The 2018–19 Budget affords a powerful opportunity. It is a chance for the Government to convey that its greatest priorities are investments in Australia’s people, productivity and prosperity. It is a chance to secure future growth by investing in the smarts and skills of our people. A renewed commitment to the nation’s higher education and research agenda is the vehicle to deliver on these priorities. Conversely, cuts to universities would be a disinvestment in Australia’s future. The decisions made today will decide Australia’s prosperity tomorrow.
Two key challenges lie ahead for our nation. One is to lay the foundations for jobs and growth in the coming high-skills, hi-tech era. This will be an era in which more of Australia’s population than ever will need a higher level of education to do and create the new jobs to meet the needs of the digital economy.
The other is to attend skilfully to social cohesion. This is crucial at a time where large-scale economic change risks dislocation and disadvantage for vulnerable sections of our community. Investments in providing access to university education for Australians from regional, poorer or disadvantaged backgrounds are vital to this task. Our nation’s investment in broad access to higher education is a powerful inoculation against entrenched disadvantage – and the political and economic dislocation that inevitably results. Australia’s future social cohesion will be shaped by our commitment to grow our economy for the many, not just the few.
The jobs of the next decade will grow out of today’s investments in research and development (R&D). That’s why the Conservative UK Government committed an extra £2.3 billion to R&D in Chancellor Phillip Hammond’s recent Budget. The UK has also set a national target to lift its R&D spend to 2.4 per cent of GDP. By comparison, Australia’s R&D spend was significantly lower at last measure – at just 1.9 per cent of GDP. Our nation’s research investment strategy in this Budget should be bold and ambitious in providing the basis for future jobs and growth.
On the latest figures, investment by business in R&D has gone backwards. Despite tax breaks worth $3.1 billion under the R&D tax incentive, Australian business is now doing less of the R&D that leads to new productivity and job creation. This Budget affords an opportunity to act on the ’3 Fs’ review of the R&D tax incentive. It is a chance to get this investment trend heading back in the direction needed to drive future economic growth.
One of the fundamental roles of a national Government is to lay the foundations for growth and prosperity. The contribution of universities to productivity gains in our nation’s economy and workplaces over the past three decades have been profound. Productivity gains from university research were worth an estimated $10 billion a year over the past three decades. And the productivity gains from our skilled graduates were worth $140 billion to our economy in 2014. Universities are a substantial part of Australia’s nation-building productive infrastructure.
Sustaining our investments in Australia’s universities is smart policy to deliver on key public policy priorities.
As it frames this Budget, we encourage the Government to recalibrate its thinking on the public investments that deliver the best people, prosperity and productivity returns.