ADDRESS TO UNIVERSITIES AUSTRALIA

As you will know, Labor has announced a root-and-branch review of Australia’s research system.

The chair of the review, the former Chief Scientist Professor Ian Chubb, has already begun work on the task.

He is being assisted by an advisory group of eminent academic researchers and business leaders.

The researchers are drawn from all disciplines.

The most important question, of course, is why are we doing this?

Research is absolutely fundamental to the prosperity of this country.

It drives innovation, creating new value chains in the economy. That makes research the key to:

As the OECD has emphasised, the sustainability of economic prosperity and economic growth – of equality - will depend on knowledge-based economies having vibrant innovation systems.

Economic competitiveness is disproportionately derived from R&D-intensive and innovation-intensive sectors.

So the idea that we can build an economy on the lowest common denominator – by bottom of reducing wages and working conditions, by undermining living standards, is fundamentally an anathema.

Especially for those of us who take a social-democratic view of politics.

If we want to engage effectively with the issues of economic prosperity and genuine social equality then we have got to build the knowledge-based industries.
That is why we need a vibrant innovation system, of which the universities are at the heart

If Labor wins the election that will be held within two months, we will aim for 3 per cent of Australia’s GDP to be devoted to R&D by 2030.

By international standards 3 per cent is modest.

The northern Europeans are doing that already. In northern Asia it’s the rule of thumb. 

But by comparison with where we stand now, at 1.8 per cent, it’s a substantial and extraordinarily ambitious target.

In the past five years, Australia’s R&D performance has gone backwards
From 2.1 per cent of GDP to 1.8 per cent.

That is well below the OECD average of 2.4 per cent.

The good news is that the universities’ contribution to R&D spending has held up well, much better than the government and private sectors.

Business expenditure on R&D (BERD) has fallen by 12 per cent since 2013-14.

In 2015-16 BERD in Australia was barely 1 per cent, compared with an OECD average of 1.6 per cent.

Australians and their government have every right to know what return they can expect to receive for the $10 billion this country invests in research.

This will be the first comprehensive review of the research system to be undertaken in more than 20 years.

During that time, ad hoc changes have been made to policy, funding has been cut and political interference has hampered the practice of research.

In the course of two decades it has become harder to determine just what the big picture is.

We need to know the extent to which all the nation’s research assets – universities, public agencies, the private sector, and local communities – cohere.
And, conversely, the extent to which they fail to cohere.

When that picture is clear, we can chart a path to the three per cent target.

So you have obviously got your own policy settings as well aligned as they can be in a political context of relentless cost cutting.

Most recently, there has been the $328 million sliced out of the research block grants scheme in the 2018 mid-year economic update.

A cut that can only result in fewer research jobs, and fewer projects undertaken.

And of course, it is a further setback for your long-cherished goal of covering more of the indirect costs of research

This is not a cause I have forgotten.

As a result of the Watt review, of the abandonment of the SRE scheme, the present Government is asking you to bear those indirect costs.

It is not the only cross you have been asked to bear.

Universities have been under assault in ways that go beyond cost cutting.

As well as squeezing funds, the present Government has reopened the culture wars, with universities a prime target.

There have been confected crises, such as free speech supposedly being at risk on campus.

That crisis didn’t pan out the way the culture warriors might have wished.

The former Chief Justice, who was appointed to inquire into the matter, couldn’t find the evidence.

More seriously, there has been the politicisation of the ARC grants process.

You will all remember the revelations at Senate estimates last year.

The ARC’s CEO confirmed that the Education Minister had rejected 11 research projects the council had recommended for funding.

The Government’s desperate attempts to justify this ministerial intervention led to the National Interest Test that now constrains grant applicants.

I want to reassure you that a Labor government will end the culture wars.

We will not use the ARC as a means of prescribing, for partisan reasons, what research projects may be undertaken.

The same applies to other funding mechanisms.

Minister Tehan’s National Interest Test will be scrapped.

Labor’s vision for Australian science and research embraces research at every level:

The present Government has only really been interested in the last of these.

In research that turns a quick dollar.

They have never understood that if we do not invest in basic research, we will degrade our ability to do applied research effectively.

And ultimately there won’t be any applications to commercialise.

So I can promise you that a Labor government will never abandon basic research.

We need to strengthen Australia’s capabilities in basic research.

It is the creation of new knowledge, above all, that leads to greater international competitiveness, and greater opportunities within Australia.

I stress that when I use the word “science” in this context, I am using it in the broadest sense.

I use it to mean any organised, rational system of inquiry, including the humanities.

A Labor government will not have any phobias about particular academic disciplines recognised within universities.

We will not block research projects because they can be made easy targets for the scorn of uncomprehending commentators in the popular media.

Under Labor, the integrity of the ARC grants process will be restored.

We will legislate to ensure there is full transparency in the process.

We respect the Haldane principle that the merit of particular research projects should be assessed by researchers’ peers, not by politicians.

But, that said, we would not completely remove the minister’s discretion to veto a grant recommendation.

It is my view that such discretionary power should be exercised only rarely, in exceptional circumstances.

It certainly shouldn’t be used for opportunistic political reasons, as Senator Birmingham did when he was minister.

But we would retain the power, because ministers are ultimately answerable to Parliament for how public funds are disbursed.

In keeping with our commitment to a transparent grants process, under Labor the minister would be required to explain to Parliament any decision to refuse a grant.
The explanation would have to made promptly and in full.

We expect that the Chubb review will guide us in decisions that must be made about possible restructuring of funding mechanisms.

We need to know in detail how across the whole Commonwealth – not just the ARC and the NHMRC – our funding mechanism’s operate, and interact.

We need to know what difference the Medical Research Future Fund is making to the overall research framework.

And, we need to know what role universities can take in assisting business to undertake R&D.

And how we can get business to engage more with the university system, and our science agencies

Because I don’t take the view – as the government does – that our low rates of collaboration are your fault

That you have to be scolded like school children, and have wasteful and inefficient measures like the so called engagement and impact assessment forced upon you
Make no mistake: I am a big supporter of ERA.

I brought it in. I linked it to funding, and if given a choice I would do it again.

I do not hold to the view that quality, and excellence are irrelevant.

It is no good having a system that engages with business, with society, if the science is worthless

So I am going to have a good, long, hard look at the engagement and impact assessment.

I am not satisfied that the ARC has been allowed to, or has been given time to get this right.

If I was Minister I would never have allowed such a half-baked scheme to be implemented.

And if it doesn’t measure up, it won’t happen again.

Some of you have already engaged individually with Professor Chubb’s review.

I urge you all to do so

He expects to conclude the work of the review in six months.

As you know, the Government’s planned overhaul of the R&D tax incentive has disappeared into a political black hole.

The intensity test set out in the legislation provoked widespread opposition in business circles.

I am no fan of the intensity test either.

But I do support, at least in principle, a proposal in the original three “Fs” review for a premium rate of the tax incentive to be available for collaboration between industry and researchers in universities and government agencies.

That is something we would consider if we are in government.

I am also aware that adequate funding of research infrastructure is an unresolved problem of crucial importance.

Announcements on particular measures are still to be made.

But I am determined to resurrect the Educational Investment Fund.

I believe that we need a proper process for engaging with you on the implementation of the Clark review and the Finkel 2016 Roadmap.

And, we need a proper scheme for governance of the National Collaborative Research Infrastructure Scheme.

All of these are problems that must be confronted.

Problems that have been allowed to fester under the present Government.

I look forward to opportunities to discuss them with you as the election draws near.

And if there is a Shorten Labor Government after the election, I look forward to working constructively with you to resolve them.
Thank you.