Issue: 542
Sent: 18-06-2014 09:18:04
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Australia's Medical Researchers Receive More PlauditsEmail Marketing For Planners
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Australia's Medical Researchers Receive More Plaudits

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John Robertson

Official Australia loves its medical researchers. However worthy, the lopsided adulation for this one group sends implicit messages about the worth of others and how the nation's resources should be deployed to greatest effect.

Australians have just seen a national government budget presented which attempts to reset some of the expectations of the citizenry. Although some of the claims about what is being cut are hugely exaggerated, the budget does set out to offer a different set of price signals and incentives. The government overtly wants to change behaviour.

In a budget which is widely seen as mean and unfair, the medical research industry was promised a surprise windfall from the earnings of a $20 billion fund. Although the fund may still fail to see the light of day after the government finishes haggling with the crossbench senators holding the parliamentary balance of power, medical researchers have been given special status among the potential recipients of fiscal support.

Another beneficiary, although of a vastly different order of magnitude, was the mineral exploration industry. The government has proposed a refundable tax offset up to a total value of $100 million for up to three years to Australian resident shareholders of companies conducting greenfield mineral exploration.

The Australian Bureau of Statistics has estimated that total spending on non-petroleum exploration in Australia in 2013 was $2.5 billion. This was a drop of $1.4 billion from the peak in spending over the 12 months to June 2012 so a tax benefit capped at $25 million in its first year is not going to produce a radical change in behaviour.

The initiative is a commitment from the 2013 election policy manifesto of the Abbott government written at a time when parties were still jockeying for sectoral support. The measure now sits at odds with more recent strident calls from senior ministers for business to lessen its reliance on government assistance.

Without going into the details here, rules that seek to limit the amount claimed under the exploration incentive scheme will leave companies unsure of the size of the benefit until a year or more after any decision to invest. With so much uncertainty attaching to the eventual tax benefit, it is hard to see how investors can properly take account of the new measure in their decision-making.

The exploration incentive had the look of a begrudging and unenthusiastic fulfilment of an election promise. At the same time, government ministers gushed with pride over the accomplishments of the nation's medical researchers.

Both mineral explorers and medical researchers call on outside funding to succeed in their early stage costly and often speculative efforts but there has been no cost-benefit analysis of where the marginal budget dollar is more effectively spent.

Australians are at the leading edge of endeavours in both fields. Exploration is the precursor to mine development, employment and future export earnings. In contrast, Australians have little history of commercialising medical research. Australia relies on royalty payments from international pharmaceutical groups to recoup its research investment.

The absence of any meaningful analysis about which activity contributes the greater economic and social benefits retards the capacity of policymakers to make an informed choice about appropriate relative levels of support. Nor do we understand which activities are more sensitive to changes in government funding.

The policies outlined in the budget said plenty about how the government feels about the respective contributions of the nation's explorers and researchers. The urbane and well connected city-based men and women in white coats appeared far higher in the pecking order than those sweaty folk poking around ancient rocks in an isolated and desolate Australian backblock.

Much the same message was evident in the recently released Queens Birthday honours list. There were seven new companions named in the Order of Australia four of whom were involved in various aspects of medical research. There were two lawyers and one writer.

Sixty new officers of the order were appointed. Unsurprisingly, people engaged in policy advocacy featured prominently. On my reckoning, 15 appointments fell into this category. Another 11, including three members of the Seekers music group, came from the arts. Again, this was probably unsurprising.

The biggest group of beneficiaries - 16 in all - came from the medical and biological research fraternity. There were another 10 academic appointments including Des Ball and Hugh White, two prominent Canberra based geopolitical analysts. No doubt their joint appointments were needed to maintain strategic balance.

Again on my reckoning, only four appointees came from the business community. Two were the founders of the Lonely Planet publishing business. One - Ziggy Switkowski - has well known connections to the telecommunications industry but was singled out for his involvement in tertiary education administration not hard wiring the nation's infrastructure. The other businessman, Tasmanian Dan Norton, was there not only for his involvement in infrastructure development but also, yes, medical research.

Some will argue that there should be no honours system of any sort. Others might say only those individuals who selflessly embrace voluntary work are deserving of special notice. People doing what they are paid to do, including academics and lawyers, are not especially deserving on this view, no matter how prominent and skilled.

Whatever one's view about the honours system, it does send signals. Nearly half of the newly appointed officer class is engaged in medical research or otherwise in academia. The chance of being a business person and receiving an award is small by comparison.

There is more than a little sense in the honours appointments and government policy that the more genteel and cerebral community members are to be preferred. This might prove valid but, as a nation, we must ask whether the signal it sends subliminally skews the way our national resources are deployed. This is a question being conveniently ignored.

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