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How science dollars are spent -

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STEVE CANNANE, PRESENTER: You can split scientific research broadly into two categories: science based on using existing knowledge to solve problems and create new products; and science that seeks out or stumbles upon entirely new forms of knowledge.

When Einstein came up with the theory of relativity, that was basic research. Decades later, applied research used relativity theory to come up with the global positioning systems that sit in millions of car dashboards, accurately estimating the minute difference in time between satellites in space and clocks on Earth.

Well, in a moment we'll speak to one leading scientist who argues we need to be spending more on developing these new forms of knowledge, which he says have a bigger long-term benefit for humanity and for industry.

But first our political correspondent, Tom Iggulden, has been looking at how the Government's been spending its science dollars.

TOM IGGULDEN, REPORTER: The Industry Minister's responsible for where most of the Government's research spending goes. He says he's a science kind of guy. His mum had a science degree.

IAN MACFARLANE, INDUSTRY MINISTER: My grandfather was a geologist. In fact, he was the chief government geologist in Queensland.

TOM IGGULDEN: And that's why he says he gets why scientists need room to explore their wild side, with ideas that might seem a little out there.

IAN MACFARLANE: Every scientist should have a part of his or her being that wants to do some blue-sky research.

TOM IGGULDEN: The Government spends about $9 billion a year supporting science. The Minister says lots of that is put towards basic research that might not have an immediate application.

IAN MACFARLANE: We do that in the CSIRO. We do that in universities. But at the same time you do need an applied science perspective because in the end, what we want to do is get these really good ideas turned into commercial ideas so that they not only make it better for human mankind but also to provide jobs and opportunities for Australians.

TOM IGGULDEN: But exactly how much of the science budget goes to applied research and how much to pie-in-the-sky ideas is at this point a scientific mystery in itself.

IAN CHUBB, CHIEF SCIENTIST: We're about to find that out. I mean, we released the national research priorities a couple of weeks ago. We're now going back in and saying, "Well, how much do we actually spend in these priority areas now? What's the balance like between the priorities?"

TOM IGGULDEN: Last month's release of the national science priorities was a first for the Government. Other countries have done it for years and the chief scientist's made it a personal crusade to do it here.

IAN MACFARLANE: He went out and said, "Australia needs research priorities." We can't just spray money around at a whole range of issues. We need to focus down on the issues that he's identified.

IAN CHUBB: So when you've got a rationed resource but some things that are critically important for the nation, then you'd want Government to identify them, just to make sure that we're putting enough effort into those areas.

TOM IGGULDEN: The nine priorities are unashamedly commercial.

The first is food, where the aim is to develop "internationally competitive, sustainable, profitable, high-intensity and high-production capacity." Soil and water for "better decision-making strategies in the context of potentially conflicting demands between development, the environment and landscape management."

Transport research should "meet the needs of businesses and enable sustainable mobility, while lowering carbon emissions." Cyber security "underpins the entire knowledge economy," while energy research should find new sources that "progressively reduce carbon emissions and that are economically attractive."

Resources research should "optimise long-term economic, social and environmental benefit," advanced manufacturing to "dominate in selected product categories," while climate change research should aim "to mitigate and adapt to local and regional effects" and lastly, health research which "would generate wider economic benefits through improved knowledge translation and commercialisation."

IAN CHUBB: A proportion of the budget should go into these priority areas because, after a reasonably long process, we've identified these particular ones and the challenges attached to them as being ones where we need to make sure we're investing an appropriate amount.

TOM IGGULDEN: Is there a danger, though, with those priority areas that you are being too prescriptive; that you are restricting the ideas that might lead to big breakthroughs that we haven't actually thought of yet?

IAN CHUBB: Well, there's a danger in doing something and there's a danger in doing nothing.

IAN MACFARLANE: We'll be focussing our research fundings on those areas, but not exclusively.

TOM IGGULDEN: The Minister's not expecting a radical shake-up of research funding.

IAN MACFARLANE: The blue-sky work is still being done and it's being done at a level which is of world excellence.

TOM IGGULDEN: But the release of the priorities comes after several years of budget cuts to some of the country's biggest research bodies, including the CSIRO. With fewer dollars, the balance between basic research and targeted research will, say some, be harder to manage.

IAN MACFARLANE: Well, the exact balance of how much CSIRO does, in which area, is a decision for the board, not for the Government.