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Thursday, 18 August 2005
Page: 184

Mr Murphy asked the Minister for Industry, Tourism and Resources, in writing, on 17 March 2005:

What target has the Government set for gross expenditure on research and development as a proportion of GDP and how will this target be met?

Mr Ian Macfarlane (Minister for Industry, Tourism and Resources) —The answer to the honourable member’s question is as follows:

Australia’s gross expenditure on R&D (GERD) has been steadily increasing, and in 2002-03 reached $12 250 million (in current prices), an increase of 17.6% on 2000-01. GERD as a proportion of GDP was 1.62% in 2002-03, representing an increase of 0.07 percentage points since 2000-01 when it was 1.55%. This increase of 0.07 percentage points is higher than the OECD average growth of 0.02 and the EU-15 average growth of 0.05 over the two year period. Australia’s GERD as a percentage of GDP has been rising since 1998-99, when it was 1.51%.

Sound innovation policy and performance is much broader than simply developing expenditure targets. Businesses expenditure on R&D, for example, is impacted by a range of issues. It is the creation of an environment conducive to business investment in R&D and its commercialisation as well as the availability of mechanisms to address market failures - and not targets - which will facilitate growth and employment. For example, Australia’s industry structure is quite different from that of many other developed nations, with a long standing strength in resource industries such as agriculture and mining. More recently, industry has invested heavily in ICT and there is a growing biotechnology industry in Australia. Unlike many of our competitors, however, we do not have large Australian aerospace and pharmaceutical industries.

The Government’s policy statements, such as Backing Australia’s Ability (2001) and Backing Australia’s Ability, Building Our Future Through Science and Innovation (2004), implements this approach and focuses on delivering outcomes. And the data shows our policies are working.