Commission of Audit recommends cuts for industry, research and education

The Australian Government’s recently released reports from the National Commission of Audit contain some key recommendations that, if adopted, would see support for industry and innovation, science, research and education reduced.

The commission was established in October 2013 as an independent body to review and report on the Australian government.

The government has released the Phase One and Phase Two Reports of the National Commission of Audit - Towards Responsible Government, which make 86 recommendations with the aim of substantially reducing net debt over the next decade.

Its recommendations include improving the administration of grant programs and identifying grant programs that can be merged, abolished and transferred to the states. This includes the recommendation that the Innovation Investment Fund, The Asian Business Engagement Grants, Export Market Development Grants and Commercialisation Australia be abolished and all industry assistance programs under $5 million be merged.

“The audit’s recommended abolition of programs such as the Innovation Investment Fund (IIF) and Commercialisation Australia reveal an unsophisticated, skewed assessment that gives no thought to investing in innovation and new industries,” said Dr Anna Lavelle, CEO of AusBiotech.

“The recommendations are regressive for Australia at a time when we should be considering extensions to these programs, rather than cuts,” she added.

The reports states that the government should stop providing assistance to start-ups because “the intellectual property, and any profits arising from these new ideas remains with the business, and there are no clear public benefits arising”.

Dr Alan Taylor, executive chairman of medical diagnostics start-up Clarity Pharmaceuticals - which has been awarded three Commercialisation Australia grants - concurs about the potential abolishment of the industry assistance programs.

“It would be disastrous for the industry if the commercialisation grants were scrapped,” Dr Taylor said. “For a company like Clarity that has over 10 employees and contractors, we would not have existed without these three Commercialisation Australia grants. We are now looking at drugs to treat cancer and supplying our services to Australian companies and overseas companies and generating revenue in Australia.”

Other recommendations of relevance to the sector include:

• rationalisation of the 696 non-principal government bodies, notable is the recommendation that Austrade be reduced and merged into the Department of Foreign Affairs and Trade;
• reduction of advisory bodies in the industry portfolio, with 16 recommended for review, including Innovation Australia and its eight underlying committees and groups;
• abolishment of the Cooperative Research Centres program and rolling this into the ARC Linkage grants system;
• consolidation of Commonwealth health-related bodies (NHMRC, Australian National Preventative Health Agency and Cancer Australian) into a new National Health and Medical Research Institute;
• streamlining the current Australian Research Council and the National Health and Medical Research Council grant processes or “consolidating existing research programs aimed at fostering collaboration”;
• changing the current governance and funding arrangements for the Pharmaceutical Benefits Scheme, including that a new independent authority oversee listing medicines within a fixed seven-year budget and the streamlining of approvals for new medicines through the Therapeutic Goods Administration;
• allowing “more government oversight of the work of the CSIRO to ensure that resources are being directed at areas of greatest priority”;
• “significantly” reducing the size of the Commonwealth Department of Education;
• increasing the interest payable on the Higher Education Loans Program from the current rate, which is equal to the consumer price index and cutting the higher education loan repayment threshold from $51,309 a year to $32,354 per year.

The government has indicated it will not accept all the recommendations. Those recommendations that will be accepted will be incorporated into the federal budget on 13 May