Delivered by Mr Luke Sheehy, Universities Australia Chief Executive Officer

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Good morning and thank you for that warm introduction.

And a big thank you also to the Australian Council of Deans of Science for the invitation to speak today at this important event.

I’d like to acknowledge the traditional owners of the lands on which we meet, the Ngunnawal peoples, and pay my respects to elders past and present.

Indigenous peoples have and always will play a critical role in our society, particularly through their involvement in higher education and research, and that is something we should celebrate.

We should also celebrate, today and every other day, the many wonderful scientists in our universities who are helping shape the Australia of tomorrow through their game-changing discoveries.

This work is so important to our future – a future that Australians are ambitious for.

The Government recognises this with a second-term agenda focused on productivity and economic prosperity.

Science is at the heart of both.

And we’re lucky in Australia to have some of the world’s best and brightest minds pushing boundaries and looking over the horizon, driving our country and the world forward.

Just look at our track record.

Every day, billions of people rely on Australian inventions.

The Cochlear implant.

Cervical cancer vaccine.

The black box flight recorder.

Penicillin.

Printable solar cell technology.

These are all Australian inventions that have revolutionised the world.

And in a changing global environment, we need more of them.

That’s what the recent Universities Accord report told us.

We need more research and innovation to succeed in a new world order.

Without it, we’ll fall behind our global peers.

Yet, research continues to sit on the government’s periphery rather than on its priority list, stifling the progress that our best and brightest could make for and on behalf of our nation.

The Government’s recent focus on productivity is an important reminder of how critical innovation is to our future prosperity.

Innovation that is underpinned by the fundamental, curiosity-driven research Australian scientists undertake.

We can and should improve productivity and prosperity by taking roadblocks out of the way, but true step change is driven by innovation.

A 13-year decline in investment in R&D has created a “national emergency”.

That’s the view of Robyn Denholm, who’s leading the government’s strategic review of the R&D system.

I will come back to this.

If Australia is to achieve its future ambitions, we need to support Australian scientists to undertake the life-changing research they pursue every day.

We also need to get policy and funding settings right, so they spend less time navigating what is an unnecessarily complex system.

Over the past year, Universities Australia has focused on how Australian can simplify the system and support Australian innovation.

We’ve released a series of reports on this, and I encourage you to visit our website and see them for yourself if you haven’t already.

I know they’ll probably tell this group what it already knows…

And that’s that right now, Australia’s research system is not working as well as it should — and it is holding us back.

Australia needs to be able to stand on its own two feet when it comes to research.

We need to be able to turn our ideas into discoveries, products and solutions that make our communities, industries and national security stronger.

But before we get to products and solutions, we need to invest in ideas and discoveries – the fundamental research that underpins commercialisation and innovation.

Universities do a lot of this – more than others.

Yet, the proportion of funding for fundamental research has fallen from nearly 60 per cent in 1996 to just 35 per cent in 2022.

Without addressing the start of the pipeline, we will miss the next Wi-Fi or penicillin.

We simply can’t afford to take that risk.

In areas like AI, we are seeing a real need to develop sovereign capability, capability that requires meaningful investment by government in bold, blue-sky ideas

Universities Australia has called for government to lift investment in R&D from 0.49 per cent of GDP to the OECD average 0.74 per cent.

This is just a starting point but would make a real difference to our research.

And it would get us that little bit closer to reaching the government’s own target of investing three per cent of GDP in research.

Other countries are doing it and they’re reaping the benefits.

Germany and the United States, for example, both spend more than three per cent of GDP on R&D, and both are vastly more productive than Australia.

In the absence of adequate funding, universities are having to fill the shortfall.

In 2022, Australian universities spent nearly $14 billion on R&D — a 10 per cent increase since 2020.

More than half of this ($7.2 billion) was funded by universities themselves.

Universities have relied on international student revenue to fund more than half of the research they undertake.

Recently, our sector has been criticised for its reliance on international students.

But this is not of our own making.

It’s come in the face of declining investment from government.

Circumstances beyond our control, and certainly not of our choosing.

But research is important – as a sector we understand that.

We understand the contribution it makes to our nation, and why we can’t just stop the work.

That’s not in our country’s interest.

Another important aspect that often gets forgotten in this conversation is infrastructure funding.

Without it, the laboratories, facilities and equipment we need to conduct world-class research deteriorate.

In the lead up to the last federal election, I called for the government to reinstate the Education Investment Fund.

This fund was designed to support long-term funding of critical infrastructure on university campuses before it was closed in 2019, stripping our sector of almost $4 billion in financial support.

Now, there is no dedicated government funding for campus infrastructure.

UA has advocated for the government to provide at least 50 cents for each dollar of direct funding to support the indirect cost of research, including things like infrastructure.

We believe this is a reasonable ask and would make a real difference.

We also need to ensure we have a workforce to underpin our research system and drive new ideas and discoveries.

Without them, we risk damaging Australia’s productivity, sovereign capability and global competitiveness.

A PhD is the highest academic qualification and is earned by some of the most talented people in the country.

We need PhD candidates to generate new knowledge, develop innovative solutions to complex challenges and turn big ideas into products, services and treatments that improve lives.

Concerningly, Australia is heading toward a sharp decline in its PhD-qualified science workforce.

Domestic PhD enrolments dropped 18 per cent from 2016 to 2024, returning to levels not seen since the early 2000s.

At the same time, there is a huge pool of potential PhD candidates due to a 195 per cent increase in Honours completions since 2003.

But we aren’t capitalising on this.

In 2017, 37 per cent of Honours students went on the do a PhD.

In 2024, that number was just 16 per cent.

This collapse in higher degree commencement is quite concerning.

And it gets worse.

Universities Australia is projecting a 28 per cent fall in PhD completions by 2030.

This trend can be attributed to a few things.

A strong job market, inadequate financial support and insecure employment prospects in academia are among the reasons.

Cost-of-living pressures, coupled with a stipend barely above the poverty line, are significant obstacles for potential candidates, particularly those with dependents or prior financial commitments.

Universities Australia has called for the PhD stipend to be raised to $36,000.

This is the bare minimum that we should expect for some of our brightest minds and comes at a very modest cost to government.

We also need to look to international PhD students to bolster Australia’s scientific workforce.

International PhD candidates are essential to Australian research and development, addressing critical shortages in fields such as engineering and information technology.

However, the 10 per cent cap on international PhD candidates within the Research Training Program limits the potential for more international students.

Raising the funding cap from 10 per cent to 20 per cent, especially for regions with critical workforce needs, is a much-needed change at no additional cost.

We only stand to gain from this change.

I want to take a moment to focus on how university research changes lives, and a cautionary tale for fostering innovation in Australia.

Earlier this year, a company spun out from the University of Queensland sold for over a billion dollars.

This is the largest deal involving a company commercialising university IP in Australian history.

The company, Vicebio, was licensed by UQ to progress this molecular clamp technology towards clinical trials and commercialisation.

This same technology was crucial in UQ’s efforts to develop a potential COVID-19 vaccine in 2020.

Despite global prominence and clear commercialisation potential, the technology was rejected by venture capital and investors in Australia but welcomed in Europe by Sanofi.

Australian university research is at a global high standard, this is clear from Vicebio, and the thousands of other research efforts undertaken every year by Australia’s scientists.

What’s missing is a policy environment conducive to research and innovation, policies that support ambition and allow us to best contribute national and global prosperity.

As I’m sure you’ll be aware, UA has been using the government’s current strategic examination of R&D to prosecute the case for greater investment in and support of university research.

This review is looking at resolving some of the fragmentation of the current system, and seeking to boost future job creation, productivity and prosperity.

We aren’t alone in our concern that research funding – from both business and government – is far too low.

Universities Australia has proposed several low-cost options that will move things in the right direction.

We can start by consolidating the 150 federal research programs down to a couple of dozen and have the overall research strategy of the Commonwealth overseen by a research and innovation council made up of government, industry, universities and research bodies.

We can then take the administrative savings from doing this and combine it with the annual unspent portion of the Medical Research Future Funds to increase the block grant.

Let’s also encourage private sector partnerships with a 20 per cent collaboration premium in tax relief for such research.

This has been recommended now by an alliance of almost 30 groups led by the Business Council of Australia and supported by Universities Australia.

Lastly, innovation precincts bring together universities, other research institutions, major public institutions like hospitals and innovative industries which are all engaged in specific research priorities.

Let’s look at incentives for co-location and support greater collaboration between universities, business and government.

Monash’s Technology Precinct and Sydney’s Tech Central Innovation Hub are great examples of this in action.

As are the Trailblazers, which provides $370.3m over four years to directly support commercialisation and industry engagement.

We need the strategic examination to be a meaningful and impactful exercise, and we look forward to the final report in the coming months.

It would be remiss of me not to mention Horizon Europe – the EU’s mega fund for research and innovation.

Horizon Europe is a transformational opportunity, with a budget of almost $170 billion.

An increasing number of non-European nations have already joined up, yet Australia is yet to follow suit.

This is a missed opportunity.

We have welcomed the news that our government has restarted exploratory talks to join the program and encourage swift progress to a formal commitment.

The government has our full support through this process.

Access to this game-changing initiative would supercharge Australian research, unleashing a cycle of innovation through deeper partnerships and supporting our economic development and success.

It’s a modest investment in not only expanding and accelerating our country’s research capacity but would also deepen ties with like-minded liberal democracies.

Every $1 invested in R&D returns over $3 to the economy.

Multilateral initiatives like Horizon Europe could boost this to $11 per dollar by 2045.

This is a return on investment that we should not ignore.

Collaboration is also important.

When Australian researchers collaborate with other academics our research is 54 per cent more impactful than the global average.

Horizon Europe provides another opportunity to generate impact through cutting edge research and cultural exchange.

It also positions Australia to generate impact, supporting more ideas and discoveries to become the products and solutions of tomorrow.

We need a seat at the table, and quickly.

These are just some of the ways UA is advocating for greater support of and investment in university research.

We’ll continue to do this on your behalf in pursuit of a research system that works for our sector and the nation.

Thank you, and happy to take questions.

ENDS