Chris Bowen (Prospect, Australian Labor Party) Share this | Hansard source

The honourable member for Bowman says that the Labor Party is paranoid that there will be political interference in the grants process. We are not paranoid that there will be political interference; we are certain that there has been political interference, that there will continue to be political interference and that it will get worse with the Australian Research Council Amendment Bill 2006.

This bill significantly changes the mechanism by which grants are awarded by the ARC, and that is something the honourable member for Bowman referred to very briefly in his remarks. He did not address the very significant changes in the mechanism by which grants are awarded by this council, and very significant amounts of money are involved. This year the ARC has a budget of some $570 million.

Can I say at the outset that I agree with the honourable member for Bowman on one thing: the staff at the ARC do a good job, they are a professional outfit and they do their best with the resources the government gives them. The ARC plays a particularly important role, considering this government’s failings in relation to research and development. This government has dropped the ball on research and development. The level of business expenditure on R&D has only just recovered to the levels this government inherited in 1996, and it has only just recovered from the government’s very short-sighted reduction in the R&D tax concession from 150 per cent to 125 per cent.

Our levels of business expenditure on R&D are well below the OECD average. In 2004 Australia was ranked 16th of the 28 OECD countries and Australia’s performance of 0.89 per cent of GDP was well below the OECD average of 1.51 per cent. Further, Australia’s growth rate in business expenditure on research and development has also lagged behind that of the rest of the world. Australia is ranked 26th for growth in business R&D. I mention this because this makes the role of the ARC even more important. The lack of business expenditure on research and development means that Australia’s government expenditure on research and development is particularly important.

I have spoken in this House before about international best practice when it comes to R&D. Despite the good work that the ARC does, I would submit that it does not reach international best practice. The government should be looking closely at bodies such as Enterprise Ireland, Science Foundation Ireland and the National Microelectronics Research Centre of Ireland. It needs to be looking closely at those countries mentioned by the former chief scientist in his 2003 report, A chance to changecountries like Canada, Finland and, of course, Ireland.

Finland embarked on a national research and development project which saw its research and development levels and its levels of highly elaborately transformed manufactures—high-tech manufactures—increase exponentially over the 1990s. That is something this government completely and utterly failed to do. Reforms and resourcing along the lines adopted by those nations would make the ARC a body which would reach world’s best practice.

I would now like to turn to the specific provisions of this bill. This bill abolishes the board of the ARC, makes the CEO of the ARC responsible directly to the minister and allows the minister to appoint the CEO directly. So we have the situation where the CEO will now be signing off recommendations to the minister on what should be funded and what should not be funded and that the CEO’s job security will be completely at the mercy of the minister. It also gives the minister the power to create committees and appoint members of those committees. The bill does retain the College of Experts, but it downgrades its status by having it as just another committee, meaning that the minister has the power to directly appoint its members.

I want to make one point very clear: I do believe that there must be a role for the minister to approve or reject funding applications at the end of the process. When we are talking about half a billion dollars of taxpayers’ money, there must at the end of the day be an elected and accountable person responsible for the expenditure of that money. Indeed, that person can only be the minister. But the minister’s powers must be administered in an open and accountable manner. This bill reduces the transparency and accountability of the funding process.

This is not a hypothetical or esoteric matter. This is not a matter, as the honourable member for Bowman suggested, where the opposition alleges that some future minister at some hypothetical point down the track might want to interfere in the selection process of grants; this is a relevant and timely matter. We say not that it will happen in the future; we say that it has happened recently and that it is happening now.

The former Minister for Education, Science and Training vetoed seven projects last year that were recommended for funding by the ARC College of Experts. Each of these applications was in the field of humanities and social science. This is perhaps unsurprising, but clearly the field of humanities and social science is something that the minister and indeed everybody who sits in this House would have an interest in. There are two scenarios here. Either the College of Experts recommended inappropriate areas for funding—areas the average Australian taxpayer would say money should not be expended on because they were a waste of money and that funding was unnecessary; or the College of Experts made appropriate recommendations—that the areas need to be better researched, but the minister thought that the findings of that research might be politically embarrassing or it was research that did not fit the cultural and ideological predilections of this government.

I do not know which is the answer, because the government will not release the details of the rejected applications. This is not transparency. It may well be that I and members on this side of the House would agree with the minister that these funding applications should have been rejected. I suspect that there would be varying views within the House on the matter. But we cannot have a debate and a dialogue about it because we do not know. The fact that the government will not release the details of the grants that were rejected makes me suspicious that it is the latter reason—that they do not fit in with the cultural prejudices and predilections of this government. We all know that the Howard government believes in controlling the debate in the culture war—that this is something particularly important to the Prime Minister. We all know that the Howard government has particular cultural concerns. I suspect that this government has been interfering with the grants process to meet those concerns.

But this is not a matter that applies to the humanities only. Sometimes, even medical research can be controversial. It is quite conceivable that the ARC would want to fund some medical research that a minister for some moral, religious or other reason found objectionable. In my view, it would be necessary to have a full and open public debate on this. It should not be possible for a minister to secretly kybosh a funding application. This bill gives the minister so much sway that it is doubtful that such a controversy would ever reach the light of day.

In an area such as this, where there are complex moral, ethical and medical arguments to be had, transparency and openness are key. I am not saying such decisions should come to this House for approval. Of course, they should not; they should be approved or rejected by the minister. But that minister’s decisions must be on the public record and there must be an open and transparent process which allows those decisions to be questioned by members in this House, in the other place and in public. This bill does not present transparency and it does not promote openness.

As I say, I believe the minister should have the right to veto certain funding applications, but this must be done in an open and transparent manner. This bill worsens openness and transparency. By abolishing the board, there is less of a buffer between the minister and the funding approval process. This is not an improvement to governance; it is a deterioration in good governance. It has the capacity to impact—in fact, I would respectfully submit that it already has impacted—on the good reputation the ARC has for the rigour of its application and approval process, and I refer not only to the ARC’s reputation domestically but to its reputation internationally. Up until this recent series of political interference, that process has been rigorous. On average, three-quarters of the applications in any one year are rejected. That says to me that there is a rigorous process, that there is quite an onerous process for applicants to go through.

This bill was introduced by the current Minister for Education, Science and Training, but it was flagged by the previous minister. On the 29 March this year the minister told the Australian newspaper that she thought she would be having a much less interventionist role than her predecessor. The journalist in the Australian wrote:

Her comments will go some way towards restoring confidence in an agency whose future was looking rocky.

But just one week later the minister introduced this bill, the bill that gives her the power to be a lot more interventionist, although she said she would be less interventionist. The minister might find that she is just too tempted with the extra power that she is giving herself in this bill, but in any event she will not be the minister forever. This bill allows future ministers to intervene in the funding process without even the brake of a board. The board plays a very important role. If a minister is overreaching, if a minister is interfering or if a minister is making inappropriate political decisions about the funding allocation of taxpayers’ money, then a board can be a handbrake. A board can be a warning signal to a minister: ‘Back off—we believe this is inappropriate.’ But there will be no board once this bill passes through this parliament.

I support the Deputy Leader of the Opposition’s comments and her call for the reconstitution of the board of the Australian Research Council, for proper peer review to be enshrined and to have the CEO answerable to a board, not to the minister directly. I agree that the minister should also be tabling approved grants in this place. I believe that this bill will make it harder for the ARC to reach international best practice, not easier. I hope that the government will at long last, after 10 years of neglect, embrace a national program to enhance research and development so that we can, as a first step, increase our R&D to OECD levels. I hope that the board of the ARC is left in place so that it can play a role in that process and that the ARC can be restored to its important and pre-eminent role as Australia’s primary research funding source.

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