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Budget 2003: Science and innovation.



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JOINT MEDIA RELEASE

MINISTER FOR EDUCATION, SCIENCE AND TRAINING THE HON DR BRENDAN NELSON MP

MINISTER FOR SCIENCE THE HON PETER MCGAURAN MP

SCIENCE AND INNOVATION

13 May 2003 MINBUD 48.1/03

A $437 million increase in support for Australian science and innovation in the 2003-04 Budget reflects the Howard Government’s commitment to these key drivers of national economic growth. The increase brings total Commonwealth support for science and innovation to an estimated $5.4 billion in 2003-04.

The funding continues to provide record support for science and innovation, which is one of the Government’s nine strategic priorities, further underscoring the Government’s vision of securing Australia’s future.

The Government’s commitment to the five year $3 billion Backing Australia’s Ability initiative continues to be delivered, with $644 million allocated for 2003-04, which represents an increase of around $217 million on the 2002-03 commitment.

"The Government’s strategic approach to science and innovation is again highlighted by the real support provided for both basic research and the creation of world class centres of excellence," Dr Nelson said.

"This approach will continue the drive to find valuable partnerships within the research sector and between researchers, industry and government, drawing on some of the best minds across the country and internationally to address issues vital to the future of Australia."

The Minister for Science, Peter McGauran, said that the Budget continues to deliver on the Government’s Backing Australia’s Ability commitments in full and on time, with the planned increases in funding for science and innovation in 2003-04.

The Budget strategy is underpinned by the national research priorities announced following extensive consultation, which cover the environment, personal health, frontier technologies for industry, and safeguarding Australia.

"Research priorities provide a focus for investment in key areas that can deliver significant economic, social and environmental benefits to Australia," Mr McGauran said.

"Further support is being provided by a project to map Australia’s science and innovation capacity which will report to the Government by the end of 2003.

"The mapping will be fundamental in planning future strategic direction in science and innovation. It will build a detailed picture of Australia’s science and innovation effort. It will help the Commonwealth, State and Territory governments, and research institutions and industry, to make better decisions in the allocation of resources and identify areas for additional support."

Links between Australia’s research community and industry partners is given a boost by the Budget injection from the Backing Australia’s Ability package of an additional $143 million for the Australian Research Council (ARC) and $55 million for the Cooperative Research Centres (CRC) programme in 2003-04.

The additional funds will strengthen the ability of Australia’s leading research organisations to stimulate research and promote industry participation.

The important CSIRO Flagships programme, announced by the Prime Minister in April 2003, also receives a $20 million Budget boost for scientists, research institutions and commercial companies to work together to make a difference to Australia’s social and economic growth over coming decades.

The breadth of the Government’s commitment to new ideas is also reflected in $124 million of Backing Australia’s Ability funding in 2003-04 for the Systemic Infrastructure Initiative and the Research Infrastructure Block Grants.

The drive to focus on excellence in areas where Australia is building critical mass expertise is also a feature of the 2003-04 Budget measures.

● A new world class centre for marine biology will be created in Townsville as a result of affiliation

between the Australian Institute of Marine Science (AIMS) and James Cook University. It is proposed the centre be called the Australian Institute of Marine Science at James Cook University. An amount of $5 million will be available to facilitate the change which will take place in consultation with the Queensland Government.

● The Government will establish a new agency in the Industry, Tourism and Resources portfolio,

the National Measurement Institute, to provide world class measurement standards and services to Australian industry. The new institute will receive $3 million over two years from the existing resources of the Department of Industry, Tourism and Resources. The new body joins together the National Measurement Laboratory, the National Standards Commission and the Australian Government Analytical Laboratories, bringing together national functions in physical, chemical and biological measurement.

● In the wake of the devastating Canberra bushfires in January, the Government has also

provided $7.3 million to assist the Australian National University rebuild its world class facilities for teaching and research in astronomy at Mt Stromlo Observatory in Canberra.

● The World Class Centres of Excellence in Information and Communications Technology (ICT),

and Biotechnology, are now operational and will be operated by National ICT Australia and the National Stem Cell Centre, respectively. Eight ARC Centres of Excellence have also been established in the four priority areas: complex/intelligent systems, genome/phenome research, nano-materials and bio-materials, and photon science and technology.

The Budget also commits an additional $17.9 million over four years for upgraded security at the Australian Nuclear Science and Technology Organisation’s (ANSTO) Lucas Heights Science and Technology Centre.

As part of the Government’s commitment to effectively manage the safe disposal of low level radioactive waste, $2.2 million has been allocated in 2003-04 with over $600,000 allocated for the following three years for the construction and operation of a repository for waste.

These initiatives, together with the roll-out of $644 million in 2003-04 for Backing Australia’s Ability

programmes, provide a strong platform on which to build a future strategic vision and direction for Australia’s science and innovation system.

For further information:

Gemma Allman (Minister McGauran’s office) 02 6277 7440

Ross Hampton (Minister Nelson’s office) 0419 484095

Dept. of Education, Science and Training: Virginia Cook 0412 971 323

Department of Education, Science and Training Budget at a Glance - Science

The following tables are also available in PDF:

● TABLE 1

● TABLE 2

● TABLE 3

● TABLE 4

● TABLE 5

TABLE 1 Summary of Major Commonwealth Support for Science and Innovation through the Budget and Other Appropriations - Actual Cost in Year Incurreda

Cash Outlays ($m)b Accrual Expenses ($m)b

post refc

est

actual budget est

1994-95 1995-96

1996-97 1997-98

1998-99 1999-00

2000-01 2001-02

2002-03 2003-04

MAJOR FEDERAL RESEARCH AGENCIES

● DSTO 1 247.4 267.6 254.9 245.5 249.2 264.8 284.9 340.3 346.5 355.3

● CSIRO 2 461.6 417.6 444.5 466.8 475.4 500.0 496.7 509.6 532.1 568.1

● Other R&D

Agencies

3 223.8 232.3 275.7 252.3 240.8 268.3 334.5 381.8 425.2 449.0

SUB-TOTALd 932.8 917.5 975.1 964.6 965.4 1033.1 1116.1 1231.7 1303.8 1372.4

SCIENCE AND TECHNOLOGY SUPPORT

● NH&MRC and

other health 4 151.8 163.0 166.1 173.6 193.7 185.7 308.9 247.5 339.2 378.3

● Cooperative

Research Centrese

5 103.7 132.7 143.1 146.9 142.3 137.5 139.8 146.5 148.6 202.0

● Rural 6 130.7 126.5 126.0 140.5 150.2 138.2 141.3 197.5 194.5 202.8

● Energy and

environment 7 19.1 19.6 11.4 25.2 8.9 11.8 20.9 33.6 38.1 63.4

● Other science

support

8 7.7 14.3 24.7 28.7 12.1 16.5 16.2 15.9 31.8 43.2

SUB-TOTAL 413.0 456.1 471.3 514.9 507.2 489.7 627.1 641.0 752.2 889.7

INNOVATION SUPPORT

● IR&D tax

concessionf

9 698 825 525 420 370 405 426 428 443 484

● R&D Start 10 45.6 50.4 62.4 102.7 130.7 154.9 155.3 207.0 126.1 168.2

● Other

innovation support

11 87.7 79.0 65.4 37.7 97.1 135.1 148.3 322.1 303.4 353.8

SUB-TOTAL 831 954 653 560 598 695 730 957 873 1006

HIGHER EDUCATION RESEARCH

● ARC 12 - - - - - - 247.8 265.2 363.3 413.9

● Other R&D

support

13 4 3 3 3 3 6 1547 1604 1697 1744

● R&D support

under former funding framework

14 1377 1502 1611 1675 1737 1776 - - - -

SUB-TOTALg 1381 1505 1613 1678 1740 1782 1795 1869 2060 2158

TOTAL COMMONWEALTH SUPPORT

3558 3833 3712 3718 3810 4000 4268 4699 4989 5426

% GDP 0.75 0.76 0.70 0.66 0.64 0.64 0.64 0.66 0.66 0.68

Notes:

a. The financial data in this table are an aggregate of the expenditure data sourced from tables 2, 3 & 4. b. Prior to the 1999-00 financial year, budget expenditures were reported on a cash accounting basis. Expenditures from the 1999-00 financial year onwards are reported in accordance with the principles of accrual accounting.

c. Posting references have been added to assist in the disaggregation of data to their respective sources in Tables 2, 3 & 4.

d. The financial data of the research agencies exclude the Capital Use Charge which was included in previous years. To facilitate comparability with the information from earlier publications, the total CUC applicable for each of the relevant financial years are provided in the table below:

1999-00 2000-01 2001-02 2002-03

Total Capital Use Charge ($m) 169.4 186.9 184.0 211.6

e. This includes $5 million to support the formal affiliation of the Australian Institute of Marine Science with James Cook University.

f. The amounts indicated for the R&D tax concession are estimates only. The estimates presented in the table relate to the year in which companies undertake the R&D for which they subsequently claim the concession. They depend on data published in the Taxation Expenditures Statement 2002 and will require revision as new taxation data become available. g. New funding arrangements due to the establishment of the Australian Research Council (ARC) as an independent

statutory authority and the introduction of new performance block funding schemes for research and research training under the Australian Research Council (Consequential and Transitional Provisions) Act 2001 have resulted in a break in the series for the published breakdown between ARC and other R&D support prior to 2000-01. However, the sub-totals shown are comparable throughout the series.

TABLE 2 Major Commonwealth Research Agencies - Budget Expendituresa,f

Cash Outlays ($m)b Accrual Expenses ($m)b

post refc

est

actual budget est

1994-95 1995-95

1996-97 1997-98

1998-99 1999-00

2000-01 2001-02

2002-03 2003-04

AGRICULTURE, FISHERIES AND FORESTRY

Australian Animal Health Laboratory

3 6.2 5.8 6.0 6.1 6.1 6.1 5.8 5.8 6.1 6.2

DEFENCE

Defence Science and Technology Organisationd,h

1 247.4 267.6 254.9 245.5 249.2 264.8 284.9 340.3 346.5 355.3

EDUCATION, SCIENCE & TRAINING

CSIROh 2 461.6 417.6 444.5 466.8 475.4 500.0 496.7 509.6 532.1 568.1

Australian Nuclear Science & Technology Organisationh

3 66.2 65.6 63.7 72.7 74.5 80.0 140.8 158.7 203.6 219.2

Australian Institute of Marine Scienceh

3 16.5 16.6 16.4 16.4 18.5 21.1 21.4 22.4 24.3 22.1

Anglo-Australian Telescope

3 3.0 3.2 3.3 3.5 3.6 3.7 3.7 3.8 3.9 4.0

ENVIRONMENT & HERITAGE

Antarctic Divisionh

3 61.3 63.1 59.4 61.9 62.7 80.1 83.8 92.0 83.5 84.8

Bureau of Meteorology Research Centre (BMRC) e,h

3 3.6 4.0 4.4 4.5 4.4 10.3 10.7 9.4 9.7 9.8

Environmental Research Institute of the Supervising Scientist

3 6.5 6.0 5.4 4.3 4.2 6.5 7.4 8.4 8.0 7.1

INDUSTRY, TOURISM & RESOURCES

Geoscience Australiag,h

3 60.5 68.0 117.1 82.9 66.8 60.5 60.9 81.3 86.1 95.8

TOTAL 932.8 917.5 975.1 964.6 965.4 1033.1 1116.1 1231.7 1303.8 1372.4

Notes:

a. The financial data have been supplied and/or confirmed by the departments and agencies responsible for administering the programmes listed in the table.

b. Prior to the 1999-00 financial year, budget expenditures were reported on a cash accounting basis. Expenditures from 1999-00 onwards are reported in accordance with the principles of accrual accounting.

c. Posting references assist in reconciliation with the aggregate expenditures presented in Table 1. d. DSTO expenditures shown here include costs associated with estate management and administrative support provided by other Defence Groups. The significant increase in 2001-02 is due to an internal reassessment within Defence of the cost of corporate support services provided to each Group.

e. The accrual data include items such as superannuation, overheads, and funds in trust accounts, which were not included in the cash expenditure data reported for financial years prior to 1999-00.

f. The main function of the Australian Institute of Health & Welfare (AIHW) is statistical collection rather than health & welfare research per se. Following discussions between the AIHW and the Department of Health and Ageing, it has been decided that as of 2003-04, financial data of the AIHW will not be included in this table.

g. The outlays in 1996-97 and 1997-98 financial years included major expenditure on capital works. In 2001-02, AGSO merged with AUSLIG to become Geoscience Australia.

h. The Capital Use Charge (CUC) is an internal accounting item which does not impact on the operating budget and was introduced in 1999-00 as part of the reforms to financial reporting. Because of the decision to abolish the CUC as of the 2003-04 financial year, the CUC component has been removed retrospectively from the financial data of affected agencies to affect comparability of financial data between 2003-04 and the preceding financial years to 1999-00. The CUC of the agencies affected are provided in the table below to enable reconciliation with financial data published in previous years:

Agency

1999-00 2000-01 2001-02 2002-03

Defence Science and Technology Organisation 4.5 6.9 0 0

CSIRO 117.1 114.3 102.9 107.2

ANSTO 24.6 40.2 57.7 68.9

AIMS 3.8 4.6 5.0 5.3

Antarctic Division 17.9 19.4 16.0 27.7

Bureau of Meteorology Research Centre -0.1 0 0 -0.2

Geoscience Australia 1.6 1.5 2.4 2.7

TABLE 3 Major R&D Granting Programmes and Other Support for Science and Innovation through the Budgeta

Cash Outlays ($m)b Accrual Expenses ($m)b

post refc

est

actual budget est

1994-95 1995-96

1996-97 1997-98

1998-99 1999-00

2000-01 2001-02

2002-03 2003-04

AGRICULTURE, FISHERIES & FORESTRYd

Wool Research 6 15.1 11.7 10.4 7.2 9.6 9.2 9.0 22.5 16.2 22.5

Meat Research 6 25.1 22.6 21.1 22.8 21.4 20.2 20.2 23.5 23.5 23.5

Fishing Industry Research 6 9.2 10.4 11.3 11.2 12.1 13.1 12.8 15.8 17.0 18.3

Grains 6 23.3 21.3 29.1 33.8 33.6 31.9 34.0 40.8 39.3 41.2

Horticulture Research

6

10.7 11.4 12.0 11.4 15.3 15.8 15.8 29.5 29.5 29.5

Land & Water Research

6

11.3 10.6 9.8 10.8 11.0 11.0 11.3 11.6 11.9 12.2

Rural Industries R&D Corporation 6 10.5 10.5 5.6 10.8 11.0 3.8 3.7 17.2 17.5 15.9

Other rural research 6 25.5 28.0 26.7 32.5 36.2 33.2 34.5 36.6 39.6 39.7

New Industries Development Programme 11 - - - - - 1.0 1.0 3.8 4.0 2.6

Food innovation grants 11 - - - - - - - - 1.9 8.9

Centres of Excellence

11

- - - - - - - - 0.9 3.0

COMMUNICATIONS, INFORMATION TECH. & the ARTS

ICT Centre of Excellence

11

- - - - - - - - 10.3 11.3

Building Information Technology Strengths - Incubators

11 - - - - - 19.5 6.0 22.7 16.1 11.6

Building Information Technology Strengths - Intelligent Island (Tas.)

11 - - - - - 20.0 0.0 20.0 - -

Information Technology Online (ITOL) 11 - - - - - 1.9 1.4 5.0 2.5 2.5

Software-Engineering Australia

11

- - - - 1.2 5.7 7.0 3.5 2.0 -

Test-IT 11 - - - - - - - - 0.5 -

Société Internationale de Télécommunications Aéronautiques

11 - - - - 1.7 2.2 1.7 2.3 2.1 1.1

Advanced Networks Programme 11 - - - - - - - 21.9 8.8 6.6

ENVIRONMENT & HERITAGE

Aust. Biological Resources Study 7 2.0 1.8 1.3 1.0 1.4 2.0 1.6 4.5 3.8 4.0

Greenhouse Research (NGRP) 7 6.0 6.0 3.5 3.6 3.1 4.0 3.8 3.9 3.9 4.1

Renewable Energy Comm. Programme 7 - - - - - - 6.8 8.9 9.9 14.0

Renewable Energy Equity Fund 7 - - - - 2.0 2.7 2.8 2.5 2.6 3.1

Energy research 7 11.1 11.8 6.6 20.6 1.5 - - - - -

National Carbon Accounting System 7 - - - - 0.9 3.1 5.9 4.8 5.3 2.7

Greenhouse Gas Abatement Programme 7 - - - - - - - 9.0 12.6 35.5

EDUCATION, SCIENCE & TRAINING

Cooperative Research Centre Grantsl 5 103.7 132.7 143.1 146.9 142.3 137.5 139.8 146.5 148.6 202.0

Major National Research Facilities 8 - 6.4 17.0 20.9 10.7 4.8 4.9 4.5 25.0 38.5

Innovation Access Program - international S&Te 11 - - - - - - - 4.1 7.7 7.6

Research Evaluation and Academies 13 2.1 2.1 2.2 2.0 2.5 2.3 2.5 2.4 2.5 2.5

Targeted Institutional Links Programme 13 1.4 0.8 0.5 0.5 - - - - - -

HEALTH & AGED CARE

NH&MRC Research Grantsf 4 126.7 141.3 152.4 158.9 176.0 185.7 308.9 247.5 339.2 378.3

Capital Works for Medical Institutes 4 13.0 9.6 2.0 2.7 5.7 - - - - -

AIDS Research 4 12.1 12.1 11.7 12.0 12.0 - - - - -

INDUSTRY, TOURISM & RESOURCES

Industry Innovation Programme (Includes R&D Start Grants)

10 - - - - - 154.9 155.3 207.0 126.1 168.2

R&D Start Loans Programme 11 - - - - - 15.9 12.8 16.1 10.0 17.0

COMET 11 - - - - - 2.1 8.9 12.2 11.7 7.7

Industry Innovation Programme 10 45.6 50.4 62.4 102.7 130.7 - - - - -

Innovation Investment Fundg 11 - - - 4.0 21.3 35.2 25.3 27.3 26.0 42.2

Pre-Seed Fund 11 - - - - - - - 0 6.0 14.0

Biotech Centre Excellence 11 - - - - - - - 0.8 3.6 4.6

Biotechnology Innovation Fund 11 - - - - - - - 4.0 11.9 15.6

Innovation Access Programme - industrye 11 - - - - - - - - 5.2 12.2

Technology Diffusion Programme

11 - - - - 12.8 15.9 14.2 12.9 4.2 -

Technology Support Centres 11 3.9 12.2 7.2 13.7 - - - - - -

International S&T Programme 8 5.5 5.6 5.6 5.6 - - - - - -

National Space Program 11 9.0 2.7 1.7 0.5 1.5 - - - - -

Shipbuilding Innovation Scheme 11 - - - - - 5.5 7.8 6.4 8.7 15.6

Assistance under the Bountyh

(Computers) Act 1984

11 74.8 64.1 56.5 19.5 58.6 - - - - -

Pharmaceutical Industry Investment Fundi 11 - - - - - 7.2 11.1 13.4 18.6 23.2

Automotive Competitiveness and Investment Scheme

11 - - - - - - 43.1 142.2 132.7 146.5

TRANSPORT & REGIONAL SERVICES

Payments to Austroads/ARRB Transport Research Ltd.

8 2.2 2.3 2.1 2.2 1.4 2.2 1.8 1.8 1.9 1.9

TOTAL 549.8 588.4 601.8 657.8 737.5 769.5 915.7 1159.4 1171.3 1411.4

Notes:

a. Sources: Financial data have been supplied and/or confirmed by the departments and agencies responsible for the programmes listed in the table. Expenses attributable to the administration of programmes are excluded from the data.

b. Prior to the 1999-00 financial year, budget expenditures were reported on a cash accounting basis. Expenditures from the 1999-00 financial year onwards are reported in accordance with the principles of accrual accounting.

c. Posting references assist in reconciliation with the aggregate outlays presented in Table 1. d. The expenditure figures for Wool, Meat, Other Rural Research, Fish, Horticulture and Grains exclude that component of Commonwealth outlays funded from industry levies. The component of outlays provided by way of industry levy or

contribution is given in the following table:

Industry Contributions - Rural Research Levies (estimated proportion of levies attributable to research purposes - $m)

1994-

95

1995-96 1996-97

1997-98 1998-99

1999-00 2000-01

2001-02 2002-03

2003-04

Wool 19.50 10.94 12.79 13.09 10.53 11.97 11.81 56.31 55.26 51.26

Meat 23.52 22.40 23.13 24.50 12.31 21.33 23.52 15.93 15.53 16.87

Grains

- Wheat

- Other Grains

16.28

8.51

33.65

17.18

35.17

19.48

32.02

20.39

31.64

17.97

29.05

17.75

27.37

21.13

37.14

24.79

37.00

23.74

35.00

24.81

Special Rural 1.32 1.57 1.39 1.87 1.80 - - - - -

Fish 2.41 2.46 2.52 2.88 3.30 3.61 3.57 4.40 4.97 5.34

Horticulture 3.61 4.28 8.04 9.06 8.86 9.83 10.77 10.44 21.06 21.55

Other Rural

- Chicken Meat 0.71 0.71 0.79 0.82 0.79 0.84 0.85 0.90 0.92 0.92

- Cotton 2.13 2.90 4.30 5.48 5.57 5.36 5.44 5.00 6.32 5.32

- Dairying 6.13 5.75 8.36 10.94 11.86 14.25 15.71 11.52 13.64 13.82

- Dried Fruitj 0.49 0.39 0.79 0.41 0.70 0.70 0.71 0.45 0.45 -

- Grape & Wine 2.08 1.91 2.62 2.37 4.60 5.63 5.52 7.35 8.09 8.32

- Honey 0.15 0.15 0.20 0.16 0.18 0.19 0.19 0.20 0.16 0.18

- Pig Industry 3.75 3.57 3.42 3.46 3.47 3.65 3.92 11.79 11.73 12.86

- Egg Industry 0.63 0.68 0.76 0.77 0.71 0.66 0.68 0.71 0.77 0.77

- Sugar 4.89 5.46 5.99 6.17 6.04 5.99 6.17 4.28 5.50 5.50

- Tobaccok 0.33 0.49 0.57 0.83 0.63 0.76 0.68 0.63 0.21 -

- Forestry 0.38 1.00 1.72 2.53 2.56 3.14 3.17 3.03 3.94 3.52

Total 96.82 115.49 132.04 137.75 123.52 134.71 141.21 194.87 209.29 206.04

e. Following the transfer of science to the new Department of Education, Science and Training (DEST), the Innovation Access Program (IAP) was split between DEST and the Department of Industry, Tourism and Resources (DITR).

f. Includes funding for health and health services research grants, and from 1999-2000 also includes AIDS research and the Medical Institutes. During 2001-02, the Department changed its accounting policy for the recognition of expenditure on research grants, with consequent adjustments to the appropriations, in line with Australian Accounting Standards (AAS 29) and changes to the Minister for Finance Orders. Adjustments have been made to the estimates to expense funds progressively in each year in which research is conducted, rather than in full when multi-year grant commitments are accepted. Thus, the adjustments only reflect changes to the timing of the recognition of expenses and do not impact on the aggregate level of multi-year grants able to be approved each year.

g. Appropriated via administered capital. h. The Bounty Scheme concluded in 1998-99. It provided assistance for local manufacturers of computer hardware, systems software and electronic microcircuits and covered design and development costs.

i. Funding allocated to supporting research and development activities under this programme. j. This levy is now combined with the Horticulture levy. k. This levy has ceased. l. This includes $5 million to support the formal affiliation of the Australian Institute of Marine Science with James Cook

University.

TABLE 4 Estimated Costs of Programmes and Incentives Providing Support for Science and Innovation outside the Budgeta

Cash Outlays ($m)b Accrual Expenses ($m)b

post ref c

est

actual budget est

1994-95 1995-96

1996-97 1997-98

1998-99 1999-00

2000-01 2001-02

2002-03 2003-04

COMMUNICATION, INFORMATION TECH & the ARTS

Support from the Federation Fund

- Commonwealth Technology Port 11 - - - - - 3.0 8.0 3.5 8.0 -

EDUCATION, SCIENCE & TRAINING

Former funding framework

Science Lectureships 13 - - - - - 3.9 11.0 - - -

Special research assistanced,e 14 306.3 346.4 396.5 420.4 451.2 442.9 - - - -

Funding for ANU Institute of Advanced Studiese 14 147 150 152 151 151 151 - - - -

Estimated research & research training component sourced in the operating grantf

14 924 1006 1062 1104 1135 1182 - - - -

Current funding framework

Performance based block funding for research and research training under HEFA

- Research Training Scheme

13 - - - - - - 504.5 515.6 529.1 540.4

-

Institutional Grants Scheme

13 - - - - - - 257.2 262.9 278.1 284.6

- Research Infrastructure Block Grantsg 13 - - - - - - 81.5 111.2 140.2 160.3

- Systemic Infrastructure Initiativeg 13 - - - - - - - 23.6 56.2 54.7

- Australian Postgraduate Awards 13 - - - - - - 83.1 83.2 84.5 89.3

- International postgraduate research 13 - - - - - - 16.2 14.0 17.7 17.7

- Regional Protection Scheme

13 - - - - - - - 2.0 3.3 2.0

Estimate of operating grant funding expended on researchf,h 13 - - - - - - 591 589 585 585

Australian Research Council 12 - - - - - - 247.8 265.2 363.3 413.9

Mount Stromlo Observatory Reconstruction

13 - - - - - - - - - 7.3

Support from the Federation Fund

- National Marine Science Centre 8 - - - - - 6.0 1.5 4.5 0.1 -

- Institute of Molecular Bioscience

8 - - - - - 3.5 8.0 3.0 0.5 -

ENVIRONMENT & HERITAGE

National Oceans Office 8 - - - - - - - 2.1 4.3 2.8

INDUSTRY, TOURISM & RESOURCES

R&D Tax Concessioni 9 675 800 500 390 340 370 380 270 280 320

Premium Tax Concession for additional R&Di, j

9 - - - - - - - 130 135 135

R&D refundable tax off-seti,k 9 - - - - - - - 15 12 10

Tax deduction for patents designs and copyrighti 9 23 25 25 30 30 30 35 - - -

Pooled Development Fundsi,l 9 - - - - - 5 11 13 16 19

TOTAL 2075 2327 2136 2095 2107 2197 2236 2308 2513 2642

Notes:

a. Financial data have been provided and/or confirmed by the departments responsible for the programmes as listed in the table. Expenses attributable to the administration of programmes are excluded from the data. ‘Outside the Budget’ refers to budget appropriations not made under Appropriations Bills 1&2.

b. Prior to 1999, budget outlays were reported on a cash accounting basis. Expenses from 1999 onwards are reported in accordance with the principles of accrual accounting.

c. Posting references assist in the reconciliation with the aggregate outlays presented in Table 1. d. Prior to 2000-01, ‘special research assistance’ included funding for research grants, fellowships, centres, postgraduate awards and infrastructure provided by the Australian Research Council (ARC) and the then Department of Education, Training and Youth Affairs (DETYA). e. This item includes funds for research and research training provided to the Institute of Advanced Studies (IAS) of the

Australian National University (ANU) through the ANU’s operating grant. From 2001-02 onwards, new arrangements were introduced to allow the IAS to make contributions from its block fund to gain access to the competitive and formula-driven research schemes of the then DETYA (now DEST), the ARC and the NH&MRC. Funding for 2000-01 onwards is subsumed in the item ‘Estimate of operating grant funding sourced for research’.

f. This represents an estimate of operating grant expended on research until 1999-2000. The estimate is based on the Australian Bureau of Statistics (ABS) survey of research expenditure of universities by source of funds. One of the sources identified by the ABS is General University Funds (GUF). The universities’ operating grant is the major component of GUF, and can be estimated by using the operating revenue figures from DEST calculated by applying the same proportion of GUF attributable to the operating grant, to the R&D funds sourced from GUF (this latter is based on year 1998 ABS data, and for 1999-2000 on year 2000 ABS data) For example, estimates for 1997-98 and 1998-99 are based on year 1998 ABS data while the 1999-2000 estimates are based on the year 2000 ABS data. Prior to 2000-01, such estimates included any funding for a notional Research Training Component, the Research Quantum and an estimate of all other research funding sourced by universities from the operating grant.

g. Performance-based block funding increased in 2002-03 as a result of additional support provided through Backing Australia’s Ability for the Research Infrastructure Block Grants Scheme and the Systemic Infrastructure Initiative.

h. This represents an estimate of operating grant funds expended on research from 2000-01. The estimate for 2000-01 onwards is calculated using the same methodology as for earlier years (see note f), but is a substantially reduced figure as a result of changes to the funding framework that resulted in some programmes no longer being included with the operating grant. Estimates for 2000-01 onwards are based on year 2000 ABS data, using operating grant data for subsequent years, exclusive of capital roll-in.

i. The data series is based on estimates of revenue forgone as published in the Taxation Expenditures Statement 2002 (TES) and earlier issues. Note that the TES estimates - particularly in the case of the final years shown - are revised each year as more data come to hand. Thus the series here will require revision in the future. The data in Table 4 relate to the financial year when companies undertake the activity for which they subsequently claim a concession of deduction - that is, they are the estimated costs to revenue that would have occurred if companies had made the tax claim in the same financial year in which expenditure was incurred. This means that the data series presented in this table is brought forward by one year with respect to that published in the TES, since the TES data series reports data in the year in which revenue is forgone by the Government (normally, the year after expenditure is undertaken by companies). The carrying forward is necessary to bring the time series into alignment with: (1) business expenditure on R&D as reported annually by the Australian Bureau of Statistics; (2) R&D expenditure data as reported by companies registered for the 125% rate and, (3) time series for R&D programme data in Tables 2 and 3 above.

j. Supplementing the pre-existing 125% tax concession for industrial R&D and with effect from 1 July 2001, the Government’s Innovation Statement Backing Australia’s Ability introduced a 175% incremental (Premium) R&D Tax Concession for companies undertaking additional R&D. Note that the TES estimates provide for downwards adjustment of Pay as You Go (PAYG) tax instalments, particularly with respect to the first year in which the premium applies (with an estimate of $40m for 2001-02). Since it is inappropriate to bring forward this component of the TES estimates, the bringing forwards of this series has been adjusted by dividing this first year adjustment for PAYG tax instalments between the subsequent two years to indicate expenditure estimated to occur in those years.

k. Backing Australia’s Ability introduced a tax offset (rebate), with effect from 1 July 2001, that would permit small companies that are in tax loss (and so cannot receive an immediate benefit from the tax concession), to receive a cash payment equivalent to the concession. The offset is available both at the 125% rate and, where eligibility requirements are met, the 175% rate.

l. Established in 1992-93, but operating under substantially modified legislation since 1999, Pooled Development Funds are registered investments companies that provide patient equity capital for small or medium sized firms. The Funds are taxed at concessional rates.

TABLE 5 Commonwealth Support for Science and Innovation by Socio-Economic Objectives through the Budget and Other Measuresa

Cash Outlays ($m) Accrual Expenses ($m)b est actual budget

est

Socio-Economic Objectivesc

1996-97 1997-98

1998-99 1999-00

2000-01 2001-02

2002-03 2003-04

%Total %GDP

Exploration and exploitation of the earth 189.3 158.0 134.2 136.5 153.0 177.5 328.4 356.9 6.6 0.04

Infrastructure and general planning of land used

36.5 34.9 31.9 38.5 37.2 40.8 64.1 85.5 1.6 0.01

Control and care of the environmente 85.5 89.2 93.4 105.3 128.2 135.1 68.3 80.7 1.5 0.01

Protection and improvement of human health

223.2 230.3 249.9 250.1 371.3 360.5 451.3 517.5 9.5 0.06

Production, distribution and rational utilisation of energy

90.9 101.6 78.3 86.1 123.4 134.5 87.4 119.3 2.2 0.01

Agricultural production and technology 279.4 297.4 304.3 307.0 319.3 354.5 358.1 396.4 7.3 0.05

Industrial production and technology 773.3 719.4 804.6 898.8 874.3 1042.3 1201.6 1355.0 25.0 0.17

Social structures and relationships 11.0 9.9 12.4 13.0 15.1 13.3 53.7 58.5 1.1 0.01

Exploration and exploitation of space 0.7 0.2 0.0 0.00

Research financed from general university fundsf

1591.9 1634.0 30.1 0.21

Advancement of knowledge 1742.8 1812.1 1844.3 1890.9 1956.3 2100.2 431.8 460.3 8.5 0.06

Defence 281.2 265.2 257.0 273.9 290.3 340.4 352.3 362.0 6.7 0.05

TOTALg 3712 3718 3810 4000 4268 4699 4989 5426 100 0.68

Notes:

a. Table 5 represents the aggregate data from Table 2, 3 & 4 re-arranged by broad socio-economic objective (SEO) categories in accordance with general OECD practice for Government Budget Appropriations or Outlays on R&D (GBAORD). The categories are consistent with aggregated groups of the Australian Standard Research Classification (1998). The allocation of Budget funds corresponds to the intentions of the funder. Hence, the allocation according to SEO categories may vary from that achieved through the R&D surveys of the Australian Bureau of Statistics. b. The accrual system of accounting was introduced in 1999-00.

c. The Socio-Economic Objective nomenclature reflects the recommendations of the OECD Frascati Manual (6th edition, 2002).

d. This socio-economic objective incorporates the previously separate categories of Transport & telecommunications and Urban & rural planning.

e. The socio-economic objective incorporates the previously separate categories of Prevention of pollution and Identification & treatment of pollution.

f. In line with OECD Frascati Manual (6th edition, 2002), the category Research financed from general university funds, which was previously combined with Advancement of knowledge, has been separated for the 2002-2003 financial year and onwards, creating a break in the series.

g. The totals include the revenue forgone items.