on the agenda after the commission’s chairman, Michael Brennan, questioned the longstanding assumption that higher education levels equate with advances in productivity.

“Despite having the arguably best educated workforce in Australian history, our rates of productivity growth are the lowest in over 50 years,” Mr Brennan told the Universities Australia conference in July. “Rather than thinking about the contribution of extra education to economy-wide productivity, we have to think harder about productivity within the education sector itself.”

But Ms Thomson will tell the commission it must also think about productivity outside the sector. “To gain any productivity momentum…we must change what has occurred in other areas of the economy over past decades,” her statement says.

She will argue that spending on higher education research and development is “beneficial” from a broad productivity perspective, saying a forthcoming report from consultants London Economics found that every A$1 billion (£567 million) invested in Go8 university research generated an additional A$9.2 billion of economic activity elsewhere – similar to the result of a similar analysis in 2018.

“Covid-19 has shown…how important industries can be disrupted due to external factors not of Australia’s making,” Ms Thomson’s statement says. “Given the criticality of an active and high-quality R&D sector to Australian prosperity, are we comfortable allowing this to be reliant on external forces that lie beyond Australia’s control?”

The Go8’s 118-page submission to the inquiry says Australia should adopt a full economic costing model for research funding, to reduce reliance on cross-subsidies from student fees.

Other recommendations include developing a national research strategy to drive the government’s commitment to raise R&D spending towards 3 per cent of gross domestic product, and introducing a single tuition fee for most degrees with variable government subsidies to allow for different teaching costs.

Meanwhile, the representative body for private higher education colleges has called for non-university providers to be granted eligibility for government teaching grants, while conceding that some of its biggest members would probably decline them.

Independent Higher Education Australia chief executive Peter Hendy said some large providers would opt to “stay purely private” rather than sacrifice autonomy over their fees by accepting government subsidies. “They believe they have a niche market where they are very, very competitive, and that’s how they compete,” Dr Hendy told the inquiry.

john.ross@timeshighereducation.com