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Tuesday, 4 December 1973
Page: 4226

Mr WHAN (Eden) (Monaro) - We have before us a Bill, subject to amendment, which acknowledges the facts as we have seen them in Australia in regard to research and development. It is not peculiar to Australia that research and development should be confined to, or at least carried out mainly by, large business enterprises. But it is particularly true in the scene as we see it here. It is also worthwhile, in setting the stage for discussion, to observe that no area of industry and no individual has a monopoly on innovation. In this area it is difficult to identify where such money can most fruitfully be spent.

The Department of Trade and Industry carried out a survey which it published in 1970. The survey was based on 1,321 enterprises which in 1968-69 had an expenditure of $95m on industrial research and development. This was equivalent, at that stage, to one per cent of their total sales. The majority of these enterprises - 75 per cent - were wholly or mainly Australian owned. These Australian owned firms were responsible for only 39 per cent of the total expenditure on research and development. A large share of this expenditure - 70 per cent - was incurred by a very small percentage of the total number of enterprises - about 6 per cent all told. This is the background of the proposals in this Bill.

In his second reading speech the Minister for Secondary Industry (Mr Enderby) observed that most research and development expenditure was in fact carried out by the larger enterprises in Australia. Work done by the Commonwealth Scientific and Industrial Research Organisation suggests that the activities of many of these larger enterprises received some impetus from overseas and that the research and development that was carried out in Australia were complementary to research and development carried out by large firms overseas.

This Bill seeks to relax the professional qualifications in some measure so that smaller firm's and smaller enterprises may share the industrial research and development grants that may be made under this Bill. This is a complete acknowledgement of the fact that innovation occurs at all levels. In many cases the most valuable innovation can occur in a very small enterprise. The development of this innovation in its application to industry is made that much more difficult because the smaller enterprises cannot command resources that will get their ideas quickly into the commercial stream.

In order to show the sum total of the contribution by Australia to research and development, the report of the Department of Science for the period from 20 December 1972 to 30 June 1973 attempts to characterise research and development activity in Australia. Expenditure on research and development in Australia according to that report is 1.13 per cent of the gross national product. I have not been able to analyse these statistics mathematically but a study suggests that Australia, for an industrialised nation, does not rank very highly in its activity in the fields of research and development. If we compare Australia with a country such as the Netherlands, which has a similar population, we find that the Netherlands spends SUS45 per capita on research and development whereas Australia spends only $27 per capita.

One can use various formulas to make comparisons like this. For example, research and development expenditure can be taken as a percentage of gross national product. In those terms, Australia comes eleventh out of the 17 countries that are recorded in the report of the Department of Science. We are on the same level as, for example, Belgium and Norway. The countries which expend a greater proportion of their gross national product than Australia does in this area include Canada, Japan, Sweden and Germany. The United States of America devotes about 2.9 per cent of its gross national product to expenditure on research and development.

Australia, to date, does not really have a very satisfactory record in research and development. I believe that this is due mainly to the fact that we have no systematic professional research organisation devoted to the application of science and research in our economy. (We do need, I feel, to supplement the work done by industry and encouraged by this legislation, a parallel professional group sponsored by Government which is involved in this very important area of developing research.

Again, the report of the Department of Science has given us a breakup of money spent on research and development in Australia. We find that in the year considered by this report, 1968-69, $342m was spent on research and development in Australia. Of this amount, Australian Government instrumentalities spent $139m while $42m was spent by State governments. Business enterprises spent $85m in this area. This is not a very high proportion of the total sum of $342m. Various other contributions make up the difference. So, Australian Government involvement, as high as it is, still in my view is unable to provide the permanent employment situation for the development of technology and the application of science in our economy. The CSIRO is fundamentally orientated in its research work and universities are not really qualified to carry out a continuing program of research and development.

The proposals in this legislation go some way towards solving the problem of identifying innovation. They will lead to a situation, as I have mentioned before, where smaller groups and people with an idea that perhaps they can develop uniquely with the resources available now will have a better chance of being able to come to this Government and expect some assistance in the development of their ideas.. One only has to think of some of the more recent discoveries with respect to engines to realise that these ideas first had their origin - as all ideas do - in the mind of one person. Then, as he developed this idea, he was able perhaps to sell it to other people - this is the life of an idea - and eventually to incorporate the idea into the commercial stream. The fact that many people have a great battle to get through these early stages is a blot on the development of science in Australia. I commend the Bill to the House. I particularly commend the new proposals that have been introduced by this Government.

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