2021/22 Federal Budget Breakdown

General University Funding

The $1 billion boost in 2020-21 to university research funding to help offset the financial toll of the loss of international students was not repeated this year. This accounts for most of the reduction in spending highlighted by some commentators. The rest is falling Commonwealth Grant Scheme funding which was an anticipated side-effect of the Job-Ready Graduates legislation.
A comparison of the 2020-21 budget figures with the 2021-22 announcement (once you remove the $1 billion injection) shows little change to the 2020-21 budget outlays for universities overall. Table 1 shows a comparison of the two budgets for funding through:

• the Commonwealth Grant Scheme (CGS)
• Research Block Grants (RBG)
• the National Priorities and Industry Linkages Fund (NPILF)
• the Indigenous, Regional and Low SES Attainment Fund (IRLSAF)
• National Institutes grants

This table confirms university funding overall rises slightly in nominal terms in the 2021-22 budget but falls slightly in real terms, and funding decreases year on year in the forward estimates starting from the 2022-23 Budget (Table 2). The funding levels in the budget do not provide any additional assistance this financial year or next to offset the revenue lost from international students.

Table 1 Higher education funding from the 2020 and 2021 budget papers.

Table 2 Difference between 2020 budget papers and 2021 indicating a $48 million increase for universities in 2021-22 budget

Industry PhD Programs

Changes to the Research Block Grants have been announced with the Government proposing incentives for universities to enrol students in ‘industry PhDs’. These PhDs would require students to have undertaken an industry placement in the first 18 months of their PhD. Universities would receive $30,000 per student in their Research Training Program (RTP) pool once that student has graduated. Funding for this program is not additional. Funds would be redirected from the Research Support Program (RSP). Both the RSP and RTP are increasing year-on-year even with these changes (TABLE 3).

Table 3 Research Block Grant Funding 2021-22 Education Portfolio Budget Statement

Patent Box

The Federal Government has announced the development of a Patent Box scheme in Australia. This is a tax measure where company income made from products manufactured locally from patents lodged in Australia would be taxed at 17% (instead of the current company tax rate of 25-30%). Patents must be Australian owned and generated – which the Government says will encourage business investment in research & development activity in Australia. According to the Treasurer’s National Press Club address, the patent box will only be available for new patents, however industry will be consulted before settling on the final design. This measure would apply to the biotech and medtech sectors. The Government says it will consult about extending it to the clean energy sector in future.

As a tax measure, this would be a demand driven program, however the Government anticipates the measure will be worth $206.4 million over the first two years in foregone tax revenue. This tax concession is proposed to start from income years starting after July 1st 2022.

Women in STEM Program

$42.4 million is being proposed for co-funded scholarships for women in STEM in partnership with industry. This program complements the Women in STEM Cadetships announced last year for apprenticeships. It would support more than 230 women to seek STEM qualifications from undergraduate to PhD level.

Women in STEM Evaluation Toolkit

$0.6 million over three years will be provided to the Office of Women in STEM Ambassador, Professor Lisa Harvey-Smith, for an evaluation toolkit. This toolkit would be used to standardise evaluation and reporting of STEM gender equity initiatives. This work has already begun, and this funding will continue it.

ARC, NHMRC and MRFF

ARC
The Australian Research Council grants show no change except a CPI (inflation) increase. There is an increase in the 2022-23 budget for the Excellence in Research for Australia (ERA), which aligns with the ERA evaluation in 2023 and the Engagement and Impact measures in 2024.

NHMRC
An extra $10.4 million over the next four years will be spent on medical research. The NHMRC will receive $2.4 million of this funding.

$4.4 million of this funding will go to the introduction of mitochondrial donation (which is currently restricted). This IVF-based assisted reproductive technology gives the potential for parents to avoid transmitting mitochondrial DNA disease to their biological children. It will be staged with the initial treatments being research based and at a carefully selected clinic.

Apart from the special measures announced above, there are no other changes to the NHMRC budget except a CPI increase for grants.

MRFF
The Medical Research Future Fund has reached its $20 billion capital goal. It should now release a steady stream of funding to the sector of $650 million each year starting in 2022-23. In 2021-22, we expect to see a total of $455 million released to the Health portfolio for MRFF projects.

The economic downturn has hit the MRFF’s investments, but the Government has stepped in to cover the shortfall with a one-off $172.5 million investment to the fund.

National Collaborative Research Infrastructure Scheme funding

There are increases in the NCRIS budget which align with the figures presented in the 2020-21 budget. There is a $100 million increase in 2024-25 (Table 4). It is most likely that this increase is due to mid-cycle upgrades to facilities like NCI, PAWSEY and ANSTO. Work on the Research Infrastructure Roadmap is underway this year which will give the sector an opportunity to provide input on research infrastructure.

Table 4 NCRIS funding 2021-22 Education Portfolio Budget Statement

Digital transformation

Prior to the Budget, the Government announced $1.2 billion for a Digital Economy Strategy. More than half of this funding is earmarked to improve service delivery of the MyGov and MyGovHealth websites. Further elements of the strategy can be found here including the following highlights.

• $53.8 million over four years for enhancing Australia’s artificial intelligence (AI) capability for a National AI Centre (based at the CSIRO). And four AI and Digital Capability Centres.
• $24.7 million over six years to establish a Next Generation AI Graduates Program to attract and train AI specialists through national scholarships.
• $22.6 million over six years from 2021-22 to establish the Next Generation Emerging Technologies Graduates Program to provide up to 234 scholarships in emerging technologies areas.
• $10.7 million over three years from 2021-22 to trial up to four industry-led Digital Skills Cadetship pilots to develop new and innovative pathways to boost the number of Australians with high level digital skills.
• $18.8 million over four years from 2021-22 for a Digital Games Tax Offset to provide a 30 per cent refundable tax offset for qualifying Australian digital games spending.

Global Science and Technology Diplomacy Fund

The Government is proposing to allocate $54.2 million over four years (and $8.2 million ongoing) into a single fund to support strategically important international science and technology collaborations. This is not new funding and will be achieved be rolling the following into a single program:

• Australia-China Science and Research Fund;
• Australia-India Science and Research Fund; and
• Global Innovation Strategy.

This proposal would save the government $6.6 million over the first 5-years and $0.5million ongoing.

Australian mRNA Vaccine Manufacturing

An unspecified level of funding will go to the Departments of Industry and Health to develop end-to-end Australian mRNA vaccine manufacturing. This could be used to produce vaccines like the Pfizer-BioNTech COVID-19 vaccine, or other yet-to-be-developed products.

The Victorian State Government has started exploring this option and companies including CSL have already shown interest in mRNA manufacturing capabilities.

The funding committed is marked ‘NFP’ (not for publication) in the Budget papers as negotiations with key businesses are commercial in confidence.

Energy

$1.2 billion over ten years from 2021-22 (including $643.4 million over four years from 2021-22) to create a technology co-investment facility that supports the development of:

• Regional hydrogen hubs
• Carbon capture, use and storage
• Very low cost soil carbon measurement
• Agricultural feed technologies
• A carbon offset scheme in the Indo-pacific region
• The implementation of the Technology Investment Roadmap and Low Emissions Technology Statements.

Environment

$29.3 million has been proposed over four years for policy reforms based on the Government’s initial response to the Independent Review of the Environment Protection and Biodiversity Conservation Act 1999. This includes:

• $17.1 million over two years to maintain environmental assessments and approvals while transitioning to single touch approvals.
• $9 million over four years to establish an independent Environment Assurance Commissioner which will monitor and audit federal, state and territory approval systems.
• $2.7 million over three years for a pilot plan to accelerate development in a priority regional area.
• $0.5 million over two years for improved Indigenous heritage protection and involvement in the Environment Protection and Biodiversity Conservation Act 1999 decision-making processes.

Soil Science

The National Soil Strategy is due to be released this month. To support this, the Government will allocate:

• $102.0 million over two years to incentivise farmers to boost soil testing and to enhance the National Soil Resources Information System.
• $20.9 million over the next four years for a “National Soil Science Challenge” to advance understanding of Australian soils.
• $1.1 million over the next two years to develop and deploy an accreditation standard for soil expertise.

Commonwealth Scientific and Industrial Research Organisation

There have been no substantial changes to the CSIRO. Resourcing has increased (based on increasing sales of goods and services as well as asset sales. According to the budget papers and media reports the CSIRO will be taking on a further ~400 staff. Based on the Department’s Portfolio Budget Statement, these staffing positions are coming from other areas in the Department.

The CSIRO will also host the National Artificial Intelligence Centre (outlined in the digital economy strategy).

ANSTO

The Government has announced $116.7 million over four years and 14.2 million ongoing to support ANSTO.

• $59.8 million over four years to support waste storage capacity.
• $56.9 million over four years and $14.2 million per year ongoing for additional maintenance and renewal of infrastructure and equipment.

Square Kilometer Array

Ahead of the Budget, the Prime Minister and Industry, Science and Technology Minister Christian Porter announced $387.2 million over ten years for the SKA (with ongoing funding of $29 million). Funding includes:

• Australia’s share of the SKA Low Telescope, the world’s largest radio telescope, to be based in Western Australia’s Murchison region
• establishing and operating an Australian SKA Regional Centre in Perth to support computing and data management capability to manage SKA Observatory data
• the purchase of land to accommodate part of the SKA Low Telescope and to maintain its full scientific capability
• the provision of high-quality communication services to the area surrounding what will be the Australian SKA site.

Australian Space Agency

An additional $13.3 million over the next four years will go to the Australian Space Agency to boost the regulatory and technical advisory capacity. This will support the agency to assess and approve applications for launches and returns in Australia and support the growth of the Australian space industry.

Geoscience Australia

Geoscience Australia is receiving $40.2 million over the forward estimates as part of the Digital Economy Strategy. This funding will be to create a secure, dynamic and 3-D Digital Atlas of Australia’s geography. This project would build on pre-existing data and will include partnerships with the Australian Bureau of Statistics and the Digital Transformation Agency. To support this project into the future $6.3 million/year in ongoing funding is being provided.

Geoscience Australia will also receive approximately $200m as part of the Building Australia’s Resilience program (see the Bureau of Meteorology section for more information).

Bureau of Meteorology

The Bureau of Meteorology is receiving funding as part of the Building Australia’s Resilience program. This is part of the $209.7 million investment in the development of the Australian Climate Service. This service will aim to anticipate and prepare for more extreme weather events resulting from climate change. To maintain this service the Commonwealth government has committed to $37.3 million per year ongoing.

The Bureau of Meteorology will also receive a further $26.7 million to continue their support of the recovering aviation industry with meteorological services where costs are not being recovered through a levy on domestic and international airlines.

While not STEM specific, the proposed changes to childcare would have positive benefits for the STEM workforce so is included in this summary of measures. $1.7 billion over five-years ($671.2 million per year ongoing) is allocated to expand the Child Care Subsidy. This measure would come into effect on 11^th July 2022 and boost the subsidy by 30% for the second child and each subsequent child under the age of 5 in care.

The annual cap of $10,560 per child per year will also be removed on the 1^st of July 2022. The subsidy will instead be capped at a childcare subsidy rate of 95% for the children in care.