Funding for Australian research and development comes from a variety of sources, such as the Australian Government, the higher education sector, state and territory governments, industry and the private non-profit sector. In 2019-20, $35.6 billion was spent on research and development.
In 2021-22, the Commonwealth invested $11.8 billion in innovation and research. This is a decrease of $184.18 million (or 1.53 per cent) in spending from 2020-21.
Out of the total investment, 31.5 per cent was allocated to the higher education sector through the National Competitive Research Grants and Research Block Grant funding.
Funding through the Research Block Grants supports the training of Higher Degree by Research students (the Research Training Program) and the indirect cost of research (the Research Support Program). Research block grant are allocated each year based on a funding formula.
The Government offers tax offset through the Research and Development Tax Incentive (R&DTI) to businesses conducting eligible activities. In 2021-22, $2.9 billion (24.7 per cent) was spent on R&DTI.
Australia’s R&D effort (Gross Expenditure on R&D) – 1.79 (2019-20) per cent of gross domestic product – lags behind our competitors and is well below the OECD average of 2.68 (2020) per cent.