ACCI welcomes ‘milestone’ discussion paper on R&D system

The Australian Chamber of Commerce and Industry has voiced its support for the release of a discussion paper leading to a landmark examination of the government’s research and development (R&D) system.

ACCI noted this was a welcome move by the government as R&D investment in Australia had been on steady decline over the past decade, despite being critical to productivity.

On Wednesday, the panel leading the review into the R&D system released the discussion paper which invited interested parties to have a say on how R&D performance could be strengthened to drive productivity and foster economic growth.

The paper highlighted a stark decline in Australian R&D over the past 15 years, with local investment in R&D now only 1.66 per cent of GDP, well above the OECD average of 2.7 per cent.

ACCI CEO Andrew McKellar said R&D investment in Australia had been “limping along” for too long now and was part of the “productivity malaise” in Australia.

“R&D is just one factor in enabling productivity but it’s an important one – it’s how we stimulate innovation, it’s how we advance new ideas, and it’s how Australia has led the world with inventions like WIFI, pacemakers and even Google maps in previous decades. But that kind of productivity is stymied when the policy settings are not fit-for-purpose,” he said.

“We have been encouraging the government to set a target of 3 per cent for R&D investment for several years now and build a strategy to work towards that. We look forward to speaking with the panel about why this is essential for Australia’s growth and wellbeing.”

According to the R&D panel led by chair Robyn Denholm, the discussion paper also highlighted other structural issues such as falling business investment in R&D, Australia lagging behind other OECD countries in development and translation, weak research collaboration and the need for stronger manufacturing.

Denholm noted the panel was considering a range of paths to maximise the value of existing investment in R&D and strengthen linkages between research and industry.

“My objective through this examination is to unlock the immense potential of Australian research by turning it into tangible outcomes that deliver economic and societal benefits and enhance our global competitiveness,” she said.

“The discussion paper is a crucial step in this comprehensive examination. The panel welcomes views from all people across the country, to help us look at what Australia already does well in the R&D environment, and what we can do better.”

ACCI noted it was strong in its support for R&D advancement; however, it understood Australia couldn’t simply clone the systems of other jurisdictions based on 97 per cent of Australian businesses having less than 20 employees.

McKellar said Australia’s tax system was a strong disincentive to invest in R&D and that the excessive complexity of the R&D Tax Incentive discouraged businesses from engaging in innovation, yet the business community remained hopeful that the discussion paper would be a positive step in boosting innovation and increasing global competitiveness.

Denholm said the panel was also hopeful the paper would ignite change in the R&D sector.

“It’s crucial that we put innovation at the centre of our national goals. A robust and forward-looking R&D ecosystem is vital to the future of the country,” she said.

“Australia’s greatest assets include our people and our extraordinary know-how. We excel in research. Developing, translating, and commercialising that research is critical for economic growth.”