The Australian Government has released its response to Innovation and Science Australia's strategic plan for Australia to become a top tier innovation nation by 2030 (see our analysis From lagger to leader).
It says it strongly endorses the plan, and that some of ISA's recommendations detailed in Australia 2030: Prosperity through innovation were already addressed in the 2018-19 Budget.
The Government commits to around half of the 30 recommendations put forward by ISA to improve Australia's sluggish innovation performance.
Notably, this includes ISA's call for National Missions - large-scale complex undertakings designed to induce cultural change by demonstrating Australia's capacity to address 'audacious' challenges through innovation. The 2018-19 Budget has already allocated $500 million over 10 years to a Genomic Health Futures Mission, in line with ISA's recommendation.
The Government also agrees to secure long-term funding for national research infrastructure in accordance with the 2016 National Research Infrastructure Roadmap, and it points to the $1.9 billion over 12 years in additional funding allocated for national research infrastructure in the 2018-19 Budget.
The Government agrees with ISA to focus the upcoming digital economy strategy on artificial intelligence (AI) and machine learning, which ISA has highlighted as key areas of opportunity arising from a 'fourth wave' of the internet. Relating to this, the 2018-19 Budget allocated a total of $29.9 million to measures that aim to strengthen Australia's capabilities in these areas, including additional funding for AI projects backed by Cooperative Research Centres.
Also supported is ISA's recommendation to introduce an industry higher degree by research placement program at greater scale. The government has recently established a national, industry-based PhD research internship initiative (the National Research Internships Program, NRIP) that will place 1,400 new research internships into industry from 2017 to 2020. It has also committed to a $32 million Industry Research Exchange and Training program to secure opportunities for genuine collaboration between industry and academia.
Other recent initiatives that support ISA's plan include:
However, the Government merely notes ISA's core recommendation to prioritise a reversal of the current decline in business expenditure on R&D (BERD). ISA proposed to keep total government support for science, research and innovation at or above the medium-term average of 0.63% of GDP, but the Government says that mandating a minimum level of support based on historical figures would not be the most appropriate way to stimulate business investment in R&D. Instead it aims for "smart investments".
ISA's call to incentivise business collaboration through the R&D Tax Incentive by introducing a collaboration premium of up to 20% on non-refundable tax offset did also not find support. The Government says that the Tax Incentive is not the "appropriate mechanism to address the systemic cultural and structural impediments to collaborative R&D".
It is also notable that while the 2018–19 Budget includes amendments to the R&D Tax Incentive that are to better target investments, in line with the 2016 Review of the R&D Tax Incentive, the changes will actually reduce government support for business R&D, and as some commentators have pointed out, potentially will add to the current decline of BERD in Australia, rather than help turn the trend around.