News & Views item

[Note added March 9: Public Support for Science and Innovation Research Report To Government - 12 March. Release date - end March.]

Precisely one year after the issuing of the terms of reference by the Treasurer, Peter Costello, and the Minister for Education, Science and Training, Julie Bishop, for the Productivity Commission to perform a research study into the economic, social and environmental returns on public support for science and innovation in Australia, the commission is scheduled to deliver its final report.

While the draft was characterised by a considerable amount of fence sitting, apparently because the commission found it difficult to obtain hard data, one of the point made was, "While the proposed Research Quality Framework [RQF] has some benefits, it also has considerable costs. The Commission suggests that a final decision about its implementation should be delayed pending the exploration of some other options."

However, just twelve days after the draft report was released (it was delayed a month) Ms Bishop, aware of its contents, issued a media release on November 14, 2006 stating "The Australian Government will implement a Research Quality Framework (RQF) which will strengthen the assessment of research carried out in Australia"; never mind that in fact the so-called preferred model recommended by the RQFDAG is not so much a framework as a skeletal scaffold. According to page 16 of the recommendation, a great deal of work is still required (and much of it may well prove contentious).

And of course more recently Ms Bishop earmarked an addition $87 million for implementation of the RQF, although it is likely that if the procedure is forced to a conclusion many more millions will be spent, thereby making the commission's point for it.

An official of the Productivity Commission when asked what effect Ms Bishop's blindsiding of its draft recommendation regarding the RQF would have, just shrugged and said wryly it would require some revision.

Below the draft report's key findings are repeated to allow comparison with the final report should it be released on the weekend.

Key Points

Issued with the draft research report, Public Support for Science and Innovation on 2 November 2006. See also: media release, Science and Innovation Pay Dividends for Australia.

" Australia is well served by its public funding support - some $6 billion in 2002 03 - for science and innovation.

It is not possible, given a host of measurement and methodological issues, to provide accurate estimates of the contributions of such R&D to the economy, but indications are that they are significant.
There are also important social and environmental dividends for Australians.

There are no grounds for a radical overhaul in total public funding or in the allocation of that funding. However, incremental improvement is needed in some areas.

The adequacy of existing evaluation arrangements is mixed, with some notable shortcomings in business programs.

The net payoff from the R&D Tax Concession could be improved by orienting the program towards its 175 per cent incremental component. This offers the prospect of increasing the amount of new R&D encouraged per dollar of revenue allocated to the program. The design of the incremental component could also be improved to make it more attractive and efficient.

Strong public support of Rural R&D Corporations with a public good orientation is justified, but the level of government subsidies for some more narrow industry-focused arrangements may crowd out private activity and produce only weak external benefits outside the supported rural industry. However, no changes should be made while persistent drought conditions remain.

Although, collaboration can generate significant benefits, the CRC program is only suited to longer-term arrangements. The Commission has outlined some complementary options for business collaboration with public sector research agencies and universities that could provide more nimble, less management-intensive, arrangements than the present CRC program.

There is a wide range of perceived obstacles to commercialisation by universities, but only some of these warrant policy action.

There may be a case for providing universities with some additional funding to demonstrate promising technologies so they can be more easily transferred to businesses. However, there are several options for supporting such transfer that do not involve a new dedicated funding stream.

The structure of funding for higher education research has increasingly eroded the share of block grants. Further erosion would risk undermining their important role in enabling meaningful strategic choices at the institutional level.

" While the proposed Research Quality Framework has some benefits, it also has considerable costs. The Commission suggests that a final decision about its implementation should be delayed pending the exploration of some other options.

Background Information: Ralph Lattimore, Assistant Commissioner, (02) 6240 3242