Download Cooperative Research Centres Association - 2016

2016 – 2017 Pre-budget submission
February 2016
The Cooperative Research Centres Association represents all Australian Cooperative Research
Centres (CRCs). In addition, the Association has universities, companies and research groups as
Affiliate and Associate Members.
Cooperative Research Centres Assocations 2016 – 2017 Pre-budget Sumission
Febuary 2016
For futher inquires contact:
Dr. Tony Peacock
Chief Executive Officer
CRC Association
1/10 Bourke Street BARTON ACT 2600
02 6273 0624
www.crca.asn.au
This work (Cooperative Research Centres Association 2016 - 2017 Pre-budget Submission, by A.J. Peacock) is
free of known copyright restrictions.
Executive Summary
The Australian Government has committed to putting science at the heart of industry policy. The
National Industry and Science Agenda sets out a roadmap for this ambition.
The Cooperative Research Centres Programme is a significant part of achieving the Governments’
ambitious innovation agenda. Successive reviews and studies have demonstrated the impact of the
CRC Programme, including its positive impact on Australia’s Gross Domestic Product.
The most recent review, the Miles Review (2015), recommended expansion of the CRC Programme to
include CRC-Projects (CRC-Ps). The Government accepted this recommendation and the first funding
round has commenced. Unfortunately, the total budget of the CRC Programme has dropped
significantly. Just at the time Government, industry and academia agree that collaborative research is
vital to building Australia’s future, less resources are available to the key programme aimed at doing
so.
The 2016-17 Budget should contain a boost in the CRC Programme Budget of $50 million over the
forward estimates in order to at least partially meet the demand created by the Governments’
expansion of the programme.
Cooperative Research Centres Association 2016 – 2017 Pre- Budget Submission
Page 1
Background
The Cooperative Research Centre programme commenced in 1991. The most recent review of the
programme was finalised in 2015 and, like the many previous reviews and studies, showed the
programme is highly successful.
The Government accepted all 18 of the Miles Review recommendations, which include expanding the
programme to include CRC-Projects. Minister Pyne has recently announced the first CRC-P funding
round.
In this submission, the CRC Association argues that the 2016 expansion of the CRC Programme,
Australia’s desperate need for greater industry-research collaboration and a decade-long budget
decline warrants a $50 million increase in the CRC Programmes’ budget over the forward estimates.
CRCs work for Australia
The CRC Programme is undoubtedly the most reviewed, most studied innovation programme in
Australia. Virtually all advanced countries have put in place similar programmes aimed at stimulating
long-term collaboration between industry and academia. The Australian CRC Programme compares
very well and is highly regarded internationally. Some important achievements of the CRC Programme
include:

An extremely high leverage rate on Commonwealth dollars. CRC Programme funds represent
only 22 per cent of the total
resources controlled by the current
36 CRCs.
This is extremely high compared
with similar international
programmes or other Australian
programmes and demonstrates
participant confidence in CRCs.

Australia’s GDP is boosted by the CRC Programme. Successive studies (Allen Consulting
Group 2005, 2012) have demonstrated that the CRC Programme has positive impact on GDP,
including taking into consideration the counterfactual cases. This demonstrates that the
design of the CRC Programme is leading to the desired outcomes for Australia.

Industry knows and supports CRCs. The history of collaborative research programmes
worldwide shows that consistent Government policy is a vital success factor. Industry takes
times to get to know programmes and become confident in investing through them. The
steady increase in industry investment in CRCs over their quarter century history, shows this
to be the case. The NFF, Australian Industry Group, The Australia Chamber of Commerce and
Industry have consistently voiced their support for the CRC Programme.
We argue that this is because of the CRC Programme design that provides the time, scale and culture
to encourage and allow for outstanding performance.
Cooperative Research Centres Association 2016 – 2017 Pre- Budget Submission
Page 2
Program funding decline
The CRC Programme has enjoyed
bipartisan political support throughout its
history. But a decade long decline in
financial support for the Programme has
resulted in a loss of CRCs to the country.
The loss of financial support from the
Commonwealth obviously results in a loss
of financial support from industry and
research organisations. Perhaps more
importantly, industry confidence to
develop and participate in CRC bids has
waned in the face of declining
government support.
Figure 1 Commonwealth Investment in CRCs
80
70
Number of CRCs
60
50
40
30
20
10
0
Figure 2. Over the past six years the number of CRCs has fallen
dramatically.
In accepting the recommendations of the
Miles Review (2015), the Government has
effectively expanded the scope of the CRC
Programme through the adoption of CRCPs. The CRC Association is highly
supportive of this initiative. Australia’s
record of collaborative research is
extremely poor and warrants further
government support to encourage
business and public research agencies to
work together.
The CRC Programme is the Governments
best tool to improve industry-research
collaboration. Given Australia’s very poor
position relative to other OECD countries,
the declining CRC Programme support
over the past decade is a major concern.
It is unrealistic to expect the CRC Programme to expand with CRC-Ps and tackle one of Australia’s most
urgent innovation needs without additional financial support.
Cooperative Research Centres Association 2016 – 2017 Pre- Budget Submission
Page 3
Budget submission
The CRC Association wishes to submit two proposals to government in this submission. The first is a
modest increase in the CRC Programme funding to partially address the decline of the past six years.
The second is a small change to distribution of the University Research Block Grants to remove the
current disincentive to industry collaboration with universities. The first measure would cost
government $50 million over the course of the forward estimates and the second would not be at a
cost to the budget at all, but a better use of existing funds.
The CRC Association has written to the Education and Industry Minsters to support this initiative
though placement of the CRC Program on the Australian Competitive Grant Register. Although strictly
not a budget measure, this policy initiative will positively impact industry research.
Partial restoration of the CRC Program budget
The CRC Association submits that the Government should restore support for the CRC Programme
over the course of the forward estimates. The cost to the budget is shown in the table below.
2015-16
($M)
2016-17
($M)
2017-18
($M)
2018-19
($M)
Current CRC Programme
commitment
141,148
150,282
160,123
156,403
Suggested CRC Programme
commitment
146,148
165,282
175,123
171,403
5
15
15
15
Additional funding required in the
forward estimates
The total cost over the forward estimates is $50 million, with the cost in 2015-2016 being $5 million.
The partial restoration of the CRC Program, combined with the other policy measure suggested in this
submission, would be sufficient to stimulate renewed interest for major industry-university
collaborations.
Payoff for Australia
The partial restoration of the CRC Programme budget to levels closer to those supported during the
Howard Government will encourage industry and research confidence to continuing their strong
support for the Programme.
The National Innovation and Science Agenda has set Australia on a new path. The CRC Programme will
make a major contribution but realistically needs increased budget support.
Cooperative Research Centres Association 2016 – 2017 Pre- Budget Submission
Page 4
Review/Study
Year
Main finding(s)
Howard
Partners
2003
Allen
Consulting
2005
Allen
Consulting
Group
2012
Found that three types of CRC had emerged: (1) those delivering national benefits,
generally through repair and replenishment of Australia's natural capital; (2) those
delivering collective industry benefits and (3) delivery of commercial benefits
through new businesses.
Modelling over the 1992 to 2010 period the Australian economy's overall
performance has been considerably enhanced when compared to the performance
that when compared to the performance that would otherwise have occurred in the
absence of the Commonwealth Government investment in the round one to seven
CRCs that was provided between 1992 and 2005.
Almost $14.5 billion of direct economic impacts are estimated to have accrued from
CRC produced technologies, products and processes. This includes $8.6 billion of
impacts already materialised from 1991 to 2012 and a further $5.9 billion of
imminent impacts estimated to occur over the next five years. It was estimated that
the program generated a net benefit to the economy of $7.5 billion over this period,
or around 0.03 percentage points of additional GDP growth Relative to the funds
committed to the CRC program by the Australian Government, the CRC program has
generated a net economic benefit to the community, which has exceeded its costs
by a factor of 3.1.
Miles Review
2015
Four recommendations came out of the Miles Review: (1) Putting greater emphasis
on industry “front and centre” (2) Introduction of new CRC-Projects model (3) Focus
and alignment of CRCs with Industry Growth Centres (4) Improving efficiency and
red tape reduction.
Cooperative Research Centres Association 2016 – 2017 Pre- Budget Submission
Page 5