Australia Announces $2.9 B Innovation Package

Imagine President Bush using his entire State of the Union Address to present a $23 billion five-year strategy to encourage research, innovation, and entrepreneurship in the country. While it has not received much press in the United States, the equivalent happened when Australian Prime Minister John Howard gave his annual Federation Address on January 29.



Backing Australia’s Ability: An Innovation Action Plan for the Future is the Howard government’s comprehensive strategy to strengthen the Commonwealth’s position in the global economy. The five-year price tag to the government for the new initiatives is 2.9 billion Australian dollars (US equivalent is $1.56 billion). An additional $6 billion ($3.23 billion US equivalent) in private investment is expected to be generated from the plan. In 2000-01, the country of only 19.3 million people spent $4.5 billion ($2.43 billion U.S. equivalent) on research and innovation programs.



For comparison, the $2.9 billion increase is the equivalent in US dollars of committing $81 per person in new funding for tech-based economic development initiatives over the five-year period. Highlights of the Innovation Action Plan (all figures in Australian dollars) include:



Industrial R&D and Innovation Programs

• $535 million in new funding for the R&D Start Program, which provides grants and loans to businesses for R&D and innovation commercialization. The program will already receive $419 million during the period.
• $227 million in new funding to the Cooperative Research Centres, bringing the total five-year budget to the program to $947 million. The centres support industry-university collaborative research projects and technical training programs for small and medium-sized enterprises.
• $100 million to accelerate the commercialization and adoption of new technologies through competitive grants (to encourage international investment in the country), technology transfer programs, demonstration projects, and B2B and e-commerce solutions.
• $78.7 million in government funding for privately managed pre-seed funds to support the commercialization of technologies coming from university and public sector research agencies.
• A $40 million Biotechnology Innovation Fund provides preseed money for biotech research.
• An additional $75 million to expand the Commercialising Emerging Technologies (COMET) Program, which provides grants to support business development, entrepreneurship, mentoring and commercialization assistance for small businesses and create the National Innovation Awareness Strategy to provide grants and awards to support business-led initiatives to raise interest in science and technology.
• $21.7 million for the New Industries Development Program to support the development and commercialization of innovation in agribusinesses.

University R&D and Innovation Programs

• $736 million to double funding by 2005-06 for national competitive research grants administered by the Australian Research Council to support university research in enabling sciences such as math, chemistry and physics. In addition to doubling the funds available for basic and collaborative applied research projects, the monies will support several anti-“brain drain” initiatives including fellowships, postdoctoral positions, and researcher salary increases.
• An increase of $583 million to support project-specific research infrastructure and system research infrastructure grants to universities.
• $176 million to support two World Class Centres of Excellence for research and commercialization of biotechnology ($46.5 million) and information and communications technology ($129.5 million).
• $151 million to support enrollment of 2,000 new undergraduate students in information technology, math and science.

Tax Credits, Rebates and Modifications

Streamlining and increasing tax concessions and rebates for businesses’ R&D expenditures ($818 million forgone revenue cost to national government):

• a 125 percent tax concession for R&D expenses
• a 175 percent R&D tax concession premium for additional R&D expenditures
• a R&D tax rebate for small businesses of 37.5 percent of eligible R&D expenditures

The plan, Prime Minister Howard’s speech, and additional background materials on each initiative are available at http://www.innovation.gov.au/iap/