National Press Club Science Debate

Kim Carr - Shadow Minister for Science and Research, Shadow Minister for Industry and Innovation, Shadow Minister for the Public Service

Chair:

Ladies and gentlemen, welcome to today's National Press Club Telstra address. We're very pleased to welcome this very large audience in this room as well as the broadcast audience to an event, which has become one of the outstanding public relations successes of recent years in Australia. The Science Meets Parliament Week, of which this is the middle has become one of those events which has expanded I think beyond most people's expectations, just like the lighting which has made all those people gasp. There's something like 240 / 250 scientists in Canberra this week to lobby about that number of members of Parliament and Senators, perhaps a little less – about 150 or so – and that's been going on now for the last few years under the auspices of the Federation of Australian Scientific and Technological Societies and I don't think you could regard it as anything but an outstanding success. Today, to mark this week, we have the Government and Opposition representatives who are most targeted by that sort of activity. The Minister responsible for science and the Shadow Minister responsible for science are both going to talk to you today and then answer questions. We've agreed we weren't able to consult you all but I'm sure you won't mind that. But they'll each make an opening statement of about five minutes and having listened to each other they'll make a couple of minutes response to that and then we'll launch into questions and you'll be able to do much the same sort of thing – ask one or the other or both with your question. I didn't actually check with each you who preferred to go first. Who's going to open the betting? The Minister will go first. Please welcome Peter McGauran

Peter McGauran:

Thank you Ken, my colleague Senator Kim Carr, the President of FASTS, Chris Fell and many distinguished guests one and all. I'm delighted to be with you and I'm certain that the enormous crowd gathered here today has nothing to do with either my or Kim Carr's pulling power, but instead the importance of science and the mission that you so willingly and enthusiastically undertake over the next couple of days and which will produce such tangible, concrete results.

We are meeting in this, the fifth year, in markedly different circumstances than from the first year of Science Meets Parliament in that science and innovation is at the centre of government activity and public policy formation and is a mainstream issue for the community. You will experience in your meetings with Senators and Members a serious engagement at a time when Members of Parliament, on behalf of their constituents, will drill you on a number of issues of concern to them and the wider community. Members and Senators previously were looking to you as representatives of the science engineering and innovation community to raise the profile of science and awareness and to increase the level of awareness. That is not the case in 2003.

They will seek from you information and they'll also elicit from you your agenda for the future, your interests and even your concerns. That has been aided by the Government, which has increasingly put science and innovation at the crossroads of all government activity. Now much of that has been driven by the community out of need and necessity to tackle the great environmental and health and industry and economic issues of our time. The community is ambitious for the country's future and the prosperity for their children and their grandchildren and they look to science and innovation in a way they never have before to provide many of the answers, solutions and also to increase a more efficient and vibrant economy. So the Government has shown a deep commitment to science and innovation.

The Prime Minister has led this. He has said many times from someone with a Liberal Arts background, one of the most enjoyable and educational aspects of his Prime Ministership has been to come to a new level of awareness and appreciation of the role of science and innovation. The Prime Minister's Science Engineering Innovation Council, which he religiously and enthusiastically chairs twice a year, is testimony to that fact. It is a major influence on government policy and has the participation of nine Cabinet Ministers, including its most recent addition, the Deputy Prime Minister, John Anderson, who asked to join the PM's sect given its influence on the Cabinet and the Government at whole. Also the Chief Scientist, Dr Robin Batterham, has also contributed enormously to a new era of government support for science and innovation.

This has resulted in Commonwealth spending this financial year of $5.4 billion. That is a record spend. We don't see, of course, the job having been completed. There's no complacency let alone smugness about our approach to science and innovation, nor should there be, but we will not fully appreciate the change – and I've been Shadow Minister or Minister for Science since 1989 – in the role and importance and centrality of science innovation if you don't examine Backing Australia's Ability. That was brought down in January 2001 and it radicalised the way government approached science and innovation, not just in regard to funding because it represents $3 billion over five years of new money, but also how government enlists the support and involvement of the science and engineering community, working scientists like yourselves, and translates that into public policy.

Backing Australia's Ability has directed programs across the board. It is a strategic whole-of-government approach to science innovation policy. Too often in the past, as Barry Jones complained on so many occasions, science and innovation was something of a curiosity, even an oddity put to one side of government. Backing Australia's Ability, when you look at it, involves the Departments of Environment, of Industry, of Education, of Communications, Health, Agriculture, Transport and the like, all of whom had a part in the drafting of Backing Australia's Ability and are currently involved in now preparing the ground for Backing Australia's Ability No. 2.

We have a menu of programs, which are funded as I say to the extent they are, believing that there's not one prescription that will fit every circumstance. The emphasis is on collaboration and commercialisation, both within public sector research agencies and universities, and greater industry linkages. So there are incentives to industry to take up the research from the public sector, to transfer it out into the marketplace as well as provide incentives for new investment by the private sector in innovation – and it's working. The figures released on the 8^th August by the Australian Bureau of Statistics shows that business R&D has grown very substantially - $600 million more than the previous twelve months –

so that business is spending $5½ billion, the largest spend by the private sector in both real and current terms. So again, none of this is to say the job's done. What my submission to you today is, that the job is well underway, that the science and education communities have played a vital role in it. We don't believe we're the repositories of all wisdom. We seek your involvement, your advice and your guidance at every point, even at the risk of exhausting you with a number of inquiries and studies. But we must validate a number of the programs and there's 26 of them under Backing Australia's Ability.

For instance, the Mapping exercise which has been widely circulated to stakeholders. We cast the net very widely to involve people, now to consider the draft Mapping Report. That's not including policy, prescriptions or options – it won't provide a blueprint as such – but it's an excellent example of how it will tell us how the system operates, where the weaknesses are and where government should focus new attention. So we're constantly evolving science and innovation policy, always with the themes of supporting and increasing our investment in the public sector, but developing those commercial and collaboration links with the private sector.

As I wind up I would say that in drafting Backing Australia's Ability No. 2 we are going to look at the range of programs already initiated. They're two and a half years of a five year program underway and the great news is that only 20% of Backing Australia's Ability has been spent to date. Over the next twelve months it will increase to 40%, so the investment in Backing Australia's Ability will be truly felt in the next two to three years when Backing Australia's Ability No. 2, built upon the premise and success of Backing Australia's Ability will kick in even stronger.

Thanks for being part of something of a revolutionary movement in which you engage as working scientists face-to-face with legislators who are genuinely interested but not always genuinely knowledgeable and you w ill give them the confidence as well as the interest to involve themselves even more in the Parliamentary debates and the formation of public policy to the benefit, obviously, of science innovation but, more importantly, to the community. Thank you.

Chair:

Thank you Minister, and to make his opening statement now would you please welcome the Shadow Minister.

Kim Carr:

Distinguished guests, ladies and gentlemen, thank you very much for the opportunity to speak to you today.

Might I begin with a proposition? That Australia's place in the world is not assured. We face fundamental economic and demographic problems. These problems threaten our prosperity. We must improve our productivity. We must improve our research and development performance because this is the key to ensuring a high skilled, high waged economy.

Now it's a pity that despite the extraordinary achievements of our scientists and our researchers, this has often been done despite the failure of government to provide the necessary support. I take the view that government must be an advocate for science and research and must also deliver, and under current circumstances that role is even more important than ever.

Now today the Minister has spoken about the Government's program and in particular the money that is being spent through Backing Australia's Ability. What he neglects to point out is that this money goes nowhere near making up for the cuts that have been imposed by this same Government over many years. As the President of the Academy of Science has recently argued, Backing Australia's Ability was too little and spread over too long a timeframe. In fact we see this Government is basically trying to make good its errors from the past. We, of course, are being told that we should effectively have a short memory. Well I know that we don't.

The fact is that on an international basis our performance is slipping. Australia's expenditure on research continues to decline in comparison to our international competitors. Gross expenditure on research and development has fallen steadily since the period of 1996/1997, while the OECD average GERD (Gross Expenditure on Research and Development) as a percentage of Gross Domestic Product, has steadily increased over the same period. The gap between Australia's expenditure on research and development and the OECD average has effectively widened considerably. Australia's GERD as a percentage of GDP is at 1.53%. This is well below the average of our OECD competitors at 2.1%.

Now it's not just the Labor Party saying this. I draw your attention to the Chief Scientist's views, which are outlined in the report here, the Mapping Australia Science and Innovation. This is a report that has yet to be published. The Minister's spoken of the consultation, well what I think we should be doing now is asking him: where is the report? It's been with the Government since the 20^th August and I say the reason that this Government doesn't wish to publish this report is because its findings are quite damning. The report provides the first official acknowledgement from within the Government of a major decline in our research performance and of course that has been occurring over the last eight years and that's been a result, directly, of government inaction and of course government deliberate action in cutting research to basic public agencies and of course to our universities, where I remind you, 80% of the research is actually conducted in this country.

Now let me quote from this report directly. The Chief Scientist is telling us that investment in and maintenance of Australia's research infrastructure appears to have declined and we are facing significant challenges in building adequate broadband infrastructure. Now I think you all appreciate here, and not everyone here is a scientist, but everyone does understand the importance of our computer networks. We are up to 1,000 times below our international competitors. This is clearly a situation that is not appropriate.

And the report goes on to say that there are signs that our human capital in the enabling sciences and engineering is at risk. There of course has been an absolute decline in the number of science and engineering graduates since 1996. There's been a fall of 6.5%. The citation rates for Australian research has fallen when compared with our OECD competitors – again a direct quote from this report. We are now tenth out of fifteenth of this particular OECD Leagues Table. Now we all understand just how important citation rates are as a measurement of our performance in research.

The report concludes there are indications however that the aggregate – and I quote again:

and quality of Australian science has declined relative to that …"of other countries

So I ask, what will the Government now do? Will they treat this report the way that they treated other research in the Department of Education, Science and Training? Will they try to doctor it up? Will they try to suppress it? I think these are issues that ought to be asked in terms of providing adequate information to our community in terms of the future for this country.

Now I say that this as the Chief Scientist's report clearly demonstrates three things. Our infrastructure is obsolete, our investment in the next generation of researchers is inadequate and we are not training enough scientists and engineers. These are the basic questions that Backing Australia's Ability 2 has to address and we've seen very little evidence despite the fact that we now have twelve separate Inquiries running, that the Government is prepared to face up to that challenge.

Thank you.

Chair:

Thank you Kim Carr. As we've agreed, having listened to each other's opening statement the two opening staters will now briefly respond to those. First of all the Minister, Peter McGauran.

Peter McGauran:

Thank you Ken. Well of course the world started in 1996. The fact that we have a number of inherent issues that stretch over fifteen years seems to have escaped Senator Carr's attention. I was a Shadow Minister for many years so I also know how to extract selectively sentences here or there. For instance Labor's own Knowledge Nation report. Remember, otherwise disparagingly known as Noodle Nation. Their own Table, Investment in Knowledge between 1985 and 1998, almost the entire period of the Labor Party in government fell from 6.47% in 1985 – so this is knowledge – until they left office in 1996 at 6.3%. It decreased in the thirteen years they were … and they've published it.

And of course Kim Beazley also. Go back in history. You've always got to anticipate what your opponent might say, particularly when they have no policy, no ideas. This ad hoc approach to science policy is old fashioned and I'm guilty having engaged in it but some ten years ago.

Kim Beazley as Finance Minister in 1995 cut, cut $20 million from the CSIRO budget. We restored it in 1995 and gave CSIRO an additional $20 million in this year's budget.

Look, I've gone over the OECD charts. We have an inherent problem with business expenditure on R&D. No question. As I said earlier on it's increased dramatically in the year 2001/2002 and that's really before Backing Australia's Ability really kicked in. We expect to see it higher this financial year but it has been chronically underperforming for decades. It is a major issue and not one easily solved given the makeup of our industry and commercial sectors – the size of our companies, the sectors they work in and the like, but it is simplistic to say that we are below OECD rates. We've basically remained the same for the last twenty years including thirteen years of a Labor Government. Our public sector investment as a percentage of GDP is very favourable and increasing in comparison to OECD countries.

In regard to the Mapping report it was conducted on figures before BAA in 2001 started. We have got no later data and it validates Backing Australia's Ability. I'm very happy with the Mapping report. We're not scared of examination. That's why we initiated the Mapping report and several other Inquiries. The figures only run up to 2000. It already shows us that the areas we targeted and selected by Backing Australia's Ability and will reinforce in Backing Australia's Ability 2 were exactly on the mark.

Kim Carr:

Thank you very much. Well I'm pleased that the Minister is now only too happy to release the report from the Chief Scientist because I take it that's what he meant. If he has nothing to worry about in terms of this report he'll be able to provide copies this afternoon. And I won't be surprised if it's methodologically flawed as well.

Now what we're going to find here is a situation where I think nothing that the Minister has actually said has challenged my central thesis. The research is suffering because there is a massive deterioration in our infrastructure in this country. There is quite seriously a problem, which we all concur, that in terms of private sector investment we are falling way behind. Despite what the Minister says about the recent improvement, by international standards we are still way, way behind. The AIG group recently conducted a survey of its own and last year they found that only one in twenty five Australian companies were committing any resources – any resources – to R&D, and of these, many spent more on the electricity bill than they actually spent on R&D. Of those one in twenty five only one in four went anywhere near a public research agency, the university or the CSIRO or bodies of that type.

So what we're basically faced with is a major challenge. Any government, and this is what we will be doing and we're announcing a major statement in this area. A national research and innovation strategy will be announced over the coming period with Simon Crean and myself basically putting forward solutions to the following issues: a weakening of research capacities of our research universities, but also our regional universities; the erosion in our public research agencies; the declining of the national investment in research and development; the slippage in our research performance; a wastage of our national IP; the poor uptake in terms of commercialisation; the imbalance in our national research effort; the decline in the quality of maths and science teaching in our schools; and the failure of Government to effectively coordinate research effort across the Commonwealth and between the Commonwealth and the States. These are the critical issues and what I have heard from the Minister today does not give me any confidence that this government has the competence to actually face up to those challenges.

Chair:

Now you can … I'm talking here to the Minister and Shadow Minister, you can choose your own form of response whether it's at the lectern or from the microphone in front of you, but just before we start on questions, I'd just like to put this to each of you that one of the central themes of this year Science Meets Parliament is the question of priorities. Would you both like to say briefly how you think those should be decided and what they should be, if you don't think that you could decide them by somebody else.

Peter McGauran:

Ken I will take the lectern because otherwise there's a blind spot. I was a former Arts Minister and very conscious of blind spots in the theatre too. Not that, being on the A List, I ever had to sit behind a pillar or a post in a theatre. OK, sorry. Back to science.

Yes of course priorities and in fact we spent much of 2002 in consultation with the science community, with industry and with the broader community to the greatest extent possible in trying to narrow in thematic terms our areas of research. We do try to do too much in Australia and we can't. We do of course achieve world-class standards and do world-class science and our scientists are amongst the best in the world. Wherever you go overseas Australian scientists are well recognised and respected for their work ethic as well as their scientific skills, but we can't spread ourselves too thin.

We had a great debate involving so many organisations. I look around the room and a great many people here were also directly involved in to what extent do you narrow your priorities? And the government took the advice of the science and industry and engineering groups that they should be thematic and consequently we settled on four that the Prime Minister announced in December last year. Firstly environmentally sustainable Australia; secondly promoting and maintaining good health; thirdly frontier technologies for building and transforming Australian industries; and fourthly safeguarding Australia. There are a number of goals – seven or eight – under each of those thematic priorities. The research agencies have submitted to me their implementation plan which I will be going to Cabinet with shortly, as to how they achieve those national goals, which will lift the awareness within the community of the practicality and the relevance of science innovation in their daily lives.

But otherwise agencies should have, and universities and scientists at the work bench, the greatest flexibility and independence to decide their own priorities. There's something about Senator Carr that I can't quite put my finger on in his comments but they sound highly interventionist to me. There's something believing that government can solve or eradicate all issues, all problems whereas we have confidence. If we set the frameworks, we invest in the skills and in the infrastructure and in the programs then I believe scientists will do the rest. So we're not looking to stand over your shoulder in the laboratories.

Kim Carr:

Well thank you very much for this question. Thank you very much. Now first of all let me deal with the question of research priorities. We are of the view that there has to be research priorities. We simply do not have the resources in this country to fund all conceivable options in regard to research. We say however, that doing shifty arrangements behind the scenes with small groups of people involving essentially the select group, without having a proper consultative framework, without actually genuinely involving the community at large in these issues, is not the way to go. I've argued that the green and white paper model is probably a more effective means of dealing with this issue. However I think the wind, fire, air sort of approach that the Government has taken does provide sufficient scope for people to arrange the things.

My concern however, my concern is this. We now have before us a Bill in this Parliament which will seek – and the Minister talks about my interests in the question of national planning. We have a Bill before this Parliament which will allow the Minister for Education to go deep into the bowels of every university and research agency in this country. We have a Bill in this Parliament which will allow the Minister for Education, be it this one or any one in the future, to determine which courses are actually taught, what research projects are actually undertaken. We have a statement this morning from the Minister for Education who says that he won't be funding soft option cappuccino courses. Now you want to talk about intervention. You want to talk about the capacity to micromanage our research institutions. And frankly that to me is what this current debate in the Parliament will boil down to. The fundamental issue in the current debate will come down to this issue – research autonomy, institutional autonomy with a capacity for academic freedom and of student choice because the current Bill is the most interventionist Bill I have seen in education since the 1950s. It is a complete nonsense to suggest that this is a government that's interested in letting people do whatever they want.

Chair:

Well, there's a fairly broad opening session there. Let's move on to actual questions. The first one is from Simon Grose.

Simon Grose:

Simon Grose. I'm here freelance today. Minister I fear I'm going to make a vain attempt to put you on the spot, but I'm going to give it a shot. You'd be aware that the Australian Greens came out with a report last week which argued very strongly that the Chief Scientist, Dr Robin Batterham, had very markedly underestimated the cost of geo sequestration of a ton of carbon in two presentations, one to the Ministerial Council on Energy in November last year and one to the Prime Minister's Science Engineering and Innovation Council, I think in December last year. You're probably also aware that I wrote an article about it that was published on Monday and that the Chief Scientist's Office referred all queries to your office and that your office, after some fudging, referred it all off to Dr Peter Cook who is the Director of the new CRC for Greenhouse Gas Technologies. What I was trying to find out was what Dr Batterham actually said and Dr Cook didn't know. So I ask you here, can you tell me, did Dr Batterham make an error in his presentations to those councils in his estimates of the price of sequestering carbon? And I have a question for Senator Carr. I'm not going to try and put you on the spot because I know that's probably impossible, but I'd like to ask you what role for geo sequestration … research into geo sequestration under a Labor Government, would it have low or high priorities as a way to reduce our Greenhouse gas emissions and secondly, if Labor gets in government would you be appointing a full-time Chief Scientist?

Chair:

Just before you start Peter. I'm sure there's nobody in the room that doesn't understand all this but he's talking about the technology of disposing of Greenhouse gases in effect by injecting them back into the earth.

Peter McGauran:

Thanks Ken, I've always wondered what geo sequestration meant. I don't mean to be patronising or condescending Ken. I don't understand all the technologies and it's our job always to put it in layman's language so you're right. Look, there is a mounting campaign by the Greens and I hope the Labor Party resists the temptation to jump on board, to denigrate Dr Robin Batterham. Make no mistake. They have alleged conflict of interest on his part where no conflict of interest exists. They now allege he provided faulty advice to the Government on the potential pricing of the storage of carbon dioxide and their allegations are purely generalised, non specific. I've given them all the material I believe they need to answer their questions, and I'm not surprised. They have a pathological hatred of the resources sector. They will disparage anybody who might possibly hold out the hope of finding a solution to fossil fuels. They are avowed enemies of the CRC for Greenhouse Gas Technologies. That's where they're coming from, and Robin Batterham just happens to be their immediate and easiest target. Robin Batterham is a working scientist from Industry. He was deliberately chosen on that basis. [Interjection.] No, I'll come to the specific point of your question but it had about five points to it so I'll try and work my way through them as best as I recall them.

So I'm not accusing you of aiding and abetting on the attack on Robin Batterham. Look, there's a very transparent democracy. You ask questions about anything or anybody but they've been answered, but the Greens will never accept the answers and they will pursue Dr Robin Batterham because he comes from the resources sector. We don't believe in a full-time Chief Scientist, we want someone from Industry who can bring that background together with all of the academic and scientific qualifications. John Stocker paved the way and I think Robin Batterham has been a very distinguished successor in a long line of successful Chief Scientists.

Now you did contact my office Simon. We referred you to Dr Peter Cook, CEO of the CRC, on the basis that he could give you the costings as to what the storage of carbon dioxide might be, and as I understand it Dr Batterham's $10, Dr Cook even said in your article, is the ballpark figure. Potentially it could be lower. [Interjection.]

No, no, you posed the question in your article, was Dr Batterham talking about carbon or carbon dioxide? If he was talking about carbon then he was out of the ballpark. Well I've checked the documents – he was talking about carbon dioxide. So Dr Robin Batterham is one of many sources of information, particularly on this issue of geo sequestration. He's not the sole source. We know his background. He brings particular integrity and independence I believe, and I'm sure a great many people gathered here would also, to these issues, and Dr Batterham's estimate is a creditable one.

Kim Carr:

Well thank you very much. On the question of a full-time Chief Scientist our stated position is that there should be one. We frankly believe that there is an appearance of a conflict of interest at the moment and that has to be avoided and has to be put an end to.

Now we can deal with the specifics in regard to the coal industry. Frankly in terms of finding answers to Greenhouse issues we believe that we should be examining all possible options and we should not be confining our attention to any one particular measure. So there should be a suite of measures to address what is a very serious problem.

In regard to the specifics concerning the Chief Scientist at the moment, I believe that first of all I have no reason to have any lack of confidence in the man's personal integrity. There's been nothing put to me that would warrant such a conclusion. However, there are serious questions that have now been raised about the source of some data. The fact that a number of distinguished international bodies have put different sets of data to various public forums is not in itself a problem because it's a nature of scientific enquiry that there will be controversy about research findings. I don't find that in itself a problem. I do however raise an eyebrow when I see that a US Department of Energy and a number of other distinguished sources are challenging some of the assumptions that have been made or appear to have been made. My concern goes to whether or not there has been a declaration of the source of that data and that matter has yet to be clarified in my mind. Equally the failure of the Government to allow Dr Batterham to actually appear before the Senate Estimates suggests to me that this is a totally inappropriate way of actually allowing a senior, a senior adviser to the Parliament, to the Government, to actually carry out his duties because I believe the Chief Scientist could more than adequately put his views in that public forum and ought to.

Finally I'll just say this. That the Government has not provided all the relevant data. A Return to Order was responded to yesterday by the Government in the Senate and they failed to provide key documents. In fact the Minister's representative – I'm surprised he's not aware of this. The Minister's representative in the Senate actually stood up and said that a subsequent statement would be made after consultations with Rio Tinto about the nature of the commercial-in-confidence character, or alleged commercial-in-confidence character of these documents. So there are questions to be answered. They haven't been and there is a motion currently before the Chamber that we call on the Government for an independent Inquiry into these issues. I think that unless we get some satisfactory answers that will be a matter that the Labor Party would be supporting.

Peter McGauran:

Well this is a serious and unexpected turn of events and there's the appearance of conflict of interest. A Chief Scientist, who works and is known for a resources company who declares any specific potential conflict of interest on any of the advisory bodies or committees he sits on, means there is no conflict of interest. It's too cute by half to say there's an appearance of a conflict of interest and the Chief Scientist has never appeared, to the best of my knowledge, I stand to be corrected. The Chief Scientist has never appeared before the Senate Committee. Not Dr Robin Batterham nor John Stocker. It's not part of their role. They're not statutory office-holders. They are contracted advisers to the Government and I don't think it's appropriate. And Senator Carr is making it sound as if it's a big, complex, difficult issue and it's murky.

Senator Brown and now Senator Carr are pursuing one issue. PMSEC had an item of business about a year ago called Beyond Kyoto. One and only one of the sources of advice into the preparation of a paper and presentation for PMSEC by the Working Party was by a consulting firm that Rio Tinto had commissioned. Now that has not been made available at the request of Senator Brown nor at any future request of Senator Carr because that is a commercial-in-confidence document between Rio Tinto and the consulting firm. It was not the only source of advice, it was one of many, and in all these issues you take advice from all different sectors and groups and even individuals. So this is not a complicated, difficult issue. This is simply a personal and very distasteful political witch hunt.

Chair:

Let's not spend the whole lunchtime and I hope I'm not pre-empting the next question on Robin Batterham's currency and future, but the next question is from Jason Consoucus.

Jason Consoucus:

Mr McGauran, Jason Consoucus from The Financial Review. At the weekend your leader, John Anderson, told the National Party Federal Conference that a significant portion of the proceeds of the full sale of Telstra should go towards spending on new services and infrastructure in the bush. Now I wonder whether you as Science Minister will be going to knock on the Treasurer's door in the event of the full sale of Telstra and asking for a portion of that money. Do you think that science deserves a big ticket investment like a few extra billion dollars or do you think that money is better spent on, say, new roads or something like that?

Peter McGauran:

The issue of funding post BAA, and remember it's still got two or two and a half years to run, and as I said the major proportions of its investment are to hit us fairly shortly, are currently under consideration and of course I have a number of issues that I'll be pursuing with the Treasurer and with the Cabinet. There are a number of ideas relating to infrastructure, a number of other gaps identified by the Mapping exercise, so it's an ongoing process. Whether or not the proceeds of a full sale of Telstra will become available and then how they're to be dispersed is something for the future. I hope the not too distant future but in the meantime I endorse John Anderson's comments and I'll certainly be one of the Ministers seeking continued support from the Government for my portfolio interests.

Chair:

The next question is from Verona Burgess.

Verona Burgess:

Now we've got access to your report it's very interesting. Just quickly thumbing through it there seems to be an interesting little drop in the figures of science graduates, and given that you've got Higher Education Bills sitting in the Parliament at the moment that are going to do things like deregulate university fees, and given that there is also in this report an expression of concern about regional activities and infrastructure, I just sort of wondered if you would tell us about how concerned you are about that drop and also how it marries up with the findings of other reports that Senator Carr appears to have got his hands on in recent times to do with the drop in university enrolments.

Peter McGauran:

Yes, I'm as concerned as everybody else gathered here and further afield in regard to student numbers in the enabling sciences. It's an enormous issue in physics and in mathematics especially. We know that. The Government has already taken some action in regard to science awareness programs targeting secondary schools, assisting professional development of science teachers, support of the Mathematics Institute and so on. It is a major focus for us now and into the future. There's a number of factors at play, as you well know – a number of cultural factors. What are young people's aspirations for the future and how are they being taught in schools? We have now the benefit of Professor Quang Lee Dow's report and Inquiry into teaching and especially teaching of science and mathematics. We'll work our way through his number of recommendations. There'll be greater focus into the future on our science awareness programs in secondary and primary schools. It's a big issue. There's no easy answer. It's worldwide. I've had discussions with my counterparts in France, England, Germany, the United States. All countries are suffering at varying levels of crisis, a decline in young people going into the enabling sciences. We all keep coming back principally, if you leave aside the social pressures issue, to teaching. We have to support teachers. Quang Lee Dow's review found that there's a particularly serious problem, and not unexpectedly, in rural and remote Australia. It's an issue that will involve both the Federal and State Governments, but it is a major priority.

Kim Carr:

The Minister has been keen to point out what he regarded as the record of the previous government in these areas and I quote directly from the report from the Chief Scientist and he's saying that there have been relative and absolute decline in awards in science and engineering and related fields. He points out that undergraduate awards to non-overseas students in these fields rose steadily from 1989 to 1995 but have since fallen back from 36,100 to 33,800, a decline of 6.5%. Awards in the physical sciences have shown a consistent decline since reaching their highest level in 1996. Engineering awards have been falling since 1995 and it then goes on about the postgraduate affects. He says occupations that may be at risk in terms of future supply relative to other science and technology occupations are engineering managers, material scientists, physicists, chemists, science technical officers, mathematicians, statisticians, actuaries and IT service managers.

Now what we've got here is a direct product of government policy. We have seen major changes in the higher education system since 1996. A fundamental undermining of the HECS scheme. You only have to go to any school in the country and see two teachers in the staff room – one a science teacher, one a humanities teacher. They pay different rates of HECS. That's a position we will change. Now frankly you'll see these sorts of direct consequences of government policy.

Chair:

The obvious thing that has come out of the last ten minutes is that it's very hard for either the Commonwealth or State Governments or the two of them combined to get a whole-of-government approach to things. How much serious thought goes in to the idea of stopping, really stopping all this business about cost shifting, responsibility shifting, clearly defining priorities? I mean everything we've heard today has components of at least two levels of government and two levels of [end of tape]

Peter McGauran:

… is a growing realisation, particularly in regard to expensive pieces of infrastructure that we need Commonwealth/State cooperation. I wouldn't say immediately Ken, it's a dawning of a new era, but we're certainly doing everything we can. Bio technology for instance is an area in the last twelve months or so where there's been a great deal of State and Commonwealth cooperation to the point where I joined with the State Premiers in Bio 2003 in Washington recently and we exchanged experiences, we supported each other in meetings and in delegations and in presentations.

Kim Carr:

Can I suggest that this is probably one of our greatest areas of failure as a nation in terms of developing a nationally coherent research and innovation strategy. If the Commonwealth spends $5 billion the States are now spending about $1 billion and much of it is about – in my judgement – is about trying to attract investment to a particular State and I think all too often at the expense of another State.

Now I welcome changes in recent times where the States have said that they're not going to compete in the same way about particular types of projects, but they're not going to stop the competition in all projects and that's been quite clear if you actually read the fine print. And we have international conferences where one State will attend with some 300 odd delegates and another State will do similar sorts of things. It's frankly a totally inefficient way of doing business.

But the really big question is the failure of the Commonwealth in terms of its own commitment. We have essentially the Government now acknowledging internally that the expensive public research infrastructure is uncoordinated and unlikely to be efficiently employed. Universities that have achieved the most success in receiving project-based funding are forced to subsidise these projects from funds intended for other important university activities. These project funds fail to cover essential costs. There's no funding growth plan for the training of researchers which will undermine the aspirations of national research and innovation and reduce the number of research training opportunities per capita. Now these are the sorts of reports that the Government has at its disposal. The fact remains that it's all very well to point to the States and say the States aren't living up to their obligations. There is no National Council at the moment to deal with research and innovation issues. There is no Industry Councils meeting. There is no capacity to actually plan a joint Commonwealth/State arrangement. MCEETYA essentially deals with schools and to a lesser extent with universities, but mainly on teaching questions. There is no national approach on research funding and research planning.

Emina Bocha:

Emina Bocha from regional Australia. I'd like to question an assumption on which both sides seem to be agreed upon, namely that we as a small nation cannot afford to maintain research in a broad suave of things – we have to specialise. My question is how do you justify this assumption when given that Ireland, Singapore and Switzerland – whose population together is less than Australia – each have done exactly the opposite, particularly the crisis situation with Switzerland this year where, because of fiscal problems, the Swiss Government reduced its overall budget annually by $4,000 million at the time as passing legislation which increased per annum 6% above inflation money spent on research and tertiary institutions in Switzerland. How can a country which is one-third our size manage to do so much more than we do and not specialise the way you claim we have to do?

Chair:

Well I'd have to suggest to you that a Federation as clumsy as ours would welcome the system of government that all those countries you mentioned have but Peter …

Peter McGauran:

Look, I know it's alluring to look to Singapore and Ireland, but Singapore has the GDP of Sydney, they have no choice but to design their economy and to pick winners and good luck to them, and they don't always get it right. When I first went to Singapore in 1996 they were heavily into the electronics industry. Well that crashed and burnt to a large extent. It's beginning to recover now. So they lost enormously. But when I went there they were saying, you've got to invest, government has got to select the electronics industry. So Singapore does it well for an economy of their size, but they don't have the range and diversity of our economy –they don't have a resources sector or a tertiary sector like ours. So that's the first thing. And Ireland. Well those of us who have been to Ireland know full well that was a massive injection by the European Union, so … [Interjection.]

Canada, no. I wouldn't put Canada at a higher level of scientific innovation achievement than Australia. So look, we support science innovation strongly, we target it, but to go selecting winners particularly rather than the thematic goals that we've set I don't think works nearly so well for us and I don't believe, whatever Carr says, either Government will ever identify a particular technology or discipline or sector of the economy and select it to be funded in a way that we don't more generally.

Kim Carr:

Well, there's two basic propositions being put to us. One, can we afford not to spend substantial sums of public monies in terms of building our national infrastructure, and I say we cannot afford that. I don't care what the size of our GDP is, the fact remains given the nature of our place in the world we must spend, we must develop our national research and development capacity and I think that's the fundamental premise on which I'm approaching this question. Within that the fact remains resources will always be limited, always. There will always be more demand for various research projects than there are funds available.

I maintain the view that there ought be national research priorities, but I also say this: those priorities have to be sufficiently broad to allow blue-sky research to continue. We have major problems in this country, basically. A situation such as salinity, we have aging, sustainable energy. These are a range of big questions which we, I think, have a right to demand answers to and we look to you to provide those. We can't possibly fund every conceivable option within that. Nonetheless it is not our job as politicians to say that a particular project will be funded or not funded. That's not our job. Our job is to provide the resources, provide the framework and the policy settings. There are expert people available with a capacity to determine what is good research and what is not, so we maintain the view we don't want to sit at the bench with scientists or with our humanities researchers. It is not our job to intervene at that level. It is our job to provide the framework and the resources to ensure that the answers to the big questions are actually found.

Phillip Argy:

Phillip Argy from the Australian Computer Society. Just focusing on the relative dearth of private sector R&D investment that both speakers have mentioned, one of the things that private sector says to us as we move around the country is that it's very hard to match up projects that are going on with projects that business and industry are looking for and I'm just wondering whether governments can't explore some more what I would call catalytic activities rather than simply cash, which is always scarce no matter who's in power. Some possibility of something as facile as computer dating type technology to simply match those who are willing to do research projects and those who want them done to see if we can't just better match up and make a pool of R&D out there being Australia's R&D Department so that we can much better match the stuff that business and industry say they want done and can't find people to do it and there are projects out there happening and no one knows they're happening. We just don't seem to be very good at helping the two match up and I'm just wondering whether we can't explore some relatively inexpensive ways of improving the efficiency of matching the R&D with the R&D dollars.

Peter McGauran:

There's two most obvious responses to the question you raise. The first is that more and more of the research needs to involve the end user or industry at an earlier stage, if not from the beginning, and we require that of the research agencies to have genuine industry linkages so that research is not just gathering dust on a laboratory shelf. So that's the first thing, and we're very good at that and I don't think we should beat up on ourselves. That's been happening for many years. This isn't something that started from year zero again, 1996. I'm happy to concede it started well before then. So no, I think we've probably gone – this is a generalisation – as far as we can in requiring our scientists to involve industry from the beginning given the requirement to maintain fundamental research, to build that library of knowledge from which all applied science is drawn.

The second issue is look, we've got a very small venture capital industry in Australia. It's going to grow because some of the tax changes we've made as the Venture Capital Association will tell you. But that's the real problem. I go to many laboratories and the scientists will say, I've got it, I've got the idea, I've got the concept proven. I just need the invest, and that's not easy in Australia. Look it's not easy anywhere in the world by the way. Bio 2003 brought that home to me if it needed to be, where it's fierce competition, it's not for the faint hearted. Some of the universities do it extremely well as you know – UniQuest and UNICEDE and a number of others. University of New South Wales are the highest-ranking players in this regard. They do it very well. They match and mix their researchers with potential investors and with industry and the like. We've come a long way in this regard and always with one eye on the need to preserve our long-term research, but in the end I think it's more than introductions. A lot of it is tax law and incentives and grants and that's why in Backing Australia's Ability there's about seven or eight different forms of such grants or tax rebates, tax concessions to encourage that private sector investment. I think the culture's right, it's really a question of hard dollars.

Kim Carr:

I disagree with the Minister. I can't think of any particular private arm of a university in the country that's performing the commercialisation role well. There has been improvements, but not one of them is doing it well. There are of course developments occurring in that regard. The fact remains we have this enormous wastage in terms of our IP talent. We have this extraordinary capacity to ship jobs offshore as the failure to actually develop jobs in this country as a result of the research work undertaken.

But the real question here is that the Government has constantly insisted to our research organisations that they must find private sources of income as a means for covering the cuts in public expenditure and as the President of the Academy of Sciences recently pointed out, the Academy is concerned that too high an expectation on the private sector to dramatically increase its support for higher education and R&D is of course … and therefore any call to reduce public funding is misplaced, and that's the paradigm on which we're now operating.

Supplementation of public support is one thing, replacement is an entirely different matter.