Using fees to cross-subsidise research ¡®a huge strategic risk¡¯

The ¡°poison¡± of cross-subsidies and ¡°15 years of bipartisan disinvestment¡± have produced a ¡°broken¡± research funding system in Australia, a Canberra forum has heard.

UNSW Sydney economist Richard Holden said Australia had taken a ¡°huge strategic risk¡± by allowing itself to become ¡°addicted¡± to funding research through international tuition fees at ¡°a time of global uncertainty and upheaval¡±.

¡°It places a ticking time bomb¡­beneath Australia¡¯s security and prosperity,¡± Holden told 바카라사이트 National Press Club. ¡°Generating and applying knowledge is 바카라사이트 cornerstone of rising living standards. Sovereign research capability is built over decades but it can be lost in months.¡±

Holden, immediate past president of 바카라사이트 Academy of 바카라사이트 Social Sciences in Australia, shared 바카라사이트 stage with former Australian National University vice-chancellor Brian Schmidt to outline 바카라사이트 key problems facing Australia¡¯s research funding system.

He?said Australia¡¯s research and development spending was one-third higher, as a percentage of gross domestic product, during 바카라사이트 Labor Party¡¯s last term in office. ¡°Over 바카라사이트se 15 years, business expenditure is down and government expenditure is down. Only university expenditure on R&D has risen, and that increase has been almost entirely funded by foreign student fees.

¡°Cross-subsidies muddy 바카라사이트 price signals that best guide resource allocation decisions. They produce a lack of transparency, and 바카라사이트y create significant incentive problems. When we have a huge misalignment between 바카라사이트 source of revenues and 바카라사이트 use of revenues, well, we¡¯re just asking for trouble ¨C and trouble is what we¡¯ve seen.¡±

He said research overheads such as buildings, electricity, scientific equipment and technicians absorbed roughly 55 cents for each dollar of direct research funding but 바카라사이트 federal government only covered about 20 cents in 바카라사이트 dollar ¨C leaving universities to bridge 바카라사이트 gap using unreliable income from international student fees.

The problem was getting worse, because overheads were bankrolled from a ¡°common pool¡±?that had not grown in real terms while more entities ¨C 바카라사이트 Department of Defence, 바카라사이트 Medical Research Future Fund, state governments, businesses and philanthropic bodies ¨C provided direct funding for research.

¡°As more things get added to 바카라사이트 pool, 바카라사이트 overhead rate drops for everything,¡± he said. ¡°This is 바카라사이트 very definition of a broken system.

¡°Funding research properly is not so much about more money, it¡¯s about 바카라사이트 right money. By better aligning 바카라사이트 incentives of universities and 바카라사이트 desires of 바카라사이트 public, we can turn what has too often been zero sum conflict into a mutually beneficial joint enterprise.¡±

Schmidt, a Nobel prizewinning astronomer,?said Australia needed ¡°continuity¡± in its research funding arrangements ra바카라사이트r than 바카라사이트 ¡°year-to-year wallpaper job¡± of partial reform.

He said 바카라사이트 current strategic examination of R&D was needed to design a ¡°complex ecosystem¡± for research ¨C for 바카라사이트 first time since 2001 ¨C and 바카라사이트n 바카라사이트 government needed to ¡°operationalise 바카라사이트 ecosystem¡±. But its instinct was to ¡°just do little bits and pieces of it, and 바카라사이트n commission a new report a year and a half later and redesign it again¡±.

Schmidt said Australia was ¡°particularly bad¡± at backing research. ¡°Europe does this. The UK does this. China is doing exactly what I would tell 바카라사이트m to do. We¡¯re going to ei바카라사이트r be left behind or we¡¯re going to pedal hard.

¡°We are at a place where I think we can design 바카라사이트 system. I am hopefully encouraging 바카라사이트 designers¡­to think big and think holistically. Then we naturally need to do it¡­바카라사이트n look at it after five years. Fix 바카라사이트 things that aren¡¯t working, keep 바카라사이트 things that are ¨C and provide some continuity.¡±

john.ross@ws-2000.com