Thursday, 24 June 2021
Industry Research and Development Amendment (Industry Innovation and Science Australia) Bill 2021; Second Reading
I present the explanatory memorandum to this bill and move:
That this bill be now read a second time.
Today I am pleased to introduce the Industry Research and Development Amendment (Industry Innovation and Science Australia) Bill 2021. The amendment will officially change the name of Innovation and Science Australia (known as ISA) to Industry Innovation and Science Australia (known as IISA).
Since 2016, ISA has provided strategic, whole-of-system advice on the government's investment in science, research and innovation, with a view to enhance the performance of Australia's innovation system.
As the government's premier strategic advisory body on industry innovation, the refreshed IISA will play a pivotal role in guiding and advocating for government policies and programs to drive economic recovery and growth—in particular our $1.5 billion Modern Manufacturing Strategy.
The passage of this bill renaming ISA to IISA therefore marks a simple but significant step in implementing these transformational policies.
The inclusion of industry in the name is an important signal to stakeholders in both the private and public sectors.
It acknowledges the critical role that innovation and science play in enabling competitive Australian industries and driving a productive, resilient and prosperous economy.
It highlights our commitment to seeking the best expert advice on these matters; to supporting genuine and practical innovation in Australian priority sectors; and to ensuring sovereign capability and industry resilience—particularly in light of the COVID-19 pandemic and the need for quick and robust economic recovery.
The passage of the bill will underscore IISA's function as a direct voice for strategic industry input to government on policy development, implementation and evaluation. The name change is backed up by recent appointments to the IISA board with strong Australian industry experience and networks, and an updated statement of expectations for the board's work going forward.
Finally, the name change also clarifies the role of IISA in relation to our other expert advisory bodies, such as the National Science and Technology Council, allowing for more effective and productive collaboration in future.
I commend this bill to the House.
I rise to speak on the Industry Research and Development Amendment (Industry Innovation and Science Australia) Bill 2021, and I note the comments of the minister. It's one of my great privileges to be on the industry, research and science committee with the current Deputy Prime Minister and previous chair of that committee, the member for New England. We're currently undertaking an inquiry into the space industry. I note that this piece of legislation is not particularly controversial, and it has not significant changes. That's why the Labor Party will be making some contributions. I know that Ed Husic will be leading some of those contributions. I will leave my contribution there.
I rise to speak in favour of the Industry Research and Development Amendment (Industry Innovation and Science Australia) Bill 2021, which amends the Industry Research and Development Act 1986, or the R&D act. I acknowledge at the outset the administrative nature of the bill and the legislated name change of the independent statutory body. But I feel the need to rise because I'm so passionate about this area. The new name, Industry Innovation and Science Australia, reflects the updated focus of the body on Australian industry and particularly the Morrison government's very clear approach to making Australian industry stronger and more competitive as we continue to recover from the impact of the COVID-19 pandemic. I think that, in the COVID-19 pandemic, we've probably never seen more pivoting going on in our country. When we look to R&D and innovation, we know that industry has partnered beautifully with the excellent medical research and health innovation that occurs in this country. I welcome the fact that this name change will help to better formalise this sort of arrangement. Words do really matter, particularly with relation to signalling to the wider community and stakeholders that industry is vital to our economic recovery. Industry and innovation complement one another, hence the rebadging of the body.
This legislation is not purely an administrative move. This change reflects the Morrison government's acknowledgment of the critical role of innovation and, more importantly, science, and it reminds us what science is truly about: knowing more, so that innovation can prevail in the products that can be consumed by the general populace that increase efficiency and quality of life for all. For this, there must be clear links between science, innovation and industry, and this bill allows and, in fact, encourages and fosters those links. I have spent my life in science and I understand how important it is that we bring that diversified mindset to the way that we solve problems for the world. The taxpayer knows this, and wants it and deserves it. As the government's leading strategic body on industry innovation, the remodelled IISA will play a pivotal role in guiding government policies and programs that will drive our economic recovery post COVID. Our government values the role business and research collaboration play, and we want to strengthen that collaboration.
If you look to the medical research institutes of Australia, you'll see that innovation mindset, and that is because they understand the resilience and resourcefulness that is needed in a constrained economic environment. We as a government know that, with the direct input of industry professionals, our economy will rebound even faster. It will enable us to grow stronger and to build higher-quality skilled jobs. This is becoming even more important in the 21st century, as we pivot again and again to a knowledge economy. We are determined to drive our innovation industry agenda forward with our $1.5 billion Modern Manufacturing Strategy. As a scientist, I welcome this strategy. I'm acutely aware that the strategy this government is taking towards innovation in industry is for industry by industry. This plan will see the creation and development of internationally competitive manufacturing businesses that will focus on six key areas, and these have been chosen because they are building on the shoulders of the greatness of these sectors. The six key areas are, of course, medical products, resources technology and critical minerals processing, space, defence, recycling and clean energy, and food and beverage production. These are the issues that are important for Australia's future. Each area has a road map allowing our country to strengthen its manufacturing capability.
The budget handed down this year by the Treasurer will see a restoration of business confidence and lower energy costs, as well as an aligning of research and research capabilities and programs to priority areas. The Modern Manufacturing Strategy we announced last year forms part of our JobMaker plan, which is already seeing real benefits flow through to our economic recovery. There is no doubt that this government's record of handling the economy, particularly in the recovery phase of the pandemic, has been first class. With prepandemic levels of unemployment rebounding, our economy is roaring back, and the government is only just getting started.
We cannot be complacent. Our manufacturers are still facing difficulties, but this partnership between government, industry, science and the research community will help solve the problems that they face and give them confidence to be competitive and productive. As I said in my first speech, we need to be a smart economy. Our businesses need skilled and productive labour, low energy costs, a fair industrial relations framework, a competitive taxation system, efficient regulatory mechanisms and favourable trade arrangements. The Morrison government promises to continue to provide this agenda to our hardworking Australians.
The Morrison government has made a clear commitment to ensure research and science are supporting industry growth. This is being done by a further investment in 11 rounds of the highly successful Cooperative Research Centres Projects. These funding grants for industry-led research collaboration really do kickstart these partnerships and are the glue between these collaborations. Through this scheme, businesses are funded to develop a product, service or process that will solve problems for industry and deliver real outcomes. Real outcomes are the focus of our government, as we believe plentiful, good-paying jobs in growing industries form the foundation of a future with a strong economy.
Successful grants that have gone to businesses and have already been undertaken for the cooperative research centres include those to businesses converting food into compostable stretch wrap; businesses upcycling waste including plastics into bricks, fuels and other materials; businesses that are increasing the affordability of gene therapy and vaccine productions; and even businesses that are making joint reconstruction surgeries more affordable and accessible. In medical research we often say, 'If you haven't published, then you haven't actually made an impact.' They've moved now to saying, 'If you haven't patented, you haven't made an impact.' But I'd go further and say, 'If you haven't made a product or a policy, then you haven't made an impact.'
These are just a few examples of businesses pursuing innovation, and that has the support of the Morrison government. Without this funding, these businesses may never have been lifted off the ground nor have been able to make the significant impact to the world we live in. Moreover, the government's research and development tax incentive allows companies to innovate by offsetting costs of crucial research and development. Over $2 billion has already been invested in businesses every year through this program, and Australian manufacturers have been the largest sector to have benefited from the scheme.
In addition to the change of the name, this legislation formalises other measures, including new members and a new mandate for those members of the new IISA. Last October, the government announced five new members were being added to the reinvigorated agency, including CEO of DuluxGroup, Patrick Houlihan, and Woodside Energy's Lauren Stafford. Patrick and Lauren have been appointed to the board for three years and will be joined, as new members of Industry Innovation and Science Australia, by fintech and consumers rights expert Scott Farrell, space technology entrepreneur Dr Alex Grant, and internationally recognised agtech innovator Sarah Nolet—and it's great to see gender equity in this area. This eclectic group of appointments brings a wealth of industry depth and experience but, importantly, fresh and modern thinking.
The Morrison government is putting industry firmly front and centre of its economic recovery plans. These are pragmatic, practical, sensible approaches to building jobs into our new future. We know that the jobs of tomorrow will be decided by the leaders of today. We know that the role industry plays in innovation and science is critical to the success both of those initiatives and of others. This legislation is necessary to ensure our economic recovery looks to the future through the lens of innovation and the role industry plays in revitalising our economy.
At the outset, I want to flag that Labor is not going to oppose the Industry Research and Development Amendment (Industry Innovation and Science Australia) Bill 2021, because this bill is a do-nothing bill. There would be as much value in opposing this bill as maybe opposing it on the grounds that we didn't like the font.
This bill does one thing only: it puts one word into the existing title of a government agency or body. It was called Innovation and Science Australia and now it will be called—ta-dah!—Industry Innovation and Science Australia. That's the big reform! The most substantive reform on innovation that's being put forward by this government is a name change. It's marketing—who would have guessed that the big push in innovation by a government led by a marketer is to do a name change? It's a brand change—a brand refresh, as those advertisers like to refer to it—and that's it.
This is laughable for any of the speakers who will speak on the bill after this. Bear in mind that in this session of parliament, which we started in February and are finishing today, the most substantive bit of legislation on innovation—the biggest thing that they've done on innovation, an activity that's required desperately so that we can rethink and re-conceive the operation of the economy in this country post pandemic—is this bill to change one word in in the name of an existing body. It's laughable! What will happen is that every government speaker on this one bit of legislation is going to go on about the importance of innovation, its value to the economy, the way they support manufacturing and all the things they do, and this bill does nothing about that—not a jot! Nothing in this bill advances that agenda, maybe other than that a printer will get a bit more money out of the government to reprint letterhead and some business cards, and a web designer will redo the website. That's all they're getting!
Let me make this clear: in making these criticisms, I'm not criticising the people who are involved in ISA. The people who are involved now, or in the past, are great contributors in advancing the innovation agenda in this country. They've done a lot of good work in times past and nothing of what I say in relation to this bill in any way, shape, form, word or anything should be seen as a reflection on their contribution. In fact, we celebrate what they've done and we champion too their ability to contribute—some of the people who are there or have been there. There was Atlassian's Scott Farquhar for one. I've said to him previously that we're very grateful for the consideration and thought that's been given to the work they produce, amongst a range of other activities which are done by ISA or, after this bill goes through, IISA.
That's not my criticism; my criticism is that the government are absent from a serious agenda for innovation. They have no clear objectives about what innovation will do, what they're doing in terms of innovation and how that will help to work with the business sector, education partners and others to advance innovation in this country. There's no broad game plan on how to advance innovation in this country through this government. All we have is advertising and marketing; we have nothing substantive underneath that. Exhibit A in the prosecution of that case is the bill itself. Again, like everything the government does, this bill is light on policy but very heavy on spin.
Apart from renaming the bill, there will be some consequential amendments to other government legislation. But all those amendments are doing is recognising the fact that the name has been changed—changes have to be made to other legislation to reflect the name change. This won't advance the interests of industry, it won't increase innovation and it won't prioritise scientific research in this country. Instead of substantive investment in Australia—in our ideas and in our innovation—the government creates cheap slogans and cosmetic spin. On the government's watch, what this spin cannot avoid us realising is that Australia has fallen three places to No. 23 on the Global Innovation Index. For example, their existing Entrepreneur Program has achieved little more than funnelling millions of dollars to multinational consulting firms.
Australia is home to many incredible companies and firms, but our innovative ideas languish with one of the lowest startup formation rates in the world. We've got to be more ambitious. We've got to commit ourselves to bring more great Australian ideas to the global market. At this point in time we have a Prime Minister whose big argument, when reflecting on, for example, the digital and tech innovation space, was that the country should adapt and embrace other people's ideas quicker, that this is the way that we will work better, faster and in much more efficient ways. Well, I would actually argue, and I think that a lot of people in the Australian innovation space would argue, that Australian ideas should be able to be championed on Australian soil and then projected into the international marketplace to make a difference elsewhere. The Prime Minister's great ambition is that we are the best consumers in an app store, rather than having the ideas on that app store that're taken up by others. That is probably the worst indictment of this government, that they think we will just be takers of other people's ideas, not makers of great ideas and see that develop in many other ways. We do need that to happen. We do need to see a lot more of the conversion of the ideas into reality.
We've had 60 or so reports on commercialisation that've languished. We had two more done by this government, and by different ministers—they weren't even talking to each other—on commercialisation. We had an industry minister do one report and an education minister do another. They were totally doing their own thing without even collaborating to ensure that we could deal with a long-running problem in innovation in this country. When you look on the Global Innovation Index pretty much every report says we have a lot of great people. The human capital element is very strong in this country. The conversion of the ideas into the concrete, commercialising them, is core. What we don't need is more reports. What we need is action. We don't need name changes. We don't need reports. We actually need to see changes in what's happening.
On some of the stuff that is working in this government's favour they don't want to support it. They had a report, for instance, that they commissioned into their own Industry Growth Centres that are thinking a lot about how to apply innovation within an industry context and deal with some of these issues. They won't release the report. We, as an opposition, have been calling for the government to release a report that says good things about their own initiative. That's an innovation in itself—that the opposition would be calling on the government to release a report that reflects well on themselves. They won't do it. Why? Because it runs counter to their ambition, or should I say their game plan, for those growth centres. They want to kill those growth centres off.
For example, the Advanced Manufacturing Growth Centre is supporting innovation in important areas like hydrogen storage systems, smart factory advancements, robotics, lithium battery development and production. They've been responsible for funding important advancements in COVID-19 testing—an area where the government's failed astoundingly—but the government doesn't want to fund them. Why? Because this is a government that wants to take money out of a successful program where the decisions get made by industry and they want to put it into their own grants program. In this case, the Modern Manufacturing Strategy that has got $1.5 billion that has been put there. The government wants the department—by that, remember when it's the department it's the minister. It's not the government or the bureaucracy; it's a political aspiration to ensure that money is diverted in the way they think works for their political advancement, not industry and national advancement. This is what's going on. They defund existing successful programs. They don't release the reports that say they're successful programs. They defund them. They pick up the money. They put it into a grant program so they can then spend in a way that they think works for their political interest.
For anyone who thinks I might be slightly cynical on this point, let's just go through the roll call: sports rorts, road rorts, regional funding rorts. We've had the way in which land has been disposed of—being sold to political donors. We've seen all this stuff happen continually.
The bushfire rorts as well, as the member for Macquarie has rightly pointed out. This government has a track record of rorting that is an absolute national shame. They know it's bad, because they won't set up a national integrity commission to stop that kind of behaviour. After all the publicity on the way they have misused our taxpayer dollars, the embarrassment and the shame that has been heaped on them, you would think that they would learn the lesson. You would think that they would do differently. But what do they do? They go: 'No, we've got one better. We've done sports rorts, roads rorts, regional funding rorts and bushfire rorts. Now we're going to have manufacturing rorts, where we'll just spend money in that way.' This is terrible, and it undermines the faith people have in the way these vital government dollars could actually support industry evolution and the growth of manufacturing in this country, which has been under huge pressure.
When we went through the pandemic and we couldn't get the things that we thought Australia should have the capability to manufacture onshore, and when we realised the way in which global supply chains were letting us down, we thought: 'You know what? We're not just going to go back to normal; we'll do better. We'll actually build a modern manufacturing sector in this country that can deliver on a wide range of projects.' In the Labor Party we don't think that it should be just niche manufacturing. It should be, where we can, manufacturing at scale. We in the Labor Party believe in manufacturing, because the reality is that these sectors generate predominantly full-time, sustainable jobs, and they deliver value in the Australian context for the Australian economy here and beyond. They are very important to follow up.
The government have put forward $1.5 billion, but then they announced all these side programs that continually diminish the funding impact that the program has by continually slicing off small sections of that funding in such a way that we would raise questions as to whether or not the program will achieve its intended purpose at all. We think that the government's intent of having more discretion and more control over where innovation funding goes, instead of having industry peak bodies make decisions using their experience and expertise—we are very concerned about where things are headed in relation to that. It's very troubling knowing, as I said, this government's history of rorts. We have little faith that the extra cash will go into kickstarting the innovation ecosystem. Unfortunately, with this model, the likely outcome is that the money will sit there unadministered, and we've seen that at scale with the way, for instance, the government announces billions going into things like infrastructure investment and then, on an annual basis, there's a $1.2 billion underspend. We don't need the same thing happening in the innovation and industry space. We need to see, for instance, more of that lead into the support and the growth of the manufacturing sector in this country.
We would also hope that we could, in the middle or at the outset of a pandemic, see the manufacturing of mRNA vaccines onshore. That is manufacturing that would make a difference to Australian people. In New South Wales, people are genuinely worried about the prospect of a lockdown. Victoria has had to go through lockdowns as well, and other parts of the country are now shutting their borders to prevent travel, and we're going into, again, a period of enforced hibernation, because, understandably, governments want to protect the population from getting COVID and, in particular, the delta variant that has been going around. We need to be agile in responding to putting out vaccines that can best combat that variant of COVID.
Now, when we asked the industry department when we could expect to see domestic manufacturing of the vaccine, we were told it could take, if it were a greenfield site, up to four years. Bear in mind the previous industry minister said nine months ago that in nine months time we would be in a position to potentially announce the manufacture of mRNA vaccines in Australia within the space of 12 months. The new industry minister, I might say, is just marking time. This bloke's heart is not in this job. He is just marking time. Bear in mind we've had Minister Macfarlane, Minister Pyne, Minister Hunt, Minister Sinodinos, Minister Andrews and now Minister Porter—an average shelf life of 330 days, less than a year, in the job! This new minister reckons, in answers to questions put by the opposition during question time about domestic manufacturing and when we can expect to see it: 'It could be four years, but it could be 13 months. It could be anywhere between 13 months and four years.' This is not a small range. If it were between 13 months and 18 months, sure. But between 13 months and four years is when we can expect, potentially, onshore manufacture of mRNA vaccines, at a time when parts of the country are genuinely concerned about the prospect of a lockdown.
Again, it reminds us that this government had two jobs to do—vaccine rollout and national quarantine. On the vaccine rollout, they so fundamentally stuffed it up. The thing is that state governments get it too. It doesn't matter about the political hue of the government at the state level; both expected that the feds would step up on the vaccine rollout, and they didn't. They both expected that the states would see national quarantining being put forward. It didn't happen. On the manufacture of local vaccines: this government can't get its act together and can't tell us when, between 13 months and four years, we'll see domestic manufacture of COVID vaccines in this country that can cater to emerging variants, to protect the population of Australia. We just have guesswork being done. They are bungling securing the vaccine in the first place and manufacturing it in the second place. This is not good enough. And their big idea on innovation is a name change. That's all they'll do. They won't support and advance how to use innovation not only to protect the nation through the pandemic; they cannot put forward ideas on how to re-gear an economy that has been pummelled by the pandemic. In particular, they've got no idea about where the economic consequences of this pandemic affecting societies globally will go.
The government lurch from idea to idea. They don't provide a robust form of support for manufacturing in terms of their strategies. They get rid of other successful strategies that they have because they don't suit their political interests. They can't manufacture vaccine in this country in a way that our people would expect. And then they lurch to the next shiny thing in the biotech and medical space, thinking that it'll help and that this is an innovation they can import from overseas. Again, the Prime Minister thinks that the best thing that we can do for innovation in this country is copy someone else's.
So now we've got the next shiny thing—patent boxes, which is just the latest idea the Treasurer picked up on one of his trips over to the UK, when we could actually do that. He's brought it back and thinks that if we give this tax incentive it will kick start R&D in this space. Mind you, they wanted to rip out $2 billion from R&D. The innovation that they came up with in this space was to not do the funding cut. The innovation, if I can add, is for them to now spruik, 'We've put $2 billion into R&D because we're not going ahead with the cuts that we thought we'd do.' That's their big innovation! That's what they go around and spruik. And then, on top of that, they put forward a patent box idea. We in the opposition will genuinely leave our minds open to the patent box scheme that's been put forward—which, mind you, this government haven't actually stepped forward and given us details on, but let's see what they reckon works; let's see how their plan will make it work onshore. But we remain to be convinced on whether or not this will actually work, because patent boxes have not been universally embraced as a way to drive innovation in different countries. But we remain open; we will talk with industry on this and see what can be done. So, on those things, we think that the government does have a lot to explain as to whether or not that will also translate into something meaningful. Again, if we go through all of the innovations of this government and what they've put forward, they put forward equity crowdfunding to help finance new innovation, but we have no idea about how that's going. They put forward tax incentives that they thought would drive innovation, particularly early-stage innovation through angel investment, and we've seen angel investment contract for three consecutive years. They talk about employee share ownership schemes and reforms to them. They still haven't brought forward the legislation to prosecute those schemes. They've now announced that they'll put in patent boxes, but there's no detail about where that will go, and it's just embracing someone else's idea. They said they'd fund mRNA vaccine manufacture onshore. We don't know whether it's going to happen within 13 months or four years. We haven't seen that. We have a modern manufacturing fund that could only generate 79 jobs for $79 million in the first round of funding. So we've got a long way to go. We think innovation will be critical in terms of regearing and reimagining the economy. I move:
That all words after "That" be omitted with a view to substituting the following words:
"whilst not declining to give the bill a second reading, the House:
(1) notes the jobs and economic growth generated from a robust innovation ecosystem; and
(2) condemns the Coalition Government for its continual failure to back Australian industry and innovation, particularly to deal with challenges arising from the pandemic".
Certainly, in our second reading amendment, whilst not declining to give the bill a second reading, we note that the jobs and economic growth generated by a robust innovation ecosystem are important to the country. We also condemn the coalition for its continual failure to back Australian industry and innovation, particularly to deal with the challenges arising from the pandemic. The amendment has been seconded by my friend and colleague the member for Macquarie. We think that it's important to put that forward because this is a moment in time where we can use innovation to rethink the way that we work and to show that we back Australian ideas. We have faith in this country's heritage. We live on an isolated continent with a small population that has been separated from major supply lines in many times past, so we have had to think through the ways to get things done and we've had the people that have been able to find the ways.
But we do need to make sure that government regulations and laws in this country support that, that the funding is there to help back that, that the private sector is there to step up in greater part to believe in that, that our training systems build up our human capital to improve the quality of ideas and that we have a translation of that in a commercial sense for the benefit of the broader economy. I am moving my second reading amendment so that we can have that type of debate or that elements of the debate covered off in here. As I said, we think with the fact that we've got history in terms of ideas being translated into reality means we can do better. We also have the emergence of other developments, such as AI and robotics, so that on issues of national concern we could apply and improve the way that the economy is working. For example, if you look at agriculture, these huge labour shortages cannot be ignored, because they are affecting the productivity and performance of agriculture in this country. We know it can perform better and we should be applying ourselves to national problems like that. Clever people using AI and robotics in thinking about farm redesign could, for instance, find new ways for agriculture to be performed in the absence of labour at the time it's needed. That's the type of innovation where, if we applied ourselves, we might make a difference to communities in regions across the country. That's what should happen.
It's not going to come out of a name change. It is not going to occur because we inserted 'industry' in the name of the former Innovation and Science Australia. It will require government, business, academia and others to make it happen. Labor's got a positive agenda. I'll highlight in the moments I've got remaining that we have the National Reconstruction Fund of $15 billion to help drive the reimagining of Australian industry in this country. We've also announced a start-up plan that will provide $11,000 to university students working with university accelerators to create 2,000 new enterprises in this country that can tackle some of those national problems, either in the economic space or social impact enterprises that we think can make a difference to the quality of life in communities. We need imagination and dedication to deal with this. We don't need marketing and spin.