UNESCO SCIENCE REPORT

Southeast Asia and Oceania
COUNTRY PROFILES
AUSTRALIA
End of commodities boom squeezing S&T
budgets
Australia continues to play a significant role in STI across the
region. Its universities remain a draw for aspiring scientists
and engineers from the region and it counts the highest
absolute number of FTE researchers and technicians, as
well as the highest GERD/GDP ratio (2.25%) and a dynamic
business sector which contributes almost two-thirds of GERD
(Table 27.2). In 2014, Australia accounted for 54% of the
region’s papers in the Web of Science (Figure 27.8).
The national innovation system is not without its weaknesses,
however. As Australia’s Chief Scientist Ian Chubb recently
noted, although Australia ranked 17th out of 143 countries
in the Global Innovation Index in 2014, it ranked 81st as a
converter of raw innovation capability into the output that
business needs, namely new knowledge, better products,
creative industries and growing wealth. In 2013, Australia’s
high-tech exports contributed just 1.7% of the total from
Southeast Asia and Oceania, ahead of only New Zealand,
Cambodia and the Pacific Island states (Figure 27.4). In
contrast to many of the ASEAN countries, Australia is not very
engaged in product assembly in the global electronics value
chain; this illustrates why comparisons of high-tech exports
by countries in the region need to take into account the
position of each economy in global high-tech production and
export.
Research Centre programme announced in 2014, for instance,
has been mandated to explore ways of boosting Australia’s
productivity and national competitiveness.
The coalition government headed by Tony Abbott has
nevertheless introduced changes in the overall direction of STI
policy since coming to power in September 2013. In a context of
reduced government revenue since the end of the commodities
boom, the government’s 2014–2015 budget made severe
cuts to the country’s flagship science institutions. The
Commonwealth Scientific and Industrial Research Organisation
(CSIRO) faces a reduction of AU$ 111 million (3.6%) over four
years and a loss of 400 jobs (9%). The Cooperative Research
Centres programme survives but its funding has been frozen
at current levels and will be reduced further by 2017–2018. In
addition, a number of programmes fostering innovation and
commercialization have been abolished. These include some
long-running initiatives such as Enterprise Connect, the Industry
Innovation Councils and Industry Innovation Precincts. The
current government has replaced these incentive schemes
with five industry-specific growth centres. The creation of
these centres was announced in the government’s 2014–2015
budget. Each is to be endowed with a budget of AU$ 3.5 million
over four years with a focus on:
n Food and agriculture;
n Mining equipment and services;
n Oil, gas and energy reserves;
n Medical technologies and pharmaceuticals; and
n Advanced manufacturing.
Australia’s economic success in recent decades has been
driven largely by the resources boom, primarily in iron ore
and coal. Importantly, this has also driven much of R&D
investment: 22% of business expenditure on R&D in 2011
concerned the mining sector, which also contributed 13.0%
of GERD. The mining sector accounted for 59% of Australian
exports in 2013, nearly two-fifths of which consisted in iron
ore. Since 2011, the global price for iron ore has dropped from
US$ 177 to less than US$ 45 per tonne (July 2015). A major
factor behind the fall has been the reduced demand from
China and India. Although prices are predicted to stabilize
or even rise through 2015, the impact on Australian foreign
earnings from this major export sector has been substantial.
As a consequence, science in Australia has been hit both by
cuts made to R&D expenditure in the mining and minerals
sector and by cuts in public funding for science overall.
A new policy direction
Between 2010 and 2013, the majority of policy reports
focused on innovation. This has not changed with the current
government. The review of the Australian Co-operative
The success of the centres will be measured by businessfocused
metrics such as increased investment, employment,
productivity and sales, reduction in bureaucratic red-tape,
improved industry–research linkages and a greater number of
businesses integrated into international value chains, in line
with the new approach established by the Minister of Industry
and Science, Ian Macfarlane, in 2014.
There has been a decisive shift in the present government’s
approach away from renewable energy and carbon reduction
strategies. The Australian carbon tax introduced by the
previous Labour government has been abolished and,
in the 2014–2015 budget, the government announced
plans to abolish the Australian Renewable Energy Agency
(ARENA) and the Clean Energy Finance Corporation. ARENA
was established in July 2012 to promote the development,
commercialization and dissemination of renewable energy
and enabling technologies; it incorporated the Australian
Centre for Renewable Energy, which had opened in 2009.
However, both ARENA and the Clean Energy Finance
Corporation were established by acts of parliament and,
Chapter 27
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