James Riley
December 3, 2018

Funding spotlight on Growth Centres

Policy

Funding spotlight on Growth Centres

Kim Carr: Putting Industry Growth Centre funding under a spotlight

The future of the government’s signature Industry Growth Centres program is under a growing cloud with Labor industry spokesman Kim Carr openly questioning whether the public is getting value for money from its $120 million investment in the program.

Just as the Industry Growth Centres prepare to put on an annual showcase at Parliament House on Tuesday, Senator Carr says the performance of the growth centres has patchy at best, and has not been the collaboration catalyst that had been anticipated when the program was launched.

“You do have to really ask yourself, ‘what has actually been achieved by this program?’. It goes to the fundamental question, what is the role of the growth centres,” he said.

“The feedback I am getting – from manufacturing firms across a variety of sectors in particular – are saying the Growth Centres’ attitude is dismissive and arrogant, and that they are not working collaboratively.

“You would have to say that at best the performance is uneven. No-one has said the Growth Centres are doing out outstanding job.”

The Industry Growth Centre program were created through repurposed funding when the Coalition were elected in 2013. Funding for all except the cyber security growth centre (AustCyber) which was set up later in 2016 is drawing to a close, and there is speculation the program would be wound up.

Originally each of the non-for-profit growth centres was supposed to become self-funding through membership fees and member services after its initial four-year funding period came to a close.

It is understood the Department Industry is currently conducting its own review of the Growth Centres program. It is not clear when this review is expected to be completed, or whether the review document would be made public.

Senator Carr said the Industry Growth Centre program had drawn attention away from the Cooperative Research Centre program, and that public-private research collaboration had suffered as a result.

Meanwhile, Senator Carr has elaborated on his desire to put in place a ‘collaboration premium’ rate within the R&D tax incentive scheme as the best way to encourage greater private sector investment in collaborative research between the public and private sectors.

The collaboration premium would specifically aim to lift Australia’s BERD (business expenditure on R&D) as a primary means to lift the overall public and private R&D investment from 1.9 per cent of GDP to 3 per cent of GDP by 2030.

“[The R&D scheme was] the most effective mechanism with which we can change the culture of collaborative engagement between the research agencies and the private sector,” Senator Carr told InnovationAus.com.

The 3 per cent target for R&D in Australia was “not particularly ambitious by international standards, but by Australian standards is very ambitious indeed.”

Australia’s total investment in R&D of 1.9 per cent of GDP compares to front-runners like Israel and Korea, which invest 4.3 per cent and 4.2 per cent respectively.

Private sector investment in R&D had fallen 12 per cent in recent years, “and to reverse that decline the question of a premium rate [within the R&D tax incentive] becomes critical,” Senator Carr said. His preferred model is that a premium resides in investments in research collaboration projects.

“There is no doubt that the taxation system is a very important instrument. The R&D tax incentive is the single most significant tool in the innovation toolbox. It is bigger than any other piece of [R&D} funding, with nearly $3 billion in forgone revenue,” he said.

“The sheer size of the R&D incentive makes it very important: The question is how do we make it more effective.”

Encouraging greater research collaboration between the public and private sectors had been a vexing issue over a long period, Senator Carr said, and had to be addressed through a variety of programs.

A balance needed to be found between public and private endeavours that provided a level of business certainty and funding certainty to both.

“We don’t want to turn our universities into giant consulting firms – they have another function; to create new knowledge.

“We have to protect the relationship between pure and applied research, and we have to protect the relationship between commercialisation and research integrity.”

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