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Tuesday, 22 June 1999
Page: 7119

Mr McMULLAN (10:03 PM) —In the debate tonight on the Appropriation Bill (No. 1) 1999-2000 I want to speak about something which I have raised on a number of occasions and about which I cannot get a response from this government. It is a matter which the Leader of the Opposition correctly described as a national emergency—the collapse in business investment in research and development in this country. It has been illustrated in many articles, in many analyses and in the budget papers, which I will refer to in a moment, but let me just choose one example in the time available.

In the Age on 5 June 1999, after the budget, the article on page 4 says:

Australia no longer the clever country. Cuts to research and development are taking their toll.

I will make a few quotes from that before I go on to look at the statistics and the case. It says:

Business spending on research and development plunged another six per cent in 1997-98 reflecting the deepening fallout from the federal government's drastic cuts to research and development support.

It goes on:

. . . R&D has gone sharply into reverse since 1996, the year the Government cut its support for business R&D by half.

In the next paragraph, it says:

. . . Australian business employed 10 per cent fewer researchers than when the coalition took office—

What a scandal: 10 per cent fewer people out there generating the new knowledge that is the basis of the next generation of high income jobs in this country. It continues:

Projections point to an even steeper fall this year, with business predictions even in current dollars—

without taking into account the price effects—

running 6 per cent below the levels of a year ago.

In another paragraph, it highlights the area, a potentially vital area of industrial potential for this country. It says:

In food processing, R&D spending has slumped from $291 million to $179 million . . . and is projected to fall to $163 million—

It continues:

The bureau's figures—

on which this article is based:

show Australia's experiences is in sharp contrast to other Western countries, which not only had higher R&D levels to begin with but are increasing them as we cut back.

The article continues:

Between 1985 and 1996, Australia's business spending on R&D escalated from 0.34 per cent of Gross Domestic Product to 0.86 per cent.

It has fallen back since 1996 to 0.72 per cent. In those same two years, 1996 to 1998, in which our business investment in R&D fell from 0.86 to 0.2 per cent, in the United States it went up from 1.88 per cent to 1.96 per cent. The article says:

. . . more than two-and-a half times the level here.

And the government wonders why people are concerned about where the next generation of intelligent jobs might come from. The government would not release the science and technology budget statement on budget night. When that came out a couple of days later, the myth of increased spending on R&D was exposed by the government's own documents which showed again as a percentage of GDP and in real terms continuing decline in government support for research and development, even taking into account the changes that have been made for medical research. Why should we be surprised? The Prime Minister has got form on this.

The historical data has only been reliably collected by the ABS since 1974. You can go back earlier, but it is very unreliable. The ABS has been doing it for 25 years. When the Fraser government took office, you had 0.34 per cent of GDP for business expenditure on R&D and in every year of the Fraser government it fell. It never increased and it fell continuously to 0.25 per cent by the time John Howard had finished as Treasurer. From that time until the coalition took office, it increased every year. It never fell one year; it was flat at 0.49; it never fell again. Over that 13-year-period, it got up to 0.88 per cent of GDP, which is not actually very good—it is still below the average in the OECD—but we were starting to get there. As soon as this lot got into office, down it went again. What I want to know is: when is the government going to stop hiding behind the Ralph committee and actually take some action about this matter? (Time expired)