March 26, 2025
The election eve Federal budget is a missed opportunity by the Albanese Government to back in the role of Australian universities in addressing cost of living pressures, boosting productivity and building sovereign capability.
The Group of Eight (Go8) which undertakes 22 percent of the national research effort says the 2025-26 Budget ignores the critical role research and development (R&D) and universities must play in Australia's future prosperity at its peril, effectively bypassing one of our greatest national assets.
"In whatever sector of the economy the Government is prioritising, it is our research and innovation and our graduates who are critical to the nation fulfilling its economic and social potential," said Group of Eight Chief Executive, Vicki Thomson.
"An increased defence spend must be supported by a workforce and R&D. Investment in health must be underpinned by medical research. A Future Made in Australia must be backed in by investment in R&D to deliver that sovereign capability together with Australian industry.
"Australia is not fulfilling its economic potential and if the Government is serious about addressing cost of living pressures and growing the supply side of the economy, including housing, it should focus on lifting innovation and productivity.
"Greater investment in R&D is key to this and must be a national priority. It's time for both the Government and Opposition to look beyond the next election to Australia's long term economic prosperity and security.
"At the least, the Government should have made a genuine commitment in the 2025-26 Budget to boosting Australia's innovation and productivity by adopting a 10-year target for Australia's investment in R&D to reach 3 per cent of GDP. Instead of real commitments, we have 'aspirations' ''.
Australia lags the OECD average in terms of R&D intensity at around 1.7 per cent of GDP. The OECD average is around 2.7 per cent of GDP, a full 1 percentage point higher and the gap is widening.
Investment in R&D by business and government has been in decline and universities - in particular research-intensive universities - have picked up the slack. Expenditure by the higher education sector on R&D has steadily increased from 0.40 per cent of GDP in 2000, to 0.55 per cent of GDP.
"But there's a limit to how much our universities can contribute to R&D, given our reliance on international student fee revenue to fund research," said Ms Thomson.
"We are also seeing a race to the bottom on migration from both sides of politics. This is despite the fact that recent immigration-driven population growth has saved the nation from recession. Spending by international students has been invaluable in avoiding a recession and accounted for more than half Australia's economic growth in 2023. Policies to limit international students will not alleviate cost of living pressures or the housing crisis but instead put a handbrake on economic growth."
"We need a fit for the 21st century national research and industry strategy that includes bipartisan, long-term support for basic (fundamental) research in Australia, provides full economic cost support for government research grants to universities, and addresses the university sector's reliance on international student fee revenue to fully fund research."
Group of Eight universities are responsible for 70 per cent of the research conducted by Australian universities and contribute over 20 per cent of the nation's total R&D investment.
