Latest News

We must improve innovation: Senator

Australia will struggle in an increasingly competitive world if it does not improve its innovation performance.

Last week I released Venturous Australia, the report by Dr Terry Cutler and his colleagues on Australia’s innovation system. The headline finding of the report is that we need to spend around $2.2 billion more a year to get Commonwealth spending on science and innovation, as a share of GDP, back to where it was in 1993/94.

This is a fair measure of how far we’ve fallen behind. We have lost a lot of ground, however with a global economic slowdown to deal with, along with many other legitimate claims on the budget, we won’t be able to make up that ground overnight. This is the beginning of a long-term rebuilding process.

I’ve said all along that this review—and the government’s policy response—would set the agenda for a decade. The report recognises the centrality of engineering to innovation. It expresses concern about the shortage of engineering skills, and notes how declining levels of participation and proficiency in high school mathematics are contributing to that shortage. It also touches on the need to make government procurement procedures for engineering and other services less risk-averse and more innovation-friendly.

One of the report’s big recommendations for business is to replace the existing R&D tax concessions with a refundable 50 per cent tax credit for firms with a turnover up to $50 million, and a non-refundable 40 per cent tax credit for larger firms. The extra cost could be partly offset by tightening eligibility. The report also outlines a set of national innovation priorities. One of those priorities is climate change mitigation and adaptation. In fact, it goes further and recommends that we offer special incentives for innovative responses to climate change, its causes and its consequences.

The government is already making a start on this with initiatives like Climate Ready and Re-tooling for Climate Change, each worth $75 million over four years. Climate Ready offers firms creating climate change solutions dollar-for-dollar grants of between $50,000 and $5 million to support research, development, proof-of-concept and commercialisation activities.

Re-tooling for Climate Change offers manufacturers grants of between $10,000 and $500,000 to make their operations more water-wise and energy-efficient. These programs will accelerate Australia’s transition to a low-carbon economy by addressing market failures and complementing the government’s proposed Carbon Pollution Reduction Scheme.

They also complement the massive climate change research effort going on in our universities and public research agencies such as CSIRO. The Cutler report recommends that the government should meet the full cost of university research. At the moment, universities cross-subsidise their research activities from other sources, notably student fees. As a result, both teaching and research suffer. The government is conducting its own study of university research costs to determine how we can address this. T

he last idea in the Cutler report I want to touch on concerns access to knowledge and ideas. The report urges all Australian governments to adopt open publishing standards and creative commons licences. It says we should place scientific knowledge produced in Australia in machine searchable repositories. Most radically, it argues that to the maximum extent practicable, publicly-funded research should be made freely available over the internet as part of a global creative commons. These recommendations acknowledge that Australia is and will remain a net importer of knowledge.

It is in our interest to promote the freest possible flow of information domestically and globally. The Cutler report defines innovation as “creative problem solving or solution seeking”.

Climate change may be the most dramatic problem we have to solve, but there are many others. Innovation is critical to making the Australian economy more productive and competitive. It is critical to making Australian society fairer and more inclusive. It is critical to maintaining our living standards and fulfilling the aspirations of Australian families and communities.

The government is developing an innovation policy white paper in response to the Cutler report, which it intends to release before the end of the year.

Download Venturous Australia from

Learn more about Climate Ready and Re-tooling for Climate Change at

The views expressed in Viewpoint are not endorsed by PACE.

Send this to a friend