Response—Industry Commission report on research and development

On 17 July 1995, the Australian Academy of Science made the following response to the Industry Commission report on research and development.

The Academy welcomes the conclusion of the final report of the Industry Commission on Research and Development that R&D is a major source of innovation and an important contribution to economic growth.

The Academy's responses to the recommendations of the report are as follows.


  • The Academy agrees that CSIRO should focus on public good research, which we equate by and large to strategic research which is applications-oriented but with emphasis on the longer term.
  • CSIRO should not be obliged to fully recover costs for all private-good research. There may be circumstances where some subsidy is needed, particularly for start-up companies, or where public-good research programs benefit from the results of industry-funded projects.
  • The Academy supports the establishment of a consultative forum to assist the setting of broad priorities, but on a triennial basis.
  • From past experience in CSIRO, the establishment of formal advisory committees appointed by the Board is not favoured. The recommendation resembles that of the Independent Inquiry into CSIRO (Birch Report). The formal advisory committee was abolished by Government on the recommendation of the ASTEC Review into CSIRO.
  • CSIRO's costing and pricing guidelines should be transparent, but be the responsibility of the CSIRO Board.
  • The Academy strongly disagrees with the recommendation that an independent agency be designated to monitor and publicly report on CSIRO's performance against priorities and performance indicators. CSIRO's performance is the responsibility of the CSIRO Board and the Academy believes that it would be difficult to persuade outstanding leaders from the private sector to serve on the Board if this Industry Commission recommendation is accepted by Government.

University and related research

  • The Academy supports the continuation of block funding to universities, through the operating grants for research undertaken to support teaching and research training, but the amount of block funding to a university should be related to the quality of research.
  • The Academy strongly supports a plurality of funding arrangements for research in universities. Any periodic reviews of research in particular disciplines should not be more frequent than every seventh year. The ARC should seek the views of the Academy and the appropriate scientific society on membership of review panels.
  • The Academy strongly supports the recommendation that post-graduate scholarships remain non-taxable, and that students be no worse off in the event that the ATO proceeds to tax scholarships.
  • We do not agree that universities should necessarily be obliged to charge the full direct cost of research, although this will be appropriate in most instances.

Australian Research Council

  • The Academy strongly supports the recommendation that the ARC be given statutory independence.
  • The Academy disagrees that the Research Quantum should be transferred to the ARC budget. We acknowledge that the ARC is well placed to provide advice on the factors to be taken into account is assessing the Research Quantum, but the ARC should not be responsible for the allocation of the Quantum.
  • The Academy supports the recommendation that the choice about allocation of funding among disciplines be made by the ARC.
  • The Academy strongly supports the recommendation that excellence by international standards be the sole criterion for funding within ARC programs primarily concerned with supporting basic research.


  • The Academy strongly supports the recommendation that competitive funding for medical research should continue to be allocated through the NHMRC.
  • The Academy considers that the funding of the John Curtin School of Medical Research should be transferred back to the Department of Employment, Education and Training, the source of appropriation funding for all the schools and centres in the Institute of Advanced Studies except JCSMR.

Business R&D

  • The Academy supports the retention of the 150% tax concession for R&D.
  • The Academy supports the continuation of the Grants for Industrial Research and Development, but it is not opposed to a generally available non-taxable grant for tax loss companies.
  • The Academy strongly believes that syndication arrangements should not exclude private and public tax-exempt research bodies. The Academy's accompanying submission to the Innovation Statement indicates how syndication arrangements might be modified to include private and public tax-exempt bodies.

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