While the Bill and Explanatory Memorandum largely address and clarify UA’s concerns as expressed to the Department of Education on 6 November (see Attachment A), there remains the opportunity to strengthen the Bill to ensure a strong, properly resourced and future proof Australian Research Council.
Funding for a strong ARC
In order to implement the measures contained in the Bill, the Explanatory Memorandum identifies a direct financial impact of approximately $0.6m per annum plus an additional $0.9m per annum in indirect support costs. These costs are to be absorbed from within ARC’s current annual departmental budget.
This is before considering the expansion of the ARC’s legislated role and purpose to include support for the research community through fostering academic pathways, expanding Indigenous knowledge systems and supporting research integrity.
Government investment in research and development is already at its lowest ever level. If Australia wants to remain a competitive, forward-looking and safe nation with a high and sustainable standard of living, we must continue to invest in our researchers and the vital work they do to drive productivity and deliver better outcomes for all Australians. This should start with appropriate funding for core institutions like the ARC to ensure they are able to attract and retain the staff they need to discharge their responsibilities to a world-class standard.
With these reforms to the ARC, Australia’s research environment is at a pivotal point, and it is vital that we get it right. As such, UA urges the Government to ensure adequate funding to allow the ARC to take on the additional responsibilities – at a minimum this should include assurances that there will be no further reduction in program funding.
Noting that the Review called for a shift from Special Appropriations to Annual Appropriations – which the current Bill would deliver – it unfortunately does not include an indexation formula which is also a called for under Recommendation 9. This omission appears contrary to the Australian Government response to the Review which indicated that:
“Amendments to the ARC Act will be introduced to replace the current Special Appropriation arrangements with a more durable arrangement for managing the allocation of Administered funding, including an agreed formula for indexation.”
The Explanatory Memorandum does indicate that annual indexation will be applied (based on some variation of the Consumer Price Index) and with a ‘floor’ to guard against CPI fluctuations below zero. However, UA does not consider this a strong enough assurance and recommends the Government include a specific, simple indexation formula in the ARC Act itself.
An existing example to consider is the SRS Indexation Factor found at section 11A of the Australian Education Act 2013 which enshrines a minimum of 3 per cent growth while deferring to a specific calculation based on clearly defined indices should that calculation produce an indexation factor greater than 3 per cent.1
The sector would welcome the certainty of a legislated indexation factor – one with an indexation floor which is not simply a protection against negative indexation, but a guarantee of at least some nominal funding growth.
Size and composition of the Board
UA welcomes the establishment of a Board which includes Indigenous and regional representation and where the majority of the members have substantial experience or expertise in one or more fields of research or management of research.
We are concerned that with such a small Board it may be difficult to meet these and other equity aims (for example gender balance, cultural heritage and academic discipline) and urge consideration of a larger Board which may also reduce the need for the continuation of the ARC Advisory Committee.
Funding Rules and Grant Approval
UA welcomes the clarity the Bill provides around the preparation of Funding Rules and that the Board will be responsible for approving NCGP grants. We do however remain concerned around the security of grant approval arrangements into the future.
The Bill’s definition of designated research program lists three existing initiatives for which the Minister would retain decision making power – as noted previously, UA is broadly comfortable with this. Our concern arises from the last part of the definition2 which would appear to allow any future Minister to resume control of funding decisions of any other existing (or future) programs by the simple act of making a legislative instrument.
The Explanatory Memorandum does provide some clarity around the apparent intent, noting:
“The Minister will approve grants of financial assistance for designated research programs to recognise the role of such programs in creating research capability rather than programs that award individual research grants.”
UA accepts this rationale but notes that this is nowhere in the Bill itself and therefore recommends that the legislated definition of designated research program be altered to include the differentiation between programs focused on research capability and those designed to provide individual research grants – with the latter clearly excluded from the possibility of being extricated from Board based decision making.
Additionally, while we acknowledge and accept the Minister retaining the power to block funding on national security grounds, we ask that this include adequate consultation with impacted universities and note that all of our members have significant safeguards in place with regard to international research engagement which mitigate the need for a Minister to exercise this power.
UA reiterates that this is a strong Bill overall which, with the relatively simple changes as outlined above, will fully deliver on the Review recommendations in full and in good faith. We look forward to the committee’s report and to the passage of an appropriately revised Bill. We also look forward to working with the ARC to support their efforts with respect to their new areas of legislated responsibility, in particular with respect to determining appropriate research integrity policy and governance arrangements.