Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

asked the Minister for Health, in writing, on 24 October 2019:

1) Is it a fact that expenditure on health and medical research through the National Health and Medical Research Council and Medical Research Future Fund equates to 0.53 per cent of total health expenditure; if not, what is the Government's expenditure on health and medical research as a percentage of the total health budget for 2018-19.

2) Does the Government accept the recommendation of the 2013 Strategic Review of Health and Medical Research to increase investment in medical research to 3 per cent of total health expenditure and what steps, if any, is the Government taking to meet that target; if not, why not.

3) Does the Government accept that an increase in expenditure on medical research will lead to better health and economic outcomes; if not, why not.

Greg Hunt (Flinders, Liberal Party, Minister for Health) Share this | Link to this | Hansard source

The answer to the honourable member's question is as follows:

1) The Department of Health is unable to reconcile the 0.53 per cent figure from the honorable Member's question.

In 2018-19, Commonwealth total health expenditure was $100.7 billion and the Medical Research Future Fund (MRFF) and National Health and Medical Research Council (NHMRC) expended a combined $1.2 billion. As such, the sum of NHMRC and MRFF expenditure was 1.14 per cent of total Commonwealth expenditure on health for 2018-19.

The sum of NHMRC and MRFF funding does not represent the total Australian Government support for research and development provided to the health and medical research sector.

The Australian Government provides substantial support for health and medical research and development including through its support of tertiary institutions through Research Block Grants and through the Research and Development Tax Incentive. Details of the Australian Government's approximately $9.6 billion contribution to research and development (2019-20) are available in the Science, Research and Innovation tables (SRI tables) published by the Department of Industry, Innovation and Science.

The SRI tables attribute $1.47 billion of R&D funding to the socio-economic objective (SEO) of health for 2018-19. This figure is a conservative estimate of total Commonwealth Government spending on health and medical research as it does not count, for example:

It should also be noted that all research block grant funding in that document is attributed to the SEO 'General advancement of knowledge'. Based on Research Australia's estimate that health and medical research accounts for one third of all R&D expenditure in higher education institutions, and 2018-19 research block grant expenditure estimates published in the 2019-20 SRI tables, approximately $700 million of research block grant spending could be attributed to health and medical research.

Combining this attribution of research block grant funding with the published figure of $1.47 billion gives a total of $2.17 billion for health and medical R&D. This represents a total of 2.2 per cent of total Commonwealth expenditure on health.

It should be noted that disbursements from the MRFF are projected to nearly triple over the period 2018-19 to 2021-22, which will increase the Commonwealth's contribution to health and medical research as a proportion of health spending.

2) The Australian Government is committed to funding health and medical research and building a strong, sustainable research sector and industry more broadly.

The Australian Government established the MRFF to provide grants of financial assistance to support health and medical research and innovation to improve the health and wellbeing of Australians. The MRFF operates as an endowment fund with the capital preserved in perpetuity. At maturity, the MRFF will reach $20 billion. It is estimated that MRFF earnings will reach $650 million by the end of the forward estimates. Increasing earnings from the endowment fund will result in higher disbursements.

In the 2019-20 Budget, the Government announced its continued commitment to supporting lifesaving medical research with a $5 billion 10-year investment plan for the MRFF. It will place Australia at the leading edge of research in areas like genomics and will support the search for cures and treatments, including for rare cancers.

The MRFF complements the National Health and Medical Research, which will provide around $850 million in funding for health and medical research in 2019-20.

The Government has also established the Biomedical Translation Fund (BTF), which comprises a $250 million contribution from the Commonwealth, more than matched by private capital, to form a $501.25 million fund to fast-track investment in late stage medical innovation of commercial potential. As at the end of September 2019, BTF Fund managers had invested $150.20 million in late stage research including for the development of an artificial heart and for the development of a drug to treat kidney disease.

In addition to direct health and medical research funding, the Australian Government supports health and medical research and development through a range of programs as mentioned in the answer to (1).

3) Health and medical research improves and saves lives, plays an essential role in health system improvement and is leading our innovation economy.

The Australian Government is committed to ensuring Australia is a health and medical research powerhouse.

Health and medical research has been identified as one of the key pillars supporting the health system and is essential to building a stronger, sustainable health system.

The above reasons contributed to the Government's decisions to boost the health and medical research sector and the Medtech and Pharmaceutical (MTP) industry more broadly through the introduction of the MRFF and BTF. In the 2017-18 Budget, the Government launched a National Health and Medical Industry Growth Plan, which aimed to:

According to the Industry Growth Centre for the MTP Industry, MTPConnect, the MTP industry supported an estimated 70,000 jobs in 2018, including 26,650 in research, an increase of 6 per cent since 2016. In 2018 it was responsible for $6.5 billion in exports (up 12 per cent since 2016) and had market capitalisation of $129 billion (MTPConnect Sector Competitiveness Plan 2019).