Editorial-27 July 2004





The Treasurer, The Chancellor and Views to the Future


     The UK Labour Government's Chancellor of the Exchequer, Gordon Brown and the Australian Coalition Government's Federal Treasure, Peter Costello have one thing in common, both want to displace their respective leaders in order to become prime minister. It may be the only substantive characteristic they have in common.


On July 12 the Chancellor released the UK's Spending Review 2004 which contained the 190 page Science & innovation framework 2004 - 2014. While it is not strictly comparable to the Australian Government's Backing Australia's Ability II in scope and remains to be acted upon by the British parliament, it gives a strong indication of the different mind sets of the two governments. For example it is a matter of public record that Gordon Brown is a long time proactive champion of the importance of research and innovation in not only maintaining but improving Britons' standard of living and well being relative to its cohort nations. In his Science and Innovation framework he sets out the proposed target and path to move the UK's support for research and development from its current 1.9% of GDP to 2.5% of GDP by 2014. It is summarised in the table below.




According to the Chancellor, "To achieve this target requires substantial growth in business R&D in the UK. This in turn requires a similarly significant growth in the underpinning investment in the public science base, both to supply the skills and research results into the economy, and also to attract mobile business R&D investment into the UK. As this framework sets out, it will also require a continued strengthening of the linkages between the public and private sector research bases.

    "Funding basic research from the Science Budget must achieve a balance between directed (‘top-down’) and responsive (‘bottom-up’) research. The latter should continue to form the larger part, and through permissive management and funding of the science base ensure that the world-beating ideas of tomorrow can arise and flourish, generating some of the ‘disruptive technologies’ of the future for development in the UK. Providing ample scope for cutting-edge research ideas and new knowledge to emerge from the science base has provided huge benefit to business and society"


Contrariwise Mr Costello shows little interest in research and development from the viewpoint of supporting measures to substantially raise the private sector interest in increasing its support for R&D let alone renovating the nation's publicly owned scientific research infrastructure which continues to loose ground relative to nations occupying the top half of the OECD table.


There can be little doubt that Australian science and higher education policies are dictated by the perceptions of the Prime Minister and his Treasurer. Brendan Nelson as the Minister for Education, Science and Training, or the Chief Scientist, Robin Batterham, are bit players who are quite clear as to the roles they are to play and the advice required of them.


But before going further the tabular overview immediately below is taken from DEST's Australian Science and Technology at a Glance, 2003 which is referred to more extensively further on.


    GERD - Gross Expenditure on Research and Development

    BERD - Business Expenditure on Research and Development

    HERD - Higher Education Research and Development

    GOVERD - Government Intramural Expenditure on R&D



Australia's Group of Eight (principal) research universities (Go8) took the opportunity of the release of the Chancellor's science and innovation framework to note the disparity of proposed support for science and innovation by the UK government in comparison to the federal Coalition:

 In releasing the new spending program Chancellor Gordon Brown lamented the UK’s 1.9 % rate of gross expenditure on research and development (GERD) and aims to raise it to 2.5% by 2014.

    Australia is languishing at 1.55%.

    The average of all OECD countries is 1.81% GERD while the USA is 2.67%. Many nations have set up targets on science spending that look certain to relegate Australia to a second-tier research nation over the next few decades. The EU, for instance, outlined in its Lisbon Strategy that GERD should be raised to 3% by 2010 by member nations.

    The Group of Eight has consistently raised the parlous state of Australia’s R&D investment and urged the government to adopt targets and introduce policies to stimulate business investment that will ensure we remain competitive with the US and European economies.

    While Australian academics are highly regarded internationally, extra funding would enable them to further drive our institutions to the top of their academic fields. The higher the quality of our universities, the higher the impact they have on Australia’s economic and social prosperity and the greater the potential to develop new technologies and industry, providing a dramatic expansion of employment opportunities for Australians into the 21st century.


The Group of Eight also released a chart (click thumbnail above) comparing Australia's (red) to the OECD's gross expenditure on research and development (GERD) as a percentage of gross domestic product (GDP).



After a fortnight the Minister for Education, Science and Training, Brendan Nelson, released a rebuttal to the claims made by the Go8 which reads in its entirety:



July 26, 2004 MIN 818/04

    Contrary to recent suggestions by ‘The Group of Eight’ universities, Australia’s public research and development (R&D) expenditure is considerably higher than that of the United Kingdom and will remain so in the foreseeable future.
    In its media release (July 13) ‘The Group of Eight’ claimed that:
    “The Blair government has announced massive increases in science spending overnight in stark contrast to the water treading “Backing Australia’s Ability 2” budget announced earlier this year.”
    These are the facts.
    In the United Kingdom, expenditure on R&D by universities and government research agencies is 0.6% of GDP. In Australia, the figure is 0.8% of GDP – which is the Blair Government target for 2014!
    Over the last three years, the Australian Government through Backing Australia’s Ability has increased funding for science and research in Australia by more than $1 billion. Over the next seven years, it will further increase funding for science and research by more than $7 billion.
    Among the greatest beneficiaries are Australia’s universities. Australian Bureau of Statistics figures show that higher education expenditure on R&D rose by 22.9% between 2000, the previous survey year, and 2002, the first full year in which Backing Australia’s Ability funding was available.
    R&D funding for Australian universities has never been higher in Australia’s history.
    At a record $3.43 billion for the year, expenditure on R&D in Australia’s universities reached 0.45% of GDP. This compares very favourably with the OECD average of 0.41%.
    In Australia, the majority of this expenditure takes place in the research-intensive universities of ‘The Group of Eight’.

Nine months ago (October 2003) the Department of Education, Science and Training published together with a forward by the Minister for Science, Peter McGauran, a 99 page compendium Australian Science and Technology at a Glance, 2003. Below we reproduce eleven of the charts contained in what is the federal government's most recent publication on the subject. According to Mr McGauran, "This pocket-size reference is supplemented by a larger set of statistical information which is on my Department’s web-site at www.dest.gov.au/science/analysis/default.htm and will be regularly updated as new data becomes available."


John Howard became Prime Minister of Australia on March 11, 1996. Whether or not the federal government's overt complacency as exemplified by Dr Nelson's media release is well founded when Australia is compared with its OECD cohort and the targets being set by them we leave to the reader to assess.



Notes: The explanations below are taken directly from the DEST publication.

    Chain volume measure – in this publication, it is used to revalue expenditure on R&D in such a way as to remove the direct effects of changes in their prices over the period under review. It is calculated based on the implicit price deflators on R&D at a reference year of 2000–01 provided by ABS.

    The Private Non-Profit Sector – according to the Frascati Manual, it involved non-market, private non-profit institutions serving households (i.e. the general public) and private individuals or households.


As a reminder, the charts reproduced above are published by the Minister of Science, Peter McGauran, and overall provide, or should provide strong stimulus for a powerful reorientation of the government's support for research. If nothing else, Australia coming fourth last with regard to expenditure on innovation as a share of total sales in the manufacturing sector (chart 53) ought to have sent a traumatic message to those elected to provide for the welfare of the nation. It doesn't seem to have done so.



Alex Reisner

The Funneled Web