Budget boos and coos

The science and research sector has welcomed several new initiatives announced in yesterday's federal budget but concerns have been raised about cuts to some programs and a lack of emphasis on science overall.

Few surprises were revealed in what the Minister for Innovation, Industry, Science and Research Senator Kim Carr called a fiscally responsible budget, the biggest disappointment being the cutting of the Commercial Ready program, which will save $547 million over four years.

Research Australia CEO Rebecca James said the future of commercialisation of health and medical research had been dealt a blow by the cut.

"The termination of Commercial Ready leaves a big funding gap in the development of new medical technology," James said.

"Commercialisation is an important step in turning new knowledge into improved health and wellbeing. In the medical technology field, it is also an expensive process."

AusBiotech CEO Dr Anna Lavelle said she was disappointed by the move but hoped new initiatives for the industry would be announced later this year, when the Government's innovation white paper is expected to be released.

Senator Carr said while the closure of Commercial Ready was a hard decision, the Government had ongoing concerns that the program was not effectively addressing areas of market failure.

"The closure of Commercial Ready was a hard decision ... but this decision will allow the Labor Government to get on with the job of implementing a new streamlined set of programs following the review of the National Innovation System," Carr told ALS.

He said last year's Productivity Commission report on Public Support for Science and Innovation found "robust evidence that Commercial Ready supports too many projects that would have proceeded without funding assistance".

"If the Government had kept the program running for 2008-09, it would have incurred significant commitments into future years, limiting the Government's capacity to respond to the review of the National Innovation System with fresh ideas and more effective programs," he said.

"It is important to note that all existing commitments under the program will be met - worth about $200 million over four years."

Carr said the Government would continue to support innovative businesses through the R&D tax concession, the tax offset, the COMET program, and a range of venture capital measures, in addition to new initiatives such as Enterprise Connect, Clean Business Australia and the Green Car Innovation Fund.

Science agencies CSIRO and ANSTO are subject to the Government's "efficiency dividend" of two per cent this year, meaning savings of $39.8 million from CSIRO and $7.2 million from ANSTO over four years.

Carr said both agencies will be reviewing their spending and "will seek to manage the application of the one-off dividend through natural attrition in staffing and reducing spending on discretionary items".

The National Health and Medical Research Council will see an increase of $123 million in funding from last year's budget, to a total of $617 million. It too received the dreaded "efficiency dividend", which has increased from 1.25 per cent to 3.25 per cent.

NHMRC CEO Warwick Anderson said these savings will be achieved in non-staff areas.

New initiatives include the promised creation of a Future Fellowships scheme for mid-career researchers, with $326 million promised over four years.

The scheme will offer 1000 local and international researchers four-year fellowships of up to $140,000 a year. Host universities will received up to $50,000 to help pay for infrastructure and equipment for research projects.

The first round of fellowships is scheduled to commence next year.

The postgraduate scholarships scheme has also been funded, promising an increase in the number of Australian Postgraduate Awards holders from around 4800 to nearly 10,000 by 2012.

Climate change initiatives were the biggest winners in the science portfolio, with $500 million promised over five years for a Green Car Innovation Fund to develop more fuel-efficient cars and $240 million over four years for Clean Business Australia initiatives.

This will include $75 million for the Climate Ready competitive grants program, which is aimed at encouraging the development and commercialisation of products, processes and services that save energy and water, reduce pollution and use waste products in innovative ways.

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The biggest news for the sector is the $11 billion Education Investment Fund, one of three massive new funds generated from the budget surplus. The EIF is aimed at capital expenditure, renewal and refurbishment in universities, research facilities and major research institutions.

The Minister for Education, Deputy Prime Minister Julia Gillard, said the EIF will have a board to advise her and Senator Carr on the relative merits of funding applications. No money will be available in the 2008-2009 financial year to allow for the results of the Higher Education Review.

Professor Kurt Lambeck, president of the Australian Academy of Science, said the EIF, which has incorporated the previous government's Higher Education Fund, will now include the vocational sector, "so it remains to be seen whether universities will be better off".

"What has changed is that there is a greater commitment to increasing the size of the funds in the future and to allow expenditure of part of the capital if seen to be appropriate," Lambeck said.

"The Academy welcomes many of the new spending announcements from last night's budget, but has some concerns as well, particularly in relation to stretched funding time lines and cuts to Australian research institutions.

"It makes sense to defer new funding until the myriad of review committees announced by government these past six months have reported back. But it makes no sense if in the meantime our R&D capabilities have been strangled."

In health, another of the big new funds is the $10 billion Health and Hospital Fund, also aimed at infrastructure and capital works. Investments would be made in health and hospital facilities; medical technology and equipment; and major medical research facilities and equipment, including projects to support better links between clinical research and clinical practice.

Cancer has been targeted, with a new bowel cancer screening test being offered for free to people turning 50 between 2008 and 2010; $15 million over three years for independent clinical trials of drugs and research into cancer treatment and care; $50 million for the new Comprehensive Cancer Centre at the Royal Prince Alfred Hospital in Sydney; $15 million to set up two dedicated prostate cancer research centres; $15 million to build a children's cancer centre at the Women's and Children's Hospital in Adelaide; $15 million for another cancer centre at the Austin Hospital in Melbourne; and $5.1 million for the National Centre for Gynaecological Cancers.

Other savings include $147 million over five years by combining the functions of Invest Australia into Austrade to form one organisation taking care of inward and outward investment.