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Tuesday, 30 August 1994
Page: 554

Senator FORSHAW —My question is directed to the Minister for Industry, Science and Technology. I refer to the release last week of ABS data relating to Australian business enterprise expenditure on research and development for the 1992-93 financial year. This data showed that business research and development is now at its highest level on record at over $2.7 billion. I ask the minister: how does this level of growth compare with other similar economies? What action is the government taking to maintain and increase this level of growth in business R&D?

Senator COOK —In checking the level of research and development in Australia one has to have regard to the level of government funded research and development. On that index, Australia ranks about fourth in the whole of the OECD. But on business funded, private sector funded research and development, Australia ranks very much at the bottom of the OECD table. So the government has been concerned to stimulate the private sector into investing more funds in research and development in order to gain the competitive edge in industry. What is heartening from the figures referred to in this question is that the evidence is coming through now that the private sector is responding and deserves to be congratulated on its response.

  The new Australian Bureau of Statistics data show a sharp increase in business research and development expenditure between the 1991-92 financial year and the 1992-93 financial year to bring it to the highest ever levels that it has achieved in Australia. We achieved a stunning 17 per cent real increase in research and development in just one year. Business research and development expenditure in Australia has now reached almost $A2.8 billion, or 0.67 per cent of gross domestic product. That is up 0.25 per cent from just a year ago. So we have moved from 0.25 per cent to 0.67 per cent in the space of one year—a strong performance indeed.

  During the 1980s industrial research and development grew faster in Australia than in all but one other OECD country. From 1981-82 to 1991-92—that is, a 10-year span—we achieved a real annual growth of 13 per cent in our business research and development expenditure. In that period, Australia applied for more patents than any other country in the OECD. During the period of the recession, research and development expenditure in Australia held up. It did not decline as it did in most other countries in the world. Business maintained its commitment in the hard times; it is not surprising that it has gone on with it now.

  Business investment in research and development is further evidence that our economic strategies and the work we have put into restructuring the Australian economy are paying dividends and are starting to be responded to more broadly by the private sector. Government settings to encourage research and development are the 150 per cent tax concession on R&D, the industry innovation program, our partnerships for development program and the industry development arrangements. All these have worked with the Australian private sector in lifting those levels.

  Having said all that, what should also be said is that, notwithstanding this very good performance, we still have a way to go and we still have much to do to improve on what has been historically a poor performance overall. While we have improved well and the signs are promising, we have not got to the ideal yet—although during the last period of the recession, whilst research and development fell off in France, Germany, Japan, the Netherlands, the UK and the United States, it grew in Australia.

  That brings me to a report I saw in the press today that Senator Hill has made some comments about an opposition blueprint for research and development. Like all things coming out of the policy free zone, there was very little detail here but a lot of platitudinous, well-meaning sentiment. It is good to hear platitudinous, well-meaning sentiment, but we look forward to the opposition's directions statement to see whether the opposition will tell the people of this country what its detailed policies might be. (Time expired)