sia 2012 budget update

7/31/2019 SIA 2012 Budget Update

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2012/13 Federal Budget & Economic Outlook Duncan Jones

Executive Director

Science Industry Australia

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Presentation Contents

Economic Overview

2012 Federal Budget

Summary by portfolio

Australian Market Statistics

Summary

Q & A........

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The only function of economicforecasting is to makeastrology look respectable

John Kenneth Galbraith (1908 - 2006)

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- 2

-1

0

1

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P e r c e n

t a g e

W o rld GDP Gro w t h

% change in calendar years

1

9 8 0

1 9 8 5

1 9 9 0

1 9 9 5

2 0 0 0

2 0 0 5

2 0 1 0

2 0 1 5

Is the GFC really behind us...??

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...or are we in a double dip recession

share markets are the rstto react

rate of decline >>>> rateof recovery

the real economy is often18 mos. behind

Australia had almost thehighest household debt todisposable income ratiosin the world

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...or are we in a double dip recession

Perspective: AustraliasFederal govt. debt* willpeak at 22% GDP c/f China @ 26%

PIIGS av. = 115%

US = 103%

UK = 82%

Japan = 230%

Canada = 85%

Singapore = 101%

WORLD av. = 79%

*Source: IMF, CIA & Eurostat

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Youre either in mining or in recession

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There are some ow on effects from the miningboom........

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and some areas of manufacturing are still growing...

Common features:

industries are linked to Australias resourcessector, or are

higher up the valuechain and

more reliant on humancapital

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2012-13 Federal BudgetHeadline numbers:

Higher Education, science andresearch funding substantiallypreserved. Indexation of universityfunding preserved.

Total (projected) spend on science& research - almost $9.0B ($9.4B)

No New money for science & technologyCSIRO trimmed $25m over 4 years

CSIRO expects to lose 116 jobsover the next year

ignores the commercial end of theresearch spectrum by terminating

an innovation investment fund tostimulate venture capital.-4.5% (4.4%) YoY decrease over

2011-12

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How does this stack up....??

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How does this stack up....?? The 09 Federal budget lifted total sciencespending (GOVERD) from a low of 0.57% to

0.73% of GDP

The 12 Federal budget keeps spending at thisnew level....0.69%

When added to State government expenditureGOVERD for 12/13 is 0.75%

Australias Gross Expenditure on R&D (GERD) isestimated as being 2.39% for 2012/13

The top eight spenders in terms of percentageof GDP were

Israel (4.53%), Sweden (3.73%),

Finland (3.45%) Japan (3.39%),South Korea (3.23%), Switzerland (2.9%),

Iceland (2.78%) and United States (2.62%)

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And is looking to spend $376.3B.......

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Federal government Agencies of interest to thescience industry

Department of Innovation, Industry, Science,Research & Tertiary Education (DIISRTE)* Controlsbudgets for

CSIRO AIMS & ANSTO Australian Research Council (ARC)Cooperative Research Centres (CRCs)National Measurement Institute (NMI)Research Infrastructure Block GrantsUniversity block grants (all non-research monies)

* now three ministers running this dept: Greg Combet, Chris Evans andBrendan OConnor c/f one minister (Kim Carr) previously

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Federal government Agencies of interest to thescience industry

Department of Health & Ageing (DoHA)National Health & Medical Research Council

(NHMRC)Medical & Clinical Research Institutes

Therapeutic Goods Administration laboratories(TGA)

Department of Defence (DoD)Defence, Science & Technology Organisation

(DSTO)

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NHMRCNo changes in the forward estimates

In 2012-123 NHMRCs grants budget is$760.5m ($746m - 1.94% growth - less thanCPI)

2012 funding round opened Dec. 11

Expect >5,000 grant applications

(2011-4,933)

Make same total number of awards as 2011 -1,299

25.5% success rate (increase from 23%)

Announced October, 2012

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Fact Book 2011-outnow

GRANT ADMINISTERING INSTITUTION 2010

University of Melbourne $95.5m

University of Sydney $87.0m

Monash University $66.7m

University of Queensland $61.6m

University of New South Wales $54.1m

University of Adelaide $43.2m

Walter and Eliza Hall Institute $34.9m

University of Western Australia $33.6m

Queensland Institute of Medical Research $26.9m

Baker IDI Heart and Diabetes Institute $18.4m

Murdoch Childrens Research Institute $17.6m

Garvan Institute of Medical Research $15.1m

Australian National University $14.5m

University of Newcastle $14.3m

Menzies School of Health Research $10.4m

Group of EightUnis. dominate

NHMRC researchfundingoutcomes:2011 62.5%

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2012-13 budget is $915.3 ($844.7 - 11.25%)

No change to the forward estimates

The two main grant types of interest to SIA members are: Discovery & Linkage

Discovery grant applications open in Jan, closeMarch and are announced in October

2011: 3,544 applied, 778 granted = 22% success

Linkage grant applications open in March, closeMay and are announced in October

2011: 418 applied, 121 granted = 36% success

Overall success rate 22.6% Average level of funding = 57%

ARC

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Higher Education Sector

Each year, Australian Universities receive funding under the followingfrom the Commonwealth for research (DIISRTE):

International Postgraduate Research Scholarship Scheme ($21.5m 3.7%)

Joint Research Engagement Program ($345.3m 3.7%)

Research Infrastructure Block Grants (RIBG) ($233.1 3.7%)Research Training Scheme ($656.1m 3.7%)

Sustainable Research Excellence in Universities ($218.6m 24.4%)

The Australian Postgraduate Awards ($248.4m 11.9%)

Total DIISRTE spending in Higher Edu. Research $1,723m ($1,596m+7.4%)

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CSIROHeadline the morning after the budget: AUSTRALIAN GOVERNMENTSRECORD $3 BILLION SUPPORT FOR THE CSIRO

The reality: previously announced funding for 2012/13 wasactually cut $25m

Govt. funding: $737M ($725M -0.7%)

Non-govt. funding*: $591m ($585m)

the Government has committed $3B to CSIRO through a newQuadrennial Funding Agreement to operate from 2011 to 2015

Overall - $1.269B 12/13 up to $1.512B in 15/16 or 19%

* Income from IP, consultative services etc.

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Cooperative Research

CentresCRC program has been losingsupport for a number of years

Overall CRCs represent less than2% of Federal funding on

innovation

Annual CRC application round isextremely competitive

Many have stated its not worththe effort!

Last year 30 applications (new & renewals) - 4 granted

$154m ($166m -4%)

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Overall

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Australian Science Market Three major groups (% dom. revenue)

importers & distributorsmanufacturers & exporterstechnical service providers

Aust. market roughly 2% of world Aust. economy = 1.7% of worldR&D spend is 10X manufacturingindustrys average2004 - 2012 CAGR is 8% - allsectors averageBusiness Barometer: June 07 to Dec.11 - CAGR = 12.0%Large tertiary educated workforce; 50%Largest industrial employer of SET

graduates

Source: ABS, IBISWorld, SIA, DIISR, DoHA, DEEWR, Treasury

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Summary

Total spend on science & research up$126m (1.3%)

A lot of funding increments designedonly to cover CPICSIRO budget at, CRC program downsome more

The ARC has received an increment infunding whilst NHMRC funding is at.McKeon Medical Research fundingreview underwaySynchrotrons back in the fundingecosystem

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SummaryUniversity research has done well: $656 million for the Research Training Scheme $233 million for Research

Infrastructure Block Grants $345 million for Joint ResearchEngagement $219 million for SustainableResearch Excellence $248 million for AustralianPostgraduate Awards $22 million for InternationalPostgraduate Research Scholarships

the budget has nothing of majorsignicance for small business andabsolutely nothing specically for theexporter

the high dollar, the GFC, high interest rates, highlabour costs and continued high trade facilitationcosts

Budget completely lacks inspiration forour technologically advanced future

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sia 2012 budget update

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