Do Latham's Hints of Enlightened Policies Toward Research and Development Presage a Meaningful Commitment? (August 10, 2004)

    A short unsigned article in today's Melbourne Age asks, "Clever country or fool's paradise?" followed by "Australia ignores investment in research and development at its peril."

The 500 word piece then covers the small investment by Australia's private sector in research and development pointing out that only 37 of Australian companies invested more than $1 million in R&D in 2002-03.

The Age article concludes, "It hardly takes a rocket scientist to work out that strong economic growth depends upon the stimulus of education and innovation. For Australia, over the longer term it will mean the difference between becoming a mere consumer of modern technology or a producer of it. Even a relatively small increase in Australia's investment in R&D will have a direct influence upon economic growth. Alternatively, Australia can rely on resource exports and become progressively uncompetitive in the global marketplace."

As if in response, the leader of the Labor opposition, Mark Latham yesterday addressed the Australian Industry Group national forum.

[I] believe in listening to the business sector and maintaining good, constructive relationships... I can't announce [Labor's R&D policy] today but I think it will be welcomed not only by the public sector institutions but also the corporations looking for assistance as they get about the important tasks of upgrading their technological base, upgrading their know-how, and doing more in terms of private sector R&D... The case for increased government investment in education and research is absolutely compelling. Bur so to increased private-sector investment, especially when it lifts inventiveness and product innovation... [Labor] will be looking at cost-effective ways in which we can help the corporate sector invest more in R&D because that's an area where the national economy needs to do more.

When questioned as to whether Labor would reinstitute the 150% R&D tax deduction Mr Latham replied, "We've got that under consideration, that's always been on the table."

The opposition leader's speech to the AIG follows on the comment last month to the AMWU that "Currently we are just two-thirds of the OECD average [in R&D as a percentage of GDP]. We’ve got to lift up and Labor’s plan is to lift up to the OECD level by 2015. But, of course, more needs to be done to develop a knowledge-based and modern manufacturing industry."

But does Mark Latham really understand just how slippery a slope Australia is on as it continues to ignore the goals the OECD and EU nation's are setting for themselves with regard to fostering their knowledge economies? For example has he read the short communication of the of the Commission of the European Communities issued in the middle of June, Science and technology, the key to Europe's future - Guidelines for future European Union policy to support research? If his goal is to lift Australian support for R&D to the current OECD level of 2.33% by 2015 he and Australia will be swallowing the wash of a boat swiftly passing us by.

On the other hand Australia's governing Coalition appears to be following a policy of palliative care with regard to support for research and development either in the public or private sector.