Submission to the Strategic Examination of Research and Development Issues Papers

A strong research and development (R&D) sector benefit all Australians. ATSE welcomes the release of the Strategic Examination of Research and Development (SERD) Issues Papers and the proposed actions to strengthen Australia’s R&D sector. Many of these proposals reflect recommendations in our initial submission to the SERD or from our Boosting Australia’s Innovation report.

These submissions examine each of the six Issues Papers and provide recommendations on the implementation of these measures to ensure they are as effective as possible in building Australia’s R&D system. 

1. National coordination

ATSE welcomes the establishment of a national coordination body to streamline R&D funding, reduce duplication and set a long-term strategic direction for the sector. A Commonwealth-level governance board with a 10-year planning cycle could make the system more efficient and effective, particularly if aligned with existing national and state strategies. Its success will depend on expert, cross-sector representation (including international perspectives), broad and outcome-oriented priorities, and flexibility to respond quickly to emerging challenges such as pandemics or technological shifts. Climate change and green energy should be at the forefront of these priorities, supported by mechanisms to add new focus areas as needs evolve.

Recommendation 1: Ensure membership of the Commonwealth level governance board includes board members with broad experience across high performing international R&D sectors, industry, transdisciplinary R&D and cross-sector R&D.
Recommendation 2: Ensure focus areas set mission-driven objectives without limiting the research scope to allow support for convergent research projects directed towards meeting these objectives.
Recommendation 3: Develop a process for adding emerging priority areas to the list of identified priorities to ensure the governance board can react to rapid technological or societal changes.

2. Scaling the system

ATSE emphasises that scaling up Australia’s R&D system requires a deliberate, programmatic approach that strengthens existing collaboration mechanisms, reforms university and government processes and embeds greater tolerance for risk and failure. Alongside changes to grants and procurement to encourage innovation, there must be support for industry development, domestic manufacturing, and knowledge transfer. Improving access to academic outputs and research data through open access and interoperable systems will accelerate innovation, enable new partnerships, and address Australia’s low levels of industry–academia collaboration.

Recommendation 4: Use government procurement policy and revenue contingent loan or grant schemes to help scale startups and small businesses conducting or based on Australian R&D.
Recommendation 5: Invest in research data infrastructure to support open access and open data while instituting open access and open data requirements for government-funded research.

3. Research, development & innovation incentives

ATSE notes that while the R&D Tax Incentive (R&DTI) is Australia’s largest industry research incentive, it has been criticised for being overly broad, administratively complex, and not driving additional business R&D investment. A more effective model would balance a refined R&DTI with direct funding, procurement, and income-contingent loans to support priority areas and help businesses through the “valley of death.” Alongside funding reform, a skilled workforce is essential. ATSE strongly supports mentoring and commercialisation training for researchers and highlights its Industry Mentoring Network in STEM (IMNIS) program as a proven model to build industry knowledge, skills and connections.

Recommendation 6: Reform the R&DTI to better target additionality, national priorities and collaboration, while directing savings towards direct funding through income-contingent loans.
Recommendation 7: Base the proposed entrepreneurial and commercialisation mentorship program on ATSE’s IMNIS program for research students and early career researchers.

4. Investment and capital

ATSE highlights the significant potential of Australia’s $4 trillion superannuation system to boost national R&D investment, noting it is set to become the world’s second-largest retirement savings system. Even a small mandated allocation—for example, 0.1% of balances, could unlock billions in additional R&D funding while costing members only a few dollars each. Pooled investment vehicles, pilot requirements for public sector funds, or opt-in mechanisms could make superannuation investment in R&D simpler, less risky and more accessible. This approach would not only fund innovation but also build a stronger national culture of investing in Australian R&D, with Hostplus already demonstrating the practicality and profitability of such investments.

Recommendation 8: Leverage superannuation funding to invest in Australian R&D through a small minimum Australian R&D investment mandate or investment options.

5. Foundational research

ATSE emphasises that foundational and curiosity-driven research is the bedrock of Australia’s innovation system, underpinning future discoveries, industries and technologies. Sustained, flexible funding is needed to maintain continuity and allow researchers to pursue ambitious, long-horizon questions. ATSE also advocates for greater investment in high-risk, high-reward “moonshot” research, which drives breakthrough innovation but is often overlooked in favour of incremental advances. Strengthening collaboration between the SERD Panel, ARC and NHMRC would ensure national programs better support such curiosity-driven research. 

In addition, ATSE calls for improved support and recognition of replication and null-result research, which are essential for validating findings and building confidence in scientific outcomes. Increased funding and open access to these studies would reduce duplication, enhance transparency and make Australia’s R&D system more robust and efficient.

Recommendation 9: Support ambitious breakthrough research through major grant funding schemes.

Recommendation 10: Champion null result and replication research by ensuring dedicated government grant funding for these.

6. Government as an exemplar

ATSE supports positioning governments as champions and major customers of Australian innovation through a coordinated, whole-of-government approach led by the proposed national governance board. Current procurement practices are limited by low risk appetite and short-term planning, and ATSE recommends legislating a clear responsibility for supporting domestic innovation. Establishing a single, streamlined “one-stop-shop” grants system across federal and state agencies would reduce duplication and improve efficiency, allowing successful practices such as two-stage applications and near-miss referrals to be shared across departments and funding bodies to better harness Australia’s best ideas.

Recommendation 10: Reform legislative objectives, budget processes and coordination of government procurement to enshrine a whole-of-government approach to procurement that invests in Australian innovation.

Recommendation 11: Develop a one-stop-shop cross-government grant application system, allowing grant applications to be centralised and sent to other relevant open rounds.

Recommendation 12: Adopt best practices from across government research funding bodies, including a routine approach to sharing ‘near-miss’ applications with other relevant funding bodies.