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Second Reading: Australian Research Council Amendment (Review Response) Bill 2023
I rise to speak on the Australian Research Council Amendment (Review Response) Bill 2023. The bill amends the Australian Research Council Act to make changes to the governance, oversight and budgetary arrangements for the Australian Research Council. These changes follow a review which considered the role and purpose of the Australian Research Council within the university research system. The final report Trusting Australia's ability:review of the Australian Research Council Act 2001 was released in April last year and made 10 recommendations. This bill seeks to implement six of those recommendations.
Firstly, the bill establishes an Australian Research Council Board as the accountable authority rather than the current executive management structure. The proposed board will have the authority to design and set grant guidelines as well as approve a wide range of grant funding decisions, rather than the minister for education, except on security, defence and international relations grounds. This will include grounds for discovery projects, linkage projects and the fellowship programs, which account for around 75 per cent of the Australian Research Council's expenditure. The coalition is concerned that, in removing ministerial discretion over the expenditure of hundreds of millions of dollars of taxpayers' funds on research and outsourcing these decisions to a board, the Albanese government is removing its accountability for such decisions to the parliament and ultimately to the Australian people under our democratic system of responsible government. The minister will retain the ability to approve grants for other designated research programs, including Australian Research Council centres of excellence, industrial transformation training centres and industrial transformation research hubs. Interestingly, these projects on an individual basis tend to be of the highest monetary value, so one needs to ask: if the Labor government believes in outsourcing research project decisions to the board of the Australian Research Council, why were these three research programs—the ARC centres of excellence, the industrial training centres and the industrial transformation research hubs—excluded? Is it, possibly, perhaps because the minister wishes to retain his discretion in relation to the projects that will provide the biggest ribbon-cutting or photo opportunities? The bill will also devolve the appointment process for the chief executive officer to the new board, rather than the appointment being made by the minister. In essence, authority and accountability will largely be shifted from the minister to the new Australian Research Council Board. While the new board arrangements will include First Nations representation and a representative from regional, rural and remote Australia, disappointingly, the provisions do not seek to include people with other relevant skills, such as those who are experts in public administration and governance, or who can advocate for the best use of public moneys.
Additionally, many of the peak bodies in the higher education research sector, such as the Group of Eight and Universities Australia, have raised concerns that the board's composition will be insufficient to allow the board to operate effectively. For example: the Group of Eight had this to say:
… the Bill requiring between three and five members – in addition to the Chair and Deputy Chair – there is a risk that the Board may not be large enough to reflect the diversity of backgrounds and expertise required.
Curtin University had this to say:
The current membership of chair, deputy chair and three to five members, could see a group of five people wield great power in the direction of the ARC and funding for research in Australia.
It's important to note that this is not the first time these concerns have been raised, as there was a formal consultation process in the development of this bill. The Albanese government has ignored the concerns of stakeholders about the composition of the board and, indeed, the bill, refusing even to include the recommended review mechanism in 12 months to assess the board's effectiveness.
A further concern raised by stakeholders in relation to the board is the financial cost. The explanatory memorandum states that the changes, primarily the new board arrangements, will cost $1.5 million, with this cost absorbed from within the Australian Research Council's existing annual budget. Universities Australia has expressed this concern repeatedly on behalf of its members. In its submission to the Senate inquiry into the bill, it said:
… UA urges the Government to ensure adequate funding to allow the ARC to take on the additional responsibilities …
The Group of Eight, in its submission to the same inquiry, said:
The Financial Impact Statement indicates that establishing the ARC Board and restructuring the ARC's governance arrangements will cost approximately $1.5 million per annum. It is proposed that this be met through existing resourcing from within the ARC's current annual departmental budget.
This is not acceptable. It will significantly impact the operation of the ARC given its current budget is already under pressure due to the scale and scope of its mission.
On the surface, an annual cost of 1.5 million for the board may not seem significant but the sector is concerned that this will deplete funding available for research programs. Further, given the remit of the board, there's every possibility that the funding allocation will be insufficient and that the actual cost may exceed the estimated $1.5 million. The government has wilfully ignored the concerns of stakeholders in the development of this bill.
The bill also changes the funding arrangements for the Australian Research Council from a capped special appropriation to an annual appropriation. This change will remove the need to update the capped funding amounts through legislative amendments each year. However, it will also remove the division of funding specified for different research programs. While this reduces the workload of the parliament, it also removes much of the certainty and transparency in the financial allocation to each research program. Most significantly, the bill removes the capacity for ministerial discretion or intervention in relation to grant-funding decisions. The ability for a minister to overturn a
decision made by assessors derives from section 52(4) of the act, which, as presently worded, states that in deciding which proposals to approve:
… the Minister may (but is not required to) rely solely on recommendations made by the ARC …
That's to say, the CEO of the ARC. The government's decision to remove section 52(4) is in response to criticisms made of decisions by coalition ministers to reject recommendations made by the Australian Research Council for some grant decisions. But let's put this in context. Since 2005, just 32 funding decisions have been rejected. In the 2021-22 financial year, for example, there were nearly 600 discovery projects awarded—nearly 600. Just six of the recommendations made by the chief executive were rejected by the minister of the day—merely one per cent—and indeed, in monetary terms, the total value of the projects rejected stood at a mere 0.53 per cent of the total value of the projects recommended for funding.
So that Australians can draw their own conclusions, let me just mention the titles of three of the projects which were rejected by the minister. These were projects which were seeking to have taxpayer funding. 'Spectacles, dress and second-wave feminism in the Philippines'—that was the first. 'Queer Tokyo: a cultural history' was the second. 'Beauty and ugliness as persuasive tools in changing China's gender norms'—that was the third. Those were just three of a relatively small number of projects where the minister of the day exercised the right in the statute to overturn a funding decision.
But let's put this in context in another way. The coalition has always recognised and supported high-quality research. We have always supported researchers to undertake the cutting-edge, innovative research which advances our nation, meets Australia's priorities and supports our economy and our society. Our $2.2 billion investment in the university research commercialisation package was a key example of our support for the sector. We firmly believe that, by investing in research and the commercialisation of ideas from Australia's brilliant minds, we are, in turn, enhancing Australia's economic growth and future.
In this regard, I think it's important that I alert the House to the fact that there is a discrepancy between the very big game talked by the Albanese government, when it comes to its support for research, and its actual performance. At the 2022 election, Labor campaigned on a promise to lift research expenditure to three per cent of GDP. They're now more than halfway through their term of government, and yet this Labor government is yet to deliver a single cent of the investment that was promised. Indeed, on the contrary, this Labor government has demonstrated its contempt for the research sector. In the 2023-24 MYEFO in December, more than $102 million was cut from research, $46.2 million was slashed from Australia's Economic Accelerator program and a further $56.3 million was clawed back by cancelling the Regional Research Collaboration Program.
This, I am sorry to say, is the most rank hypocrisy from this Labor government. They are in here today spruiking their support for the research sector, while the reality is: they're wielding the fiscal axe on research spending. They have
even failed to find the money to support the operation of the board, meaning that the single impact of this bill in relation to research funding is to deliver a cut: a funding cut of $1.5 million—money which was previously going to research and which is now going to support the operations of this board. This bill's focus on structural changes sees it neglecting the importance of fostering a culture of collaboration and communication between the government and the research community. Meaningful reform requires engagement and dialogue, and not just top-down structural alterations.
The powers of the new ARC board and the lack of effective ministerial oversight of its operations should raise significant concerns in the minds of Australians about accountability and transparency in the allocation of public funds. The absence of ministerial oversight will hinder the government's ability to ensure that research projects align with national priorities and advance our nation and our national interest. The coalition will not be supporting this bill.