Budget Wrap 2021

The 2021-22 Federal Budget includes a range of measures relevant to technology, science and engineering.

Many measures are also particularly relevant to ATSE’s key policy priorities:

• Mitigating and adapting to climate change

• Enhancing research collaboration, translation, and commercialisation.

• Exciting and educating young people in STEM

ATSE’s pre-budget submission outlined a series of recommendations for Government investment, and it is pleasing to see some of these priorities adopted in the budget, including climate change adaptation, STEM education and career pathways, and measures to increase research commercialisation.

Overall, the 2021-22 budget funding measures mostly build on the 2020-21 budget. However, the measures appear somewhat inconsistent, lacking a clear strategy or vision for the future. Particularly, it remains unclear as to who the budget is actually for.

ATSE’s immediate response on budget night was disappointment at this missed opportunity for Australia to set our sights on becoming a global clean energy powerhouse. Most of the investment to address climate change was targeted at adaptation strategies, which are clearly necessary. But we would have liked to have seen at least an equal amount invested in accelerating and leading Australia’s transition to a low emissions economy. There were millions of dollars of new money in the budget supporting fossil fuel industries, such as gas and oil, but very little to support technologies that could see Australia become a leader in exporting its sunshine.

Key budget measures and observations

$15.2 billion in infrastructure spending, mostly dedicated to road upgrades, but unfortunately lacking support or vision for electrification of Australia’s land transport – responsible for around 15 per cent of Australia’s emissions.

$1.8 billion over five years for a Women’s Economic Security package to improve women’s workforce participation and economic security.

• Includes $42.4 million in new money allocated over the next seven years to establish the Boosting the Next Generation of Women in STEM This program will co-fund up to 230 scholarships for women in STEM higher education, in partnership with industry.
• There is also $38.3 million over five years to increase grant funding available through the Women’s Leadership and Development Program.

$1.6 billion over ten years is allocated to Emissions Reduction and New Investments under the Technology Investment Roadmap.

• This includes $565.8 million to be invested into establishing low emissions technology partnerships and initiatives with key trading and strategic partners. The aim is to help Australia co-fund research and demonstration projects that drive down the costs of low emissions technologies in these countries, and may help create an export market for Australian technology.
• There is essentially no new, direct investment for clean energy or climate mitigation technologies. The technologies highlighted are still on the horizon and there remains a clear gap in support for other mature technologies, such as solar PV and wind, that can help reduce Australia’s emissions today and make us a leading, clean energy exporter.

$1.2 billion in funding over six years is allocated for the Digital Economy Strategy.

• There is money for a long awaited digital economy strategy but no substantive vision to go with it.
• The measures proposed do not address Australia’s digital divide. Figures from the latest Digital Inclusion Index suggest that more than 2.5 million people remain offline.
• The package includes $124.2m for enhancing our Artificial Intelligence (AI) capability. However, there is no money for AI research and Australia’s first Artificial Intelligence (AI) Action Plan is yet to be released.
• Despite some money being allocated to the Digital Transformation Agency in the strategy, the Agency is budgeted to have a $90 million reduction in funding in 2022.
• It is also worth noting that the CSIRO has also concurrently announced the allocation of $100m in their own funding for emerging digital technologies.

$1.2 billion over five years to improve Australia’s capability to better prepare for, respond to, and recover from natural disasters.

• Resilience is frequently mentioned in the budget but rarely in relation to infrastructure. ATSE has recently released a position statement on the importance of a national focus on the sustainability and resilience of infrastructure in Australia. The statement highlights the potential for a national strategy and vision for the role that infrastructure could play in building Australia’s future sustainability, resilience and prosperity.
• A key measure in this package is $209.7 million over four years to establish the Australian Climate Service. The service is a partnership between the Bureau of Meteorology, Geoscience Australia, CSIRO and Australian Bureau of Statistics. Its work is guided by recommendations in the Royal Commission on National Natural Disaster Arrangements. The Service will focus on providing analysis to support Emergency Management Australia and the new National Recovery and Resilience Agency – all focused on resilience and adaptation. It would have been good to see the agency empowered and resourced to also look at climate change mitigation.

$850.4 million for a series of measures dubbed the ‘Agriculture 2030’ package.

The Agriculture 2030 package is a missed opportunity to recognise the importance of technology in the agriculture and food sectors. The package contains some 39 measures but only two measures (less than one per cent of the funding) relate to technology.

• $4.2 million over four years as an initial investment into Australia’s agricultural innovation system through the National Agricultural Innovation Agenda, including the development of strategies for forward investment into four National Agricultural Innovation Priorities.
• $0.5 million over three years for an expanded Australian Farm Data Code.

Research, Development and Innovation

The budget includes no new direct money to support Australia’s public universities following the $1bn in funding that they received in the 2020-21 budget. Public research organisations and funders have retained their funding from the 2020-21 budget. Some – including the NHMRC, Geoscience Australia, ANSTO and the Australian Space Agency – have received extra funding for specific purposes.

The budget does contain a range of funding measures across different initiatives for the innovation and research ecosystem, including:

• A tax concession ‘patent box scheme’ to support commercialisation of medical and biotechnology research. This will see income from these patents taxed at a concessional rate of 17 per cent.
• A $54.2m Global Science and Technology Diplomacy Fund to support strategically important science and technology collaborations with global partners. Schemes such as the Australia-China Science and Research Fund and the Australian-India Strategic Research Fund will be consolidated under the new banner.
• $300 million for the Square Kilometre Array giant telescope in regional WA. This is a direct investment into important research infrastructure. This is above investments flagged in the 2020 Research Infrastructure Investment Plan. Work on the anticipated 2021 National Research Infrastructure Roadmap is yet to be confirmed.

Education

The budget includes a wide range of measures to enhance higher education in Australia, although few of them are targeted at public universities. Some of the most interesting measures include:

• Removal of the exclusion of the first $250 of deductions for prescribed courses of education.
• $1.1 million over two years from 2020-21 to create new employment pathways for students and boost financial incentives for universities to enrol students in ‘Industry PhDs’. Industry PhDs will introduce an additional weighting in the Research Training Program funding formula for PhD students who undertake an industry placement.
• $26.1 million over four years to assist non-university higher education providers to attract more domestic students, through offering 5,000 additional short course places in 2021.

Health

The budget includes a significant amount of funding for health, this has been extensively reviewed by our sister Academy, the Australia Academy of Health and Medical Sciences (AAHMS).

Key Policy Opportunities that ATSE will be keeping an eye on in 2021-22

1. How will Government policies support the development of international partnerships that can encourage investment in low emissions technology?
2. Will the work of the Australian Climate Service transition to providing advice that can be used for climate mitigation efforts, as well as for adaptation?
3. Emerging developments in research infrastructure and commercialisation, including the AI Action Plan, National Research Infrastructure Roadmap and the University Research Commercialisation Scheme (and related funding).
4. How will the Digital Economy Strategy facilitate getting all Australians online to allow their participation in the digital economy?
5. What is the scope of the ‘patent box scheme’, and can it be effectively implemented to facilitate medical and biotech research translation and commercialisation?