The pandemic has created for Australia, an existential crisis. The last time our country was in such a dire predicament was during World War II. Back then, with our sea lanes suddenly blocked by German and Japanese U-boats, our 1940s economy became highly vulnerable. There were massive shortages of vital supplies. Following the war, there was a switch in government policy to develop greater economic independence. To support the expansion of industry, Australia's research capabilities were turbocharged through the government establishing the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the ANU research university.
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Since these visionary developments in the late 1940s, governments have not given research a high priority. Official figures do not lie. According to federal budget papers, in the six years between 2014 and 2020, the government budget for research in Australia's universities rose by an average of just 0.4 per cent per annum - less than the inflation rate. Even when the science portfolio had a visionary leader, nothing changed. In the 1980s during the Hawke government, Barry Jones was the minister for science. He was a zealous supporter of higher research and development funding. Barry even wrote a book about it, 'Sleepers Wake,' but Barry could not wake up the cabinet, and spending on research was reduced on his watch.
Jones was looking ahead 20 years, while his colleagues were mainly focused on winning the next election. Research funding was not a priority for the voters. This is curious because investing in research is highly productive. Analysis by the Australian Bureau of Statistics in 2018, revealed that every $1 spent on research and development creates on average $4.50 of additional GDP. The return is much higher with cutting edge research, such as that conducted in the medical sciences, including at our own leading School of Medicine at the University of Newcastle, and the Medical Research Institute at John Hunter Hospital.
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Since the 1990s, the funding of our universities, and their research facilities have been transformed. Previously they were almost entirely dependent on the federal government budget, which included research. As such, they were subject to the priorities and constraints of government spending. The advent of increasing numbers of fee-paying domestic and overseas students over the last 30 years, gave our universities expanded capacity to fund their operations. However, the current pandemic has exposed significant flaws in this funding model. As additional dollars flooded in from private and overseas sources, the federal government significantly decreased their proportion of the financing of our 40 public universities. It is now at one of the lowest levels of the 37 OECD countries.
Federal governments, whatever their political colour, were happy to be relieved of some financial demands by universities on their national budgets. The current pandemic has exposed the danger of relying on non-government sources. With overseas students now blocked from entering Australia, university revenues have collapsed from the drying up of foreign student fees. Australian higher education is now floundering in a world of financial pain. The University of Newcastle Vice-Chancellor, Professor Alex Zelinsky AO told his staff last week, "the University had been using overseas student fees to balance the books," (Newcastle Herald, July 30). Now stringent budget measures lie ahead, and research jobs will disappear in Newcastle.
Other universities are even more exposed. Last year, in some institutions, international students came close to half of their total enrolments. This includes three-quarters of the leading research-intensive Group of Eight (GO8) universities; Sydney, UNSW, Melbourne, Monash, ANU and Queensland University. Many of these institutions include, or are associated with Medical Research Institutes, the jewels in the crown of cutting-edge Australian research. These MRIs are now bracing for a more than 30 per cent collapse in revenue. This is a tragedy at many levels.
Overall, the GO8 carry out 67 per cent of our university research. New modelling by them shows that their contracts for 4400 researchers in short-term and non-permanent positions are unlikely to be renewed. Letting these highly productive research staff go is like throwing away the "seed-corn" of our future economic growth. It is also a personal disaster for this highly skilled workforce. These young high achievers now face a bleak future. Such a brutal outcome of COVID-19, will not only hamstring leading-edge research in Australia but significantly weaken our country's future economic potential.
Currently, there are enormous demands on the Australian government to spend additional money on many critical priorities, to rebuild a post-pandemic economy. The federal government has been resting on its research funding oars for the past 40 years, and now is the time for it to start rowing hard. With the pandemic upon us, the federal government must provide university research with the resources needed, to help Australia navigate out of its current COVID-19 economic storm.