Keeping investment in research and development will be vital to reboot Australia’s economic growth and solution-generating research.
In its submission to the Senate inquiry into the Research & Development Tax Incentive (RDTI), Science & Technology Australia (STA) called for any changes to the Research and Development Tax Incentive to be put straight back into the nation’s research effort.
STA Chief Executive Officer Misha Schubert said any savings from proposed changes to the business tax break should go into direct research and development funds – a move vital to Australia’s post-COVID-19 recovery.
One way to do this would be to establish a new Research Translation Fund to boost Australia’s capacity to innovate and create growth, across the breadth of research fields.
“If the Government opts to press ahead with its proposed changes to the RDTI, we would urge it to put any savings straight into our national research effort to help with economic recovery,” she said.
“That would be a very clever move by Government to help turbo-charge our nation’s economic recovery and get more Australians back into jobs as swiftly as possible.”
“We cannot afford to lose that overall investment in our national scientific and technology workforce which is truly part of our national defence.”
A direct investment strategy via a new translation fund would also align with reports today suggesting the Australian Government is considering a radical strategy to put the economy into hibernation and then turbo-charge it out the other side.
“The ongoing challenges of 2020 – from bushfires, air quality, drought and flood through to the current COVID -19 crisis – have shown why we must never cut funds to science and technology.”
“To outwit new challenges we face as a country, it is scientific research that delivers solutions.”
“For the health, wellbeing and livelihoods of all Australians, we cannot afford to lose critical investment into research and development.”
“Indeed our current capacity to respond in the fight with COVID-19 is due to long-term investment over decades in science and research.”
“Experience around the globe shows public investment in innovation reaps large returns for the economy, creates jobs, strengthens communities and lifts livings standards.”
“Our public R&D expenditure is already below the OECD average. We cannot sustain more cuts if we are to boost labour productivity, compete on a global scale, and deliver real benefit for all Australians,” Ms Schubert said.
Australia’s gross R&D expenditure fell to 1.79% of GDP in 2017-18, down from 1.88% in 2015-16, the lowest level since 2005-06. This compares with an OECD average of 2.37% for developed nations – and a 3 to 4% rate from innovation powerhouses such as Sweden, Germany and Israel.
Over the same two-year period, Australian business investment in R&D fell below 1 per cent while the OECD average was 1.49%. This is lower than at any time since 2002-03.
In its submission, STA also called for a 20 per cent collaboration premium for R&D projects that collaborate with Australian research institutes, universities or government agencies.
“When businesses tap into the expertise of universities, there are benefits to both their bottom line and to our national economy,” Ms Schubert said.
“On average, businesses that collaborate with universities see a return on investment of almost $4.50 for every dollar they invest.”
“A collaboration premium would also encourage businesses to invest in R&D here in Australia.
“Australian Bureau of Statistics figures suggest the amount of R&D money that Australia’s business sector spent overseas actually rose by half a billion dollars – $534 million – in 2017-18.”
“It would be clever for Australia to lure that money back home through a collaboration premium.”