The federal government is plowing ahead with its plan to cap the amount of money the Medical Research Future Fund dishes out each year, with the Opposition slamming the proposal as threatening to “undermine medical research”.
The bill, debated in the lower house on Monday, would cap the amount that can be withdrawn from the Medical Research Future Fund (MRFF) at $650 million annually from 2022-23, with this to be reviewed every five years.
This would mark a reduction in spending by the MRFF annually, with $1.2 billion withdrawn from it in the 2020-21 financial year. The amendments would take away the ability to set a maximum annual distribution from the Future Fund Board, and hand this to the Health minister.
If passed, the MRFF will also shift its investment mandate to go after a higher average annual benchmark rate of return over the long term, increasing risk in the short term.
The changes will “streamline” the MRFF and provide certainty in the long term, the government said.
“Now that the MRFF has been fully capitalised, the methodology for calculating the maximum annual disbursement from the MRFF will be simplified by specifying a fixed maximum disbursement amount of $650 million per year from 2022-23,” the legislation said.
“This amendment will assist in the orderly planning and administration of medical research grants programs. It will also isolate the determination of disbursements from financial market fluctuations, while supporting the perpetual funding objective of the MRFF and better aligning the benchmark rate of return for MRFF with the cost of health-related services.”
Labor is expected to use the Senate inquiry process to further examine the changes to the MRFF and whether they will support them.
Shadow industry minister Ed Husic criticised these planned changes, saying they amount to a broken promise from the Coalition.
“This is another broken promise to add to the tally that the Morrison-Joyce Government have racked up over eight years. And it couldn’t come at a worse time,” Mr Husic told InnovationAus.
“In the aftermath of the pandemic and with a steady contraction in research and development investment under the Coalition’s watch, it’s staggering that they’re seriously proposing more cuts to medical funding.”
The government bill would also make state and territory governments eligible for funding from the MRFF, and to allow for grants to be paid in installments.
The MRFF aims to support Australian health and medical research, and had a value of $21.4 billion as of the end of March this year. The fund has been credited with $20 billion since its inception, with no more planned government credits left.
Under the changes, the fund will be tasked with pursuing a greater return for the Commonwealth.
“This will align the MRFF’s investment mandate with other risk-seeking investment funds, creating operational efficiencies for the Future Fund Board, and be consistent with the objective of protecting the capital of the MRFF into the future,” the legislation said.
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