Why the slippage in deciding CRC funding – by Dr Tony Peacock

When the federal government came to office it promised a timetable for announcing which competing group of businesses and research institutions would be funded to perform R&D under the hugely successful Cooperative Research Centres scheme. Bids cost big dollars to put together, says Dr Tony Peacock, with business now dismayed that the latest deadline for a decision on a CRC funding round has now slipped by a month.

If Australia is to reach 3% of GDP investment into R&D, we will need a sharply boosted level of business investment (BERD). Government investment in R&D (GovERD) can simply not get us there.

The pressure on higher education investment in R&D (HEERD), on which Australia is uniquely reliant, means we are very unlikely to see that sector continue to grow. It’s BERD or bust.

One way of achieving that business boost is better leveraging the government and higher education investments into R&D.

Of course, the primary focus of any R&D strategy should be the outcomes, not the inputs.

But researchers are not magicians. The inputs matter, and we see that through the results of those countries that have committed to R&D investments of 3 or more per cent of their GDP.

Business loves leverage. If they can get co-investment in R&D that will benefit them, they will use that leverage.

It might come through tax concessions or collaborative programs like the Cooperative Research Centres or ARC Linkage programs.

But business also needs certainty.

When there is uncertainty about the R&D tax claims, we see companies backing away or having to pay high-price consultants to navigate complex rules.

When the rules or the timing of R&D programmes are uncertain, businesses back away from those programmes.

Who will put aside serious money to participate in a program if it might be months before decisions are made or announced? Competition is fine but fuzzy timelines are not.

What the Labor government promised

When the ALP came to power two years ago, it was refreshing that new Industry Minister Ed Husic committed his department to a timetable for funding rounds of the Cooperative Research Centres programme.

This might seem like a tiny thing, but it costs the government zero dollars and is like a gift to those participating in the programme.

It’s extraordinary that it took three decades into the programme for a Minister to make such a sensible decision.

So, it’s little wonder that there is real concern in the business R&D community that the 2024 (Round 25) funding round timetable is slipping.

The shortlist was supposed to be announced in June, and the second stage applications open in July for an August deadline.

For those that are not invited to Stage 2, finding out in time to reallocate their resources by the end of the financial year would have been good.

Most bids don’t go through, so having tens of millions of business dollars hanging out there is in no one’s interest.

Hopefully, the slippage is only going to be weeks, not months.

There is still plenty of time for completion of the round in calendar 2024.

The Minister has a higher responsibility to get things right than to strictly adhere to a timetable. Let’s hope for an announcement in the coming days.

Tony Peacock FTSE FAICD is the former CEO of the Cooperative Research Centres Association. He is chairman of Ten Carbon Chemistry and the Australasian Pork Research Institute. He is a director of the Marine Bioproducts CRC and the Solving Antimicrobial Resistance in Agribusiness, Food and Environments CRC. He was the 2014 Monash University Churchill Fellow on university-business relationships in the USA, UK, Germany, and Singapore and is an Adjunct Professor at the University of Canberra.

Picture: Dr Tony Peacock