Jenny Macklin (Jagajaga, Australian Labor Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

First of all, I would like to talk about the appalling behaviour of the government in the chamber today. We have before us a critical piece of legislation which has the potential to undermine the integrity, the independence and the international reputation of the Australian Research Council and of Australian research more generally if it becomes law. But the government today has made a total mockery of this bill by deciding to ram it through the House tonight with no proper debate, no chance to move and debate amendments and no opportunity to question the Minister for Education, Science and Training over the impact of this very heavy-handed bill. This is yet another example of how this government is out of control and out of touch. The government does not seem to be able to handle any debate or dissent, whether it is in this chamber today or on the Australian Research Council.

The Australian Research Council Amendment Bill 2006 gives effect to the former education minister’s unilateral decision to abolish the board of the ARC. With a simple press release, the former education minister decided to intervene and direct the actions of the ARC in a way that no other minister has done before. The Howard government had a chance to redeem itself earlier this year when a new minister came to the education portfolio. The current Minister for Education, Science and Training could have quietly backed away from some of her predecessor’s more outrageous excesses, but she chose not to.

With this bill, the minister is damaging the integrity and independence of the ARC in four main ways. First of all, the bill abolishes the ARC’s board and transfers the board’s functions to the chief executive officer and the minister. Secondly, it makes the CEO directly answerable to the minister. Thirdly, it gives the minister the power to intervene directly in the everyday workings of the ARC, to appoint the chief executive and all of the ARC’s committees, including the ARC’s main peer review committee, the College of Experts. Fourthly, it removes the ability of the ARC to offer strategic advice and conduct inquiries into research matters of national interest.

Lastly, the bill extends appropriation funding to the ARC for 2008-09. There is no policy reason for tacking on the ARC’s core funding grant to the end of this extreme and very heavy-handed bill. The current act gives the ARC security until 2008. The only reason that the ARC’s appropriations have been tacked onto the end of this bill is that the government knows that Labor will not stand in the way of core funding to the ARC. It is this last feature of the bill which means that Labor will not oppose this legislation.

Of course, we in the Labor Party understand that we must exercise responsibility and care when it comes to funding high-quality research in this country. However, we do have very serious concerns with this legislation. I would have moved amendments in the consideration in detail stage, and I would have had the opportunity to question the minister about our concerns, but that is not possible because of the heavy-handed way in which the government has behaved today. The amendments that I will seek to have incorporated would have improved transparency and limited the capacity of the minister to impose her political whim on the ARC.

The government justified its decision to sack the board and diminish the ARC’s importance under the guise of its review of the corporate governance of statutory authorities and officeholders, otherwise known as the Uhrig review. This review does recommend that boards of statutory authorities be abolished unless the government is prepared to devolve all responsibility to those agencies.

But we have a problem when the Uhrig recommendations collide with this government’s political reality. This Howard government is a heavy-handed, meddling, ideologically driven outfit, not afraid—ever—to destroy anything that opposes its views. This is the sad political reality of why we are presented with these changes today and why the government is getting rid of the ARC board. That will not deliver better governance, more transparency or proper accountability of taxpayers’ funds. It is just like everything else in this government. This government is all about playing politics and pushing extreme agendas, and that is what we are looking at today.

Under the existing ARC Act, the ARC was charged with, first of all, making recommendations to the minister about which research proposals should be funded; secondly, administering the various regimes of financial assistance provided by the ARC; and, thirdly, providing strategic advice to the minister on research matters. This bill transfers all of these functions to one person, the chief executive. The board of the ARC was charged with hiring the chief executive with the approval of the minister, directing the CEO to perform certain functions, establishing committees to assist the effective and efficient functioning of the ARC, making sure that the ARC’s functions were performed properly and, finally and very importantly, initiating inquiries on research related matters.

The ARC bill transfers the first four responsibilities to the minister and, most disappointingly, removes the power to conduct inquiries from the ARC. So the ARC will become one person in the hands of a grand puppet master, the Howard government’s education minister. The ARC’s funding recommendations have always been subject to the minister’s final approval, but the presence of a board has created a buffer between this government’s politically driven agendas and an independent research funding body.

At the moment, the ARC board assesses recommendations from ARC committees and sends its recommendations to the minister for approval. It is up to the minister to reject or change the board’s recommendations. This bill would change that. If this bill becomes law, unamended, the minister would be able to reject or change recommendations from the chief executive, a single person who is appointed by the minister and of course can be sacked by the minister. The ARC could run into grave problems if this bill becomes law. There will be no group of eminent experts from the academic or business communities to mediate the minister’s interference. It is much harder to sack 14 distinguished people who disagree with you than the one you have appointed yourself.

Under the ARC’s current act, the education minister can only appoint the chief executive if he or she has taken the board’s advice on the appointment. The minister will no longer have to consult anyone with academic or management expertise before naming a favourite. And let us not delude ourselves for one single minute that the chief executive has much protection or job security if they disagree with a minister in this government. I doubt that the chief executive of the ARC in the future will have much job security at all.

If the government is genuinely concerned that there is confusion over reporting and accountability with the ARC, the solution is for the minister to issue clear directions to the ARC and to establish a set of expectations that she expects them to meet. Good governance and accountability could slip away from the ARC’s grasp with this major transfer of powers to two individuals, the minister and her chief executive. If this bill becomes law, the minister’s selection of the chief executive and all of the ARC’s committee members would not be regarded as a legislative instrument. No democratically elected member of parliament would be able to question or challenge this government’s record when it comes to these issues. Let us not fool ourselves: this government is not interested in transparency or accountability. Even before this bill was introduced, the Howard government had plenty of form on meddling with research and research funding. Brendan Nelson, the former Minister for Education, Science and Training, vetoed at least 10 separate grant recommendations from the ARC in just two years. This government certainly has plenty of form on silencing dissent.

But this bill goes much further than allowing an education minister to veto proposals. The minister will now be able to establish any ARC committee that looks at grants and select every individual assessing grant proposals before those committees. This includes all the ARC’s peer review panels, including its College of Experts. The minister will also be able to appoint directly the one person whose job it is to sign off on those grant recommendations and deliver them to the minister. Under the current act, the board of the ARC does all these things with the approval of the minister. The difference is crucial. It is one thing to accept or reject membership recommendations from the board of an expert body; it is quite another to make them yourself. Before appointing someone, the minister only has to ‘try to ensure that the composition of the committee reflects the diversity of the interests in the matter or matters that the committee will be dealing with’. Telling a Howard government minister to ‘try to ensure’ that they do not rort something is like putting a big bag of lollies in front of five-year-olds and telling them to sit still. This government just will not be able to help itself.

The College of Experts plays a critical role in the ARC, as do the expert panels that assess proposals for the ARC’s Linkage grants and Federation Fellowships. Many of its members are internationally acclaimed researchers, and they provide strategic advice to the board on funding proposals across a wide range of disciplines. Peer review is currently international best practice, the most reliable mechanism we have today to assess high-quality research around the world. The research community is very right to be worried about the College of Experts being turned into a ministerial plaything. Where would we have renewable energy research or embryonic stem cell research if it were up to a Howard government minister to pick whoever they liked to assess those proposals?

If this bill becomes law the minister will also have the power to get rid of the College of Experts completely, so at the drop of a hat the minister could destroy the integrity of the ARC. No country in the world would take the quality of research in Australia seriously if a minister meddled with peer review in this way. The Federation of Australasian Science and Technology Societies said:

Australia produces about 1% of the world’s knowledge and accessing the other 99% is significantly dependent on:

the quality of Australian research;

the calibre of Australian researchers; and

the integrity of Australian research agencies and institutions.

Australia has built a reputation of excellence in many fields of research, thanks in part to the integrity of the competitive research funding process. Freedom from political interference in research and research funding decisions is critical to that reputation. To top it off, the minister retains her ability to say yes or no to any grant that comes through this process.

It is true that the current minister has said that she does not intend to veto grant recommendations or interfere with the College of Experts. If that is the case, why give the minister this kind of power in the first place? Labor recognises that ministers in any government must have ultimate responsibility for activities in their portfolio. But what we are responding to today is what we know has happened time and time again with the government. They just will not be able to help themselves from taking advantage of the massive power that this bill allows. This bill is a slap in the face for good governance, transparency and accountability. We know that the government have form when it comes to all the different pork-barrelling examples we are so familiar with, whether it is transport, regional grants or schools funding. We know what the government like to get up to. It is simply not in the interests of good governance or world-class research for the minister to be able to manipulate or pork-barrel our research funding in the way in which it has been done in other areas.

I am also concerned that the government has undermined the ARC’s ability to provide strategic advice on research issues and conduct inquiries into research matters of national interest. This is a very important aspect of the ARC’s capacity. The ARC may no longer be able to examine whether it is serving the national interest through targeted research, whether it is funding research appropriately or whether the research that it funds is having any impact. The ARC itself was unclear at Senate estimates whether it retains the power to initiate inquiries under the bill. There is no reason to take this very heavy-handed approach to the ARC under the guise of the Uhrig review of governance. In fact, the Minister for Health and Ageing tabled a bill this year to change the governance arrangements of the National Health and Medical Research Council in line with the Uhrig review but without abolishing its board.

Labor’s amendments would have protected the integrity of the ARC and its grants approval processes, if we had had the chance to have them moved, debated and voted on. For the information of those who are very concerned about these issues, I will go through the amendments that Labor would like to have seen made to this legislation. Firstly, we would like to see and certainly would have amended the legislation to have the board of the ARC retained as an important safeguard against politicisation by this government. Secondly, Labor seeks to enshrine peer and expert review as the main mechanisms to be used to determine research funding recommendations to the minister. I have already given my reasons for believing that the minister’s unfettered power to change or abolish peer review could damage Australia’s research recommendations. Labor also seeks to amend the legislation because we reject the government’s attempts to make the chief executive completely vulnerable to ministerial interference. We would do this first by making sure that the chief executive is appointed responsibly and is answerable to the minister through the board. We also reject the government’s attempts to appoint the ARC’s committees directly.

Department of education representatives tried to tell the Senate committee inquiring into this bill that there was no change to the minister’s powers. They said:

I think the first thing to point out is that the amendments actually maintain the minister’s decision-making role in appointments to designated committees and in the grant approval processes. The legislation does not enhance or diminish that; it maintains it.

Unfortunately, this is simply not the case and you would have to wonder why the department said this to the inquiry. The bill before us and the act as it stands today are substantially different. Even the ARC concurred at the recent Senate estimates hearings that this bill is a radical departure from existing arrangements. A sensible role for the minister to play under the current act is to outline priorities and expectations for statutory bodies and to lay out clear guidelines to meet those priorities. Meddling with the internal management of the ARC, its staff and its committees is not good governance.

We would also like to see the minister being required to table approved grants in every calendar year. Tenured employment is a figment of the imagination of most staff at universities these days and very many of our researchers rely on grants for job security. We certainly need to make sure that, when the government decides to approve grants, it is done in a timely way. Universities rely on grant funding to manage research and to make sure that staff will be there to conduct the research in the following year.

Given the chief executive’s enhanced responsibilities under this legislation, we certainly think that their operational responsibilities should include developing and presenting the organisation’s strategic plan to the minister. It is very important for us to remember that the ARC exists to fund the best and highest quality research in Australia and to build the international reputation and integrity of Australian research. The ARC’s governance arrangements should assist in that purpose but, unfortunately, much of this bill threatens to destroy the integrity and independence of the ARC.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

We are here today debating the Australian Research Council Amendment Bill 2006 as a government response to the Uhrig review of governance into Australian research, but first I would report on the research community’s significant and positive response to the 2006 budget announcement of $905 being injected into research. Obviously, it followed that that substantial and significant injection was widely acknowledged and highly regarded at medical research dinners around the country.

Together with that announcement came an award. On Thursday night, Professor Tien Wong from the Royal Victoria Eye and Ear Hospital—a young clinician scientist at the Centre for Eye Research Australia at the University of Melbourne—was acknowledged as an outstanding role model for clinicians. Tien, at the age of just 38, is developing a $6 million retinal vascular imaging centre. He is responsible for a number of multidisciplinary collaborative papers in that area and has worked to develop a centre that links 15 research institutes together, both in Australia regionally and the US. The potential work of Australian researchers at this institution is significant. It has linked heart disease with hypertension, which are leading causes of death in this country. That is why the award to Professor Tien Wong was received so warmly in Melbourne when presented by Minister Fran Bailey. That award recognises the achievement of Australia’s finest young scientist and he is in extremely good company.

Great talent in medical research needs to be backed up by resources; without those, that wonderful work is impossible. The Australian government over 10 years has increased medical research funding substantially, even as a proportion of GDP, and the allocation made in the last budget continues that. Most OECD economies are making substantial strides in health and medical research funding. It is interesting to look at the United States, where a substantial jump in funding that started in 1998 has now levelled off significantly. The lesson we take from that is that, in any area where we choose to increase funding, that commitment has to be sustained. There is no point in making large flashy claims in an individual year, if they cannot be followed up in the years to come.

In Australia’s case there have been consistent increases, a doubling of funding in many cases. Let me take you back to when this government began in 1996: the total budget for health and medical research was $127 million, a paltry sum in comparison. Since then, there have been substantial increases in infrastructure, in bringing on new, talented researchers and providing the fellowships that bring great minds back to this country, and in a boost to both the ARC and the NHMRC. The $500 million boost over four years takes me back to 2002, when some of the most strenuous cases being put to the government were to increase and to continue the commitment to health and medical research. I am pleased to say that that work was extraordinarily effective. If there is a lesson on how to secure such increases in funding, it was done superbly by groups such as ASMR and others who were able to convince and lobby so effectively to see these very worthwhile increases secured.

The fellowships to which I referred are for 50 to 65 senior research positions, costing $170 million over nine years. It is worth remembering that to bring the greatest minds back to this country often requires an enormous amount of clinical support, research support and infrastructure, and for that we rely upon the support of state governments to provide a lot of the platform to do it. The additional funding is also being directed through the NHMRC. The response to the Wills review was significant, the doubling of funding that occurred over forward estimates in 2001 was significant and what happened in the last budget was a continuation of that.

What is also important is the establishment of a research fellowship scheme. That will complement a number of schemes that already exist to make sure that we keep the best brains in health and medical research working right here in this country. One area that was mentioned by the opposition spokesperson was adult stem cell research. It was suggested that that sort of research might be under threat. That could not be further from the truth. We have world-class researchers in stem cell development in Melbourne. It was the National Adult Stem Cell Research Centre, with a particular focus on Parkinson’s disease, motor neurone disease and schizophrenia, that was the recipient of $20 million over four years.

In addition, a number of our finest medical research centres have been given significant infrastructure boosts. I would like to highlight the Walter and Eliza Hall Institute of Medical Research, but also the Brain and Mind Research Institute received $10 million. Two hundred million dollars was provided over seven years to fund overhead infrastructure in a range of Australia’s finest independent medical research facilities, and $31 million was announced for the medical research infrastructure initiative in last year’s budget.

What we do have, apart from a significant jump in funding for medical research with the announcement by the Treasurer in the 2006-07 budget, is a call to arms for young researchers to never forget that there is no such thing as earmarked funding and no such thing as guaranteed funding formulas that assure you of a source of funding forever in areas as important as medical research. What became very clear to me as I worked quite closely with those who were seeking increases in funding was that researchers are not a group that seeks approbation every day, that they are not a sector of society that constantly seeks self-congratulation. Rarely do they get the approbation that they deserve, but they do essential work that is vital.

It is quite easy for an economy to choose to free-ride and rely on the invention and the ingenuity of others, but that is not what Australia does. We have a fine reputation for research. We have a great challenge to commercialise our great ideas. Thomas Barlow wrote a recent book on this very topic, saying that Australia punches above its weight. I would not say substantially so because I would not want to overstate the case, but Australia does an excellent job in its contribution to health and medical research and, in particular, to biotechnology.

I think it would be somewhat of an overstatement to say that the reforms that have been presented in today’s bill in some way fail to enshrine peer review, threaten to undermine it and may risk politicisation. While I can understand the sentiment from the other side of the chamber that they fear this may occur, let us be honest: just by further streamlining what is already a very efficient machine should never be seen instantly as an attempt to remove transparency or as something sinister. I think that is perhaps reflecting a little paranoia from the other side of the chamber, given that the record of health and medical research in the early 1990s was not such the warm story that it has become in the last 10 years.

I should leave the final word with those who are working at the coalface, with those who contributed to the very successful last triennium that closed with its final meeting about a month ago. On behalf of both sides of the chamber, I thank those who have made incredible contributions over three years to health and medical research—to Professor John Shine, Kerry Breen, Adele Green and Judith Whitworth, already eminent figures who, over and above their research work, have made it their mission to ensure that Australia leads the way in research. I encourage younger researchers to fill their footsteps and spend just a small proportion of their excellent clinical and research careers in ensuring that Australian research remains at the top of world outputs, as it is at the moment. For those reasons, I support both Australia’s performance in health and medical research and this bill.

Chris Bowen (Prospect, Australian Labor Party) Share this | Link to 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.

Stuart Henry (Hasluck, Liberal Party) Share this | Link to this | Hansard source

The Australian Research Council Amendment Bill 2006 amends the Australian Research Council Act 2001 to implement changes to the ARC’s governance arrangements in response to the government’s endorsement of the recommendations of the Review of the Corporate Governance of Statutory Authorities and Office Holders. The issue of governance is a perennial challenge but has gained prominence in recent years. The importance of good governance in the private sector, especially in publicly listed companies, is hard to overstate, but I would argue that good governance is even more important in government itself. Here in government we have a fundamental responsibility to the Australian community that we will not only use their taxes wisely but always work to secure the future of our nation. This is what governments are supposed to do. This is most fundamentally what separates businesses from government. What businesses do could be in the nation’s interest, but it is our job to protect that interest, now and in the future.

This is why in November 2002 the Howard government appointed Mr John Uhrig AC to conduct a review of corporate governance of Australian government statutory authorities and office holders. The Uhrig review was designed to identify any ways governance could be improved without compromising the statutory duties involved. The Australian Research Council Amendment Bill 2006 is an example of the government acting to implement the insights and recommendations of this review. In this case it involves modifying the legislation covering the operation of the ARC, arguably one of the most important statutory bodies for Australia’s future success and prosperity. The Uhrig review was charged with identifying opportunities for positive reform. It specifically allowed for the development of a template of governance principles with the potential to be applied broadly across government.

I will make some points on the outstanding contribution of the ARC to date and why I think that opportunities to further improve the operation of the ARC are so important. But first I think it is worth noting several of the key points made by the Uhrig review. The report is clearly founded on the view that government is responsible for carrying out its taxation, regulatory and service provision roles in a way that meets four key criteria: efficiency, effectiveness, objectivity and transparency. Governance of statutory bodies is obviously crucial to this.

While there is no universally agreed definition of good governance, the report did identify three key elements which must be clear and well executed: (1) understanding of what constitutes success, recognising that this will be different for each statutory body but that it should include statements of purpose and performance expectations; (2) organising the entity for success—this includes appropriate structures and definitions of roles as well as clear arrangements for the delegation, control and use of power; and (3) ensuring success, which involves accountability, transparency and evaluation.

In creating the template principles for Commonwealth statutory bodies, the review considered evidence on good governance from a wide range of public and private sector entities. It found a number of valuable opportunities for improving the effectiveness of governance practices within Australia’s statutory bodies. These are outlined in the report, but what concerns us most here today is the guideline for which statutory bodies would work best with a board. The Uhrig review found that operation with a board is best suited to bodies with a predominantly commercial focus to their activities but that bodies whose major activities were non-commercial would be best suited to an ‘executive management’ template in which the CEO reports directly to the minister responsible. The government requested that ministers assess governance arrangements against these templates, as they serve to assist as a reference point in the establishment of effective governance arrangements.

The Uhrig governance principles also fully inform the policy document, ‘Governance arrangements for Australian government bodies’, released by the Department of Finance and Administration in August 2005. The aim of this document is to promote consistency in the governance arrangements of Australian government bodies, while reinforcing the principles set out in the Uhrig review, in line with the department’s ongoing role of promoting better practice governance of Australian government bodies generally.

This brings me back to the ARC, which clearly fits the latter category. Although successive boards of the ARC have served the nation well and provided excellent stewardship and leadership in their roles, this government agrees with the finding of the Uhrig review that this is one of the agencies that will be able to work more efficiently under an executive management model. The ARC is not an organisation that the Howard government would change lightly. In fact, this government has been visionary in its commitment to supporting research, especially the fundamental, frontier-of-knowledge type of research made possible through the ARC. This is all part of the government’s 10-year commitment to science and innovation, which was made with the release two years ago of Backing Australia’s Ability: Building Our Future through Science and Innovation. Last year, for example, over $380 million was awarded to nearly 1,400 research projects in the new Commonwealth grants program alone.

As well as providing for governance improvements, this bill also increases overall appropriation for the ARC by more than $570 million. The ARC is of vital long-term importance to Australia, and anything that improves its flexibility, responsiveness and effectiveness is a valuable opportunity to invest in our future. In fact, a 2003 report by the Allen Consulting Group found that, in terms of impact on gross domestic product alone, the ARC delivered a social benefit rate of return of 39 per cent and that, taking into account less easily measurable benefits such as health, cultural and environmental outcomes, the social rate of return to the Australian community was more likely to be 50 per cent. This is an outstanding result, even better than the excellent rates of return achieved by Australia’s other publicly funded research programs. I am not a scientist but, from what I understand, this rate of return is indicative of the extraordinary value offered by fundamental, innovative research programs, especially when they are within the context of a well-managed and well-prioritised national funding program such as the ARC, with its parallel emphases on discovery and linkage.

This bill allows for the retirement of the ARC board to prevent confusion of responsibilities between the board and the CEO. Under this new legislation the CEO will report directly to the minister but will still be supported and guided by the ARC’s College of Experts, a 70-plus strong panel from across the nation, which has long been providing the front-line intellectual and professional advice on research management and priorities that an agency such as this relies on. This bill does not change those arrangements. In fact, it streamlines them without affecting the independence of the ARC itself, which this government achieved through the Knowledge and Innovation reforms introduced in 2001. In keeping with this government’s approach to this, the minister’s role regarding application assessments remains unchanged.

This bill allows for the minister to create an advisory committee with a strongly strategic role. In essence, the CEO will therefore get advice from the College of Experts on matters of grant applications and from the advisory committee on matters of strategic direction. This is a much more transparent system both in terms of clarity of role for the dedicated and highly qualified people who give their time to serve in this way and in terms of openness and accountability for grant applicants and the public in general.

The range of grants awarded in my own state of Western Australia last year is a wonderful illustration of the diversity of research this government is supporting through the ARC. Just one of the examples from Murdoch University is looking at the sugar based metabolism of Australia’s honeyeaters. These unique Australian species offer knowledge not just on our unique environment but also on how we can develop better treatments for metabolic conditions in humans. Curtin University of Technology was awarded grants for research into ceramics, geology, hydrodynamics, science education, cultural linguistics, corporate performance and computer modelling, while the Western Australian Museum is receiving funds to explore the relationship between climate change and extinctions. The University of Western Australia also has an impressive list of funded projects including tissue engineering, human vision, brain growth and learning ability in children, biometrics, cancer treatments, immune system genetics, how to prevent antisocial behaviour in disadvantaged young people, fisheries management, oceanography, super gravity and development of a new laser clock. The fact that these are examples only from last year’s grants list, and only from WA, illustrates powerfully what a diverse, vibrant and exciting sector the research community is in Australia.

The Australian government’s support for science and innovation, as reported in the 2005-06 science and innovation budget tables, was a record $5.53 billion in 2005-06. In 2006-07 the Australian government will provide $560.6 million in support for the ARC. Australia ranks 7th amongst OECD countries in terms of world science and engineering articles per million population. At 757 articles per million population, this is more than 1½ times the OECD average of 484. Australia ranks in the top half of OECD countries for prominence of cited science and engineering literature in most areas of research. This includes 15th in clinical medicine, 15th in biomedical research, 12th in chemistry, 12th in earth and space science and 14th in engineering and technology. Australia ranks 11th among OECD countries in terms of share of world scientific publications for 2000-04, with 2.89 per cent.

The ARC is exactly the sort of agency that should be a statutory body. The long-term focus and emphasis on diversity are where government excels and plays a crucial enabling role in making sure Australia’s research achieves excellence and remains globally competitive so that it can continue to deliver benefits to the community for generations to come. This bill of amendments ensures even better governance and therefore even better outcomes from our nation’s most exciting research endeavours. I commend the bill to the House.

Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Link to this | Hansard source

The primary purpose of the Australian Research Council Amendment Bill 2006 is to abolish the Australian Research Council board and to transfer its powers to the chief executive officer and the minister. The government justifies this legislation by citing the conclusion of the Uhrig review that agencies should ultimately be directed by government—that is, by ministers. There is reason to support greater transparency in the operations of the Australian Research Council to ensure public accountability. This could be achieved by clarifying and delineating the ARC’s functions rather than by abolishing a critical mediating body that stands between a government and the independent function of our primary academic-funding body. I believe that this bill undermines the autonomy and therefore the academic credibility of the Australian Research Council and its importance as an advisory body on research matters. The bill removes the ability of the Australian Research Council to initiate and to conduct inquiries into relevant research issues.

Despite the opportunity this bill provides to the government to effectively politically annex the Research Council, Labor will not oppose it because it extends the standing appropriation to the Australian Research Council. The appropriation for 2008-09 is some $572 million. To oppose this bill would effectively mean opposing funding to the Australian Research Council. The bill continues the current practice of prohibiting the minister from recommending which particular projects are to be funded. However, the bill allows the minister to appoint directly the chief executive officer and all committees of the Australian Research Council. This bill is unprecedented in the amount of control that any minister has had or has been given over the grants process in the history of the funding body. The bill also reduces the importance of the ARC as a body capable of offering strategic advice and conducting inquiries into research matters of national interest.

Labor believes that the bill ought to be substantially amended and that those amendments ought to reflect the following: retention of the board with oversight and advisory capacity; enhanced responsibilities of the chief executive officer, including direct reporting of ARC decisions to the minister and power to establish advisory committees as needed; retention of the College of Experts as an independent committee of the ARC over which the minister has no power of appointment—this is not the case with the existing ARC Act; and, finally, retention of the ability of the Australian Research Council to initiate and conduct inquiries over research matters of interest. I think that these changes to the bill are absolutely necessary to protect academic independence and research integrity.

What the government is putting forward dilutes the peer review process. By introducing political elements into the process of funding Australian academic research, the government detracts from the fidelity of the peer review process. Peer review is the foundation of the world’s academic achievements. It is the basic process by which knowledge is tested and built upon. Arguably, the ARC could be more transparent, peer review need not mean secrecy and the reforms that improve transparency are arguably in order. But to assume political influence over the council and its decisions, as this bill will enact, is to debase the academic integrity of Australia’s tertiary sector. This matters. It matters because our academic integrity provides quality. It matters because our academic integrity provides up-to-date training for Australians. It matters because it is academic integrity that attracts foreign students. It matters because it is our academic integrity that appeals to internationally respected professors, researchers and tertiary industries. I ask the government: why threaten the integrity of an institution as important to our future as this one? You have to ask yourself: can there be any reason for this other than this government’s instinctive quest for greater power and its dislike of independent sources of research and advice?

I draw the attention of the House to the performance audit carried out by the Australian National Audit Office into the Australian Research Council’s management of research grants. This audit report is No. 38 of 2005-06. It makes a couple of significant findings. It indicates that the Audit Office has detected areas where the Australian Research Council could improve its performance management framework and be more consistent with the outcomes and outputs framework of the Department of Finance and Administration. In particular, the Audit Office found that there was no obvious link between the Australian Research Council’s effectiveness indicators and its 10 key performance indicators and that reporting against the effectiveness indicators was minimal. The separation of indicators against administered and departmental items or output and outcomes in the portfolio budget statements was also not well defined.

The Audit Office suggested that the Australian Research Council use more targets and a wider range of quality and quantity measures to describe its performance and its performance reporting to Finance’s requirements. The Audit Office also indicated that there were shortcomings in the Australian Research Council’s administrative processes, which meant that the Australian Research Council was not in a position to determine and inform the government of whether all grants met their objectives, whether funds were used as intended and whether ARC goals were being fully met.

While it is observed that the ARC has a strong focus on selecting the best applications, the Audit Office found that it had few systemic processes to enable effective or timely post-award management of grants. One of the recommendations of the Audit Office for the Research Council comprises a number of suggestions to strengthen the Research Council’s management of grants with particular emphasis on improving the effectiveness, transparency and accountability of the Research Council’s grants administration. I certainly hope that those recommendations are followed up and put into effect and that we see some improvements as a result.

In this country there is considerable concern about the effort being put into renewable energy research. A number of renewal energy researchers have suggested that there is a climate of fear causing a loss of expertise and tipping Australia, which used to boast a world-leading industry, into decline. The Canberra Times has reported on comments made by the Murdoch University Professor of Energy Studies, Dr Philip Jennings. According to the report:

... scientists were fearful of losing research grants if they were perceived as criticising Federal Government policies on renewable energy or climate change.

Dr Jennings said:

They’re afraid of being victimised because they have seen it happen to colleagues who have spoken up about government funding cuts to renewables research.

Similarly:

Former federal energy policy adviser and whistleblower Guy Pearce has ... called for “independent and credible economic research” to inform the Government’s policy on energy options on climate change.

In addressing a coastal environment forum in Queensland recently, Professor Pearce said:

It’s important to understand that some of the same interests who have persuaded our government to avoid emission cuts domestically also have an interest in domestic nuclear power. Our two biggest uranium producers are also in the coal and aluminium business …

The fact is that Australia was a pioneer and world leader in solar technology as far back as the 1940s but has lost its leadership as research programs have closed. Scientists have moved overseas and taken up lucrative research opportunities in Europe, China and Japan. For example, we have lost solar thermal technology to China because there were no funds for its commercialisation. It has been estimated that that kind of industry would have been worth at least $1 billion to Australia, but that opportunity has been lost. Because of work done at the CSIRO in days gone by, we led the world in solar water heater technology. Regrettably, we have now lost that lead to Israel and Greece because of this government’s short-sighted views on renewable energy.

The federal government has progressively stripped solar energy of research funding. It closed the Energy Research and Development Corporation and the Cooperative Research Centre for Renewable Energy, so in this country we now have only two solar energy research centres—one at the Australian National University and the other at the University of New South Wales—despite Australia’s strong international track record of innovative solar technology.

A recent report to the World Bank by six leading scientists recommended active and continued support for solar thermal technology, claiming that it could play ‘a more significant role’ than, for example, wind power in achieving deep cuts to greenhouse gas emissions. That report supports claims made in a report by the Cooperative Research Centre for Coal in Sustainable Development that solar thermal technology is capable of producing Australia’s entire electricity demand.

It has also been suggested at the CSIRO that the kind of research work that we need to build our sustainable energy industries for the future and meet our climate change targets and responsibilities is simply not being done. Scientists at the CSIRO have been operating under a climate of job insecurity and keeping their heads down while the CSIRO is progressively failing to deliver on the kinds of things which we as Australians expect and are entitled to expect of it. Figures from the Department of Education, Science and Training show that administration now consumes 46½ per cent of national gross expenditure on research and development, which is up from 28½ per cent in 1989. Between June 1998 and June 2004, the CSIRO more than doubled its corporate management positions at the same time as it lost 316 people from its research projects.

The public need for expert scientific information on these issues of climate change, fossil fuel energy reliance and building of sustainable industries has never been greater, but instead of speaking out about these issues in public the CSIRO has turned inwards to exert more control on what its staff do and say. We now have a situation where the vast majority of new science positions are on short terms and the funding sometimes binds the science to confidentiality or supports a narrow view. In my view, it is regrettable that the careers of internationally respected scientists such as Dr Graeme Pearman and Dr Roger Pech were scrapped. That sets a poor example for younger scientists and discourages them from emerging as champions in the area of contemporary public debate on energy issues. We now have a situation where for the last financial year 93 per cent of appointments to the CSIRO were on fixed-term or casual arrangements, and job insecurity and the burgeoning demands of bureaucracy have forged a culture amongst CSIRO staff of keeping your head down, meeting the indicators and effectively doing the real science at night. That is regrettable and really needs to change.

We have seen a series of troubling headlines concerning CSIRO, including that CSIRO is failing to meet forecasts, that prices are rising, that standards are falling, that CSIRO is in the red and that CSIRO is set to scrap research jobs. Instead of stories of scientific triumph, CSIRO has been making the news as a result of internal strife, staff cuts, corporate excess, financial woes and those sorts of things. If we are going to see the kind of research effort that this country needs, the kind of effort that will position us properly for the future, we need our research bodies to be capable of focusing on original research, without anything in the way of political direction. The changes that the government has put forward in this legislation are unhelpful in this regard. This bill undermines the autonomy, and therefore the academic credibility, of the Australian Research Council. By transferring the powers of the ARC board to the chief executive officer and the minister, the bill opens the way for inappropriate interference. Furthermore, it removes the ability of the Research Council to initiate and conduct inquiries into relevant research issues. The amount of power over the grants process that that gives to the minister is without precedent and capable of being abused. I do not support it and the opposition does not support it.

The only reason we support this bill is that we do not want to put ourselves in the position of opposing funding for the Australian Research Council, because clearly that funding needs to go on. In my view, it is improper for the government to link serious changes of this nature to funding for the council and to put the parliament in this kind of jeopardy, whereby we are not in a position to vote in the direction we would wish to vote concerning the kinds of provisions that form the heart of this bill. Nevertheless, that is the situation. Before the government gags debate with a closure motion, we will certainly be taking the opportunity to register our concerns about the impact of this bill on public accountability and on the independence of the research process at the Australian Research Council.

Peter Garrett (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Reconciliation and the Arts) Share this | Link to this | Hansard source

As previous members have mentioned, the Australian Research Council Amendment Bill 2006 has been opposed, in part, by the opposition because of what it contains. We should really be calling it the ‘Andrew Bolt’ amendment. I am glad to see that the former minister for education, the member for Bradfield, is present in the chamber. It is interesting to look at the debate about the Australian Research Council board and the way in which the approval of research projects was undertaken by the ARC. An article in the Australian on Wednesday, 29 March 2006 entitled ‘Dust-up down at the ARC’ referred to the contribution by one of the lay members of the research grant committee and to the objections of Paddy McGuinness, who is well known to members of the House, and others to the grant applications that were put forward for the minister’s consideration. The article said:

It was an extraordinary period for ARC staff, many of whom were caught in the crossfire. Humanities and creative arts executive director Mandy Thomas, who had carriage of much of the correspondence between the protagonists, was one of them.

At the height of the kerfuffle Hoj sent an email to Thomas urging her to “stay strong”. “I am sorry you have to endure all this,” he said.

This was as a result of a public campaign waged by an opinion writer for the Herald Sun, Mr Bolt, who it seems disagreed with some of the decisions taken by the Australian Research Council board. We find ourselves in an extraordinary situation. Despite the government’s comments and despite the references in the explanatory memorandum to the Uhrig report and so on, this bill is in effect a response to Mr Bolt’s continued proclamations from the privileged position he inhabits—his views, or otherwise—and the views of other conservative commentators as to what research we should or should not be funding in this country through the Australian Research Council.

I spoke in the parliament last month about the decision to abolish the staff elected position on the ABC board. The decision on the ARC board is somewhat similar in that a loud range of credible voices are concerned about the direction in which this amendment would take us. But the government is clearly intent on carrying this legislation through the parliament, and there are political reasons, as opposed to policy reasons, for this amendment coming before the House. Under this bill, it is proposed to abolish the board of the Australian Research Council—which is made up of academics, community representatives and department of education officials, and whose membership has in the past been determined by the minister—and replace it with an advisory body which would provide advice to the CEO, who is currently Professor Peter Hoj. The CEO would take on the responsibilities of recommending to the minister which research proposals should be funded, administering the various regimes of financial assistance provided by the ARC and providing advice to the minister on research matters.

What is contemplated by this bill is that the minister will now assume the power from the board to appoint the CEO, to direct the CEO to perform certain functions, to establish committees, to assist with the effective and efficient functioning of the ARC and to ensure that the ARC’s functions are performed. This amendment greatly increases the role and responsibility of the CEO, who will be directly responsible to the minister. This bill effectively concentrates a great deal more power in a process which, up to this point in time, had been the province of a range of experts. From now on it will be the minister and, at his behest, the CEO who will determine what the ARC will and will not fund. I think it is very difficult to say that this will improve the governance of the ARC.

It is also true that, under this amendment, the minister will have more power to intervene in the functions of the ARC. The former Minister for Education, Science and Training, Dr Nelson, now the Minister for Defence, who is in the House, vetoed 10 or 11 recommendations for ARC grants. There was much publicity at the time about these recommendations and their fate. The changes that the government is contemplating in the amendment have attached to them the prospects of ongoing funding for the ARC. Clearly, the opposition would not oppose those measures, but it is very clear that there is a significant amount of concern in the scientific community, the wider community and the media about the nature of the proposed changes.

Effectively, these changes mean that there will be a further erosion of arms-length funding. I note the Australian Academy of the Humanities has argued that it is imperative that research-funding bodies are independent from government. I think that that is a self-evident enough assertion, but it is important and it is not reflected in this amendment. Frankly, for there to be confidence in the decisions that are made by funding bodies, that component of arms-length funding—the removal, as it were, from the perception or the taint of influence—is absolutely essential. It is one of the critical components of there being public confidence in a body like the ARC and in an ARC board.

The Australian Academy of the Humanities voices additional concerns. They include concerns that the performance of the ARC itself will be dependent upon one person—in this case, the chief executive officer—and that the chief executive officer, as a result of that enhanced discretionary and effective power, will feel a little more pressure than otherwise would have been the case, given that they have been appointed by the minister as well.

The National Tertiary Education Industry Union has also criticised these amendments and said that the amendments will undermine the independence and accountability of the ARC. The argument is that the findings of the Uhrig review are being implemented differently across agencies. The Uhrig review recommended that statutory agencies should use boards where they could be given genuine independence and full power to act and that where boards are not afforded this autonomy they should be replaced by an executive management system of governance. In this case, the executive management system proposed under the bill leaves only the chief executive officer to oversee the peer review process and also to respond to and relate the minister’s decisions.

I think it is well understood and well known here that the peer review process has played a very important part in equivalent and corresponding overseas bodies and that peer review is considered one of the means by which good decisions are taken that identify and harness the best of emerging and existing scientific and research thinking. The Social Sciences and Humanities Research Council of Canada states quite simply that peer review is universally recognised as the most objective and effective way to allocate public research funds, but this amendment appears to make no provision for keeping the College of Experts and the establishment, appointment and function of committees are now totally in the hands of the minister.

I think most significant were the comments and the criticisms from the Australian Vice-Chancellors Committee. The AVC Committee is probably the most significant grouping of leading academics, representing their institutions as they do, and I would have hoped that the government would have been mindful of the comments that were made by the Australian Vice-Chancellors Committee. Its concerns relate again to the minister’s ability to designate committees and control appointments and the functions of these committees. I quote:

... the AVCC is concerned that there may not be sufficient diversity in that selection process to ensure fair and reasonable advice is provided to the CEO.

Labor believes that the board of the ARC should remain as a barrier against possible political interference, that the CEO should remain free from ministerial interference, that the minister—any minister—should not meddle in the running of the ARC and its committees, that peer and expert review should remain cornerstones of the funding recommendation process, that the minister should have a deadline by which approved grants are tabled in each calendar year and that the CEO should have the enhanced responsibility of developing the ARC’s strategic plan.

There is an opportunity that the government has let go here to introduce change within the ARC which would greatly increase their capacity to run vital research projects of national significance in areas like climate change, energy alternatives and digital innovation. There is much that can be said about the sorts of directions that the ARC could and should go in, but clearly with this amendment the government shows that, by abolishing the board of the Australian Research Council, it does not have confidence in the scientific community or in the peer selection process and that it is responding to the political pressures that have emanated from right-wing journalists and commentators. To that extent, I will leave my comments about the bill there.

Ms Julie Bishop (Curtin, Liberal Party, Minister Assisting the Prime Minister for Women's Issues) Share this | Link to this | Hansard source

in reply—In concluding the second reading debate on the Australian Research Council Amendment Bill 2006 I want to thank members for their contributions. This bill amends the Australian Research Council Act 2001 to implement changes to the Australian Research Council’s governance arrangements in response to the government’s endorsement of the recommendations of the Review of the Corporate Governance of Statutory Authorities and Office Holders by John Uhrig.

The assessment of the ARC against the recommendations of the Uhrig Review found that the functions of the ARC are best suited to the executive management template. The bill will enhance the ARC’s governance arrangements to make it fully consistent with this template. This includes retiring the ARC Board and transferring the majority of the board’s functions and responsibilities to the Chief Executive Officer of the ARC. The bill allows for the creation of and appointments to designated committees which will provide advice to the chief executive officer. The chief executive officer will receive input on research matters directly from an advisory committee which will be created as a designated committee under the amended provisions of the act. As I indicated in my second reading speech, the advisory committee will not look at individual grant applications. It will focus on providing strategic advice on matters related to research and the operations of the ARC. I understand that the ARC board has given some consideration to the functions and membership of the advisory committee and I will be grateful in receiving their thoughts on this matter.

As is the case under the current ARC Act, I will continue to be responsible for approving or not approving recommendations for research funding. The College of Experts will be maintained as a designated committee as it currently is. It will continue to play a key role in the ARC’s peer review processes, particularly through the consideration of applications for funding under the discovery projects program.

I have stated publicly that I want to be able to have faith in the independence and the integrity of the peer review processes. The recent Australian National Audit Office report on the ARC’s management of research grants states that the ARC has a substantial peer review process in place with a strong focus on research merit and national benefit enabling the ARC to select and fund high-calibre research.

Way back in 2000 during the debate about the establishment of the ARC as an independent statutory agency, I noted in this House that the ARC would be a provider of strategic policy advice to the government on matters related to research. This is not changing under the new arrangements. The College of Experts will make funding recommendations to the chief executive officer, who will in turn provide me with advice. This will expedite the ARC’s funding processes, provide greater certainty to researchers about the future of their ARC funding and allow the ARC to respond quickly and flexibly to emerging priorities.

I note the debate in the House last month surrounding the National Health and Medical Research Council Amendment Bill 2006. Some seem to think that the changes to the NHMRC and the ARC are wildly different. In fact, where the ARC and NHMRC have similar functions, the proposed governance arrangements of the ARC and the NHMRC will be similar. In both cases, it will be the minister who will be responsible for accepting or not accepting the recommendations of the chief executive officer. In both cases, it will be the chief executive officer who receives advice on the competitiveness of research-funding proposals.

The NHMRC will also have some governance arrangements that differ from the ARC. For example, the ARC does not have a committee comparable to the Embryo Research Licensing Committee, and nor should it. The ARC is also not required to issue regulatory guidelines. These arrangements make it necessary for the additional level of independence from the minister that those specific committees have.

The changes to the ARC and NHMRC indicate that the outcomes of the recommendations of the Uhrig Review are being effectively implemented by government, ensuring clear lines of accountability from the minister down to the agency, and implementing better corporate governance in the public sector.

As announced in the 2004 $5.3 billion package Backing Australia’s Ability, the Australian government signalled its ongoing commitment to the role of the ARC in the national innovation system by continuing to maintain the doubling of its program funding that was announced in 2001. Under the package, the government committed an additional $1.5 billion over five years for the ARC to 2010-2011. This commitment reflects the value and importance to the Australian government of funding high-quality research and maintaining the integrity of the ARC. I commend the Australian Research Council Amendment Bill 2006 to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.