Australia Yearbook - 2001

Chapter 25—Science and innovation 875
Science and innovation in the
1980s
The quarter century before 1980 saw a very large
increase in public funded research in Australia,
buttheR&Dperformance of the private sector
was disappointing. Secondary industry was
protected by tariffs, much of the technology for
manufacturing was imported and the Australian
currency was fixed. The optimism after the war
that successful outcomes of research in CSIRO
and the universities would flow to the private
sector and be developed for the nation’s benefit
was not realised. This led to a shift in government
thinking and a number of initiatives were
introduced to stimulate the level of R&D in
existing industry and encourage new ventures.
These included the 150% tax deduction for R&D
and the Grants for Industrial R&D (GIRD). The
latter were of particular value for companies
which were not yet profitable and therefore
unable to benefit from the tax concession. The
R&D tax concession was reduced to 125% in 1996
and the GIRD scheme was replaced by an R&D
Start Program. Innovation in Australia suffered
from a shortage of venture capital for R&D and
start-up companies. Initiatives from the
Government to stimulate the flow of venture
capital from the private sector for R&D were by
way of tax advantages for Management
Investment Companies and Syndicated R&D.
Both schemes were abandoned after several
years, but an Innovation Investment Fund was set
up by the Government in 1997 to assist small,
technology-based companies. Most State
Governments provided infrastructure for science
and technology parks, for technology incubation
centres and for promoting the commercialisation
of research.
Budgetary constraints in the 1980s meant that
CSIRO needed to operate for the first time in
thirty years under zero or slightly negative
growth. New areas or directions of research,
which often required different skills, were
supported at the expense of existing activities.
Towards the end of the 1980s CSIRO initiated a
study to improve the methodology of priority
setting. Priority setting by CSIRO now includes
the assessment of the attractiveness of programs
in terms of potential benefits to Australia and the
ability to capture the benefits, and the feasibility
in terms of R&D potential and the availability of
the R&D expertise. In order to improve the
interaction of CSIRO with commercial and other
customers the Government decided that CSIRO
should obtain a greater proportion of its funds
from sources other than by direct
parliamentary appropriation. The
organisation was required to work to a target
of 30% of funds from non-appropriation
sources. The Australian Institute of Marine
Science and the Australian Nuclear Science
and Technology Organisation also were given
targets for funds from non-appropriation
sources.
The 1980s saw a more pluralistic approach to
Commonwealth government funding of
research, with Departments such as
Environment providing substantial funds for
contract research to universities and research
agencies in areas of priority to the
Department. The funding of rural R&D was
reorganised by the Commonwealth
Government in 1989 through a number of
rural industries R&D corporations and
councils. Each corporation or council is
funded through a statutory levy on output at
the farm gate and matched by the
Government up to 0.5% of the gross value of
production. The corporations and councils
support R&D by contracting out to
universities, CSIRO, State government
departments and agencies, and others.
In 1989 the Prime Minister created the
position of Chief Scientist to be located
within the Department of Prime Minister and
Cabinet, and a Prime Minister’s Science
Council with himself as Chair and with
Ministers from portfolios with a significant
science component. The Council included
the Chief Executive of CSIRO, the Chairs of
ASTEC and the Australian Research Council
and representatives from business. The Chief
Scientist was the Executive Officer of the
Council and responsible for the agenda
papers and follow-up of decisions and
matters discussed by Council. The main
purpose of the Council, which held its first
meeting in 1989, was as an information
forum for the Prime Minister and the other
Ministers and to involve them in discussion
of emerging science topics. It was replaced in
1997 by a new Prime Minister’s Science,
Engineering and Innovation Council and the
abolition of ASTEC.
A revolutionary change in arrangements for
higher education occurred in 1989 when the
Government supported the proposal by the
Minister of Employment, Education and
Training, John Dawkins, to abolish the binary