2021-2022 Federal Budget – what’s in it for medical research?

2021-2022 Federal Budget – what’s in it for medical research?

11th May, 2021

This document provides a summary of the main announcements in the 2021-22 Federal Budget. If there is a specific item that has not been covered below but you would like further information then please contact AAMRI’s Executive Director, Dr Peter Thomas (peter.thomas@aamri.org.au).
Please feel free to share this document with interested colleagues.

Updated on 12 May at 4.30pm to include details of the new NHMRC National First Nations Research Network – see section 4.10

 

1 Summary

There were few surprises in this Budget for medical research with significant announcements having already been made earlier in the year.

The Medical Research Future Fund reached its target $20 billion capitalisation in 2020-21 and investment returns from the fund will now be used to fund around $650 million of medical research each year.

The global economic downturn caused by the COVID-19 pandemic resulted in lower than anticipated returns from investments made by the Medical Research Future Fund. Therefore, a funding shortfall has emerged which the Government has filled by providing an additional one-off investment of $172.5 million.

There were no changes made to funding provided to the NHMRC and ARC, with only a small funding indexation applied.

There were a few one-off funding announcements made including for facilitating mitochondrial donation into research settings; facilitating clinical trials; lung cancer research; funding for the National Cancer Screening Register; women in STEM initiatives; and coordinating Australia’s global science diplomacy efforts.

A new patent box has been announced which will provide financial incentives to commercialise Australian medical and biotechnology.

Last year the Government provided a one-off payment to universities through the Research Support Program to help assist with the downturn in international student revenue. Funding levels have now returned to their previous levels.

 

2 Medical Research Future Fund

2.1 MRFF total planned expenditure on medical research

Expenditure on medical research through the MRFF in 2021-22 is approximately $190 million lower than forecast last year. It is believed that this is due to lower than anticipated returns on investment following economic financial stability in the financial markets.

The Government has announced that it will help make up this shortfall by providing an additional $172.5 million. It is believed this funding is being provided through the Ordinary Annual Services Special Account (See Health Portfolio Budget Statement, page 63, program 1.1)

 

2.2 MRFF building the fund to $20 billion

The final capitalisation payment of $.2 billion into the MRFF was made in 2020-21. The MRFF has now reached its target capitalisation balance of $20 billion and as such no further capitalisation payments are planned over the forward estimates.

2.3 MRFF – balance of fund

Following the full capitalisation of the MRFF the balance of the fund is now set for $20.9 billion in 2021-22. The balance of the fund is expected to remain around $21 billion over the forward estimates.

3 Research Council Funding

3.1 National Health and Medical Research Council

 

Disappointingly there is no new additional funding provided to the NHMRC over the forward estimates with only small indexation rises provided. The indexation amounts are very slightly higher than forecast in the previous Budget.

See item 4.1 and item 4.10 for new NHMRC initiatives announced at the Budget.

 

3.2 Australian Research Council

3.2.1 Overall level of ARC research funding

There is no new additional funding provided to the ARC over the forward estimates with only small indexation rises provided. The indexation amounts are very slightly higher than forecast in the previous Budget.

3.2.2 ARC Discovery program

Funding for the ARC Discovery program is very slightly higher than forecast in the previous Budget.

3.2.3 ARC Linkage program

Funding for the ARC Linkage program is very slightly higher than forecast in the previous Budget.

4 Notable new expenditure, savings, and revenue measures

 

4.1 Investing in medical research (Encouraging clinical trials & facilitating mitochondrial donation into research settings)

The Government will provide a further $10.4 million over four years from 2021-22 for medical research in Australia. Funding includes:
• $6.0 million to extend the National Partnership Agreement, Encouraging More Clinical Trials in Australia, and removing barriers for conducting clinical trials.
• $4.4 million to introduce mitochondrial donation into research settings in Australia and to help facilitate a clinical trial of mitochondrial donation to support families that may be impacted by severe forms of hereditary mitochondrial disease.

4.2 Preventive Health

The Government will provide $23.1 million over five years from 2020-21 (including $1.5 million per year ongoing) to further support preventive health activities. Funding includes:
• $1.9 million in 2021-22 for preventive health research and scoping activities, including a national health literacy strategy, to inform a National Preventive Health Strategy.
• $7.5 million in 2021-22 (and $1.5 million per year ongoing) to support the continued operation of the National Cancer Screening Register, including additional service provider costs and data integration, and facilitating alternative delivery pathways for bowel cancer screening kits to Indigenous populations.
• $6.9 million in 2021- for five lung cancer care nurses to provide support to patients and their families and for lung cancer related research activities.
• $0.9 million over two years from 2021-22 to continue the Australian Government’s contribution to the Health Star Rating system, in collaboration with the states and territories.

4.3 Patent Box – tax concession for Australian medical and biotechnology innovations

The Government will introduce a patent box tax regime to further encourage innovation in Australia by taxing corporate income derived from patents at a concessional effective corporate tax rate of 17 per cent, with the concession applying from income years starting on are after 1 July 2022.
The patent box will apply to income derived from Australian medical and biotechnology patents.
Australia currently taxes profits generated by patents at the headline corporate rate (30% for large businesses and 25% for small to medium enterprises from 1 July 2021). The patent box will offer a competitive tax rate for profits generated from Australian owned and developed patents.

4.4 COVID-19 Vaccine Manufacturing Capabilities

The Government will provide funding to develop an onshore mRNA vaccine manufacturing capability in Australia. This will include:
• Continuing negotiations with existing manufacturers and approaching the Australian marker to establish an onshore end-to-end mRNA vaccine manufacturing capability in Australian to develop COVID-19 vaccines and other potential products, such as flu vaccines.
• Approaching the Australian market for a long-term sovereign mRNA manufacturing capability to establish end-to-end onshore capability.
Funding for this measure is not for publication due to commercial in confidence sensitivities.

4.5 Digital Economy Strategy

4.5.1 Enhancing our Artificial Intelligence capability

The Government will make the following investments:
• $53.8 million over four years from 2021-22 to create a National AI Centre and four AI and Digital Capability Centres.
• $33.7 million over four years from 2021-22 to provide grants to businesses to work with the Government to develop AI based solutions to solve national challenges.
• $24.7 million over six years from 2021-22 to establish the Next Generation AI Graduates Program.
• $12.0 million over five years from 2021-22 to deliver co-funded grants to support community and business driven projects that build AI capabilities in regional areas.

4.5.2 Australian Data Strategy

The Government will also develop an Australian Data Strategy 2021-25 in partnership with state and territory governments, and in consultation with the private and not for profit sectors.
The Government will invest $43.8 million over three years from 2021-22 to expand the Cyber Security Skills Partnership Innovation Fund. The Fund invests in projects to improve the quality and quantity of cyber security professionals in Australia and the additional funding will be provided to further secure and build capability across national priority sectors identified in the Modern Manufacturing Strategy.

4.5.3 My Health Record System

The Government will provide $421.6 million over two years from 2021-22 to continue the My Health Record system and provide funding for the Australian Digital Health Agency.

4.6 Women’s Economic Security Package

The Government will provide $42.4 million over seven years from 2021-22 to establish the Boosting the Next Generation of Women in Science, Technology, Engineering and Mathematics (STEM) program by co-funding scholarships for women in STEM in partnership with industry.
The Government will provide $0.6 million over three years from 2021-22 for the Women in STEM Ambassador to develop an evaluation toolkit to support standardised evaluation planning and reporting tools for the STEM sector in the evaluation of STEM gender equity initiatives.

4.7 Global Science and Technology Diplomacy Fund

The Government will establish a Global Science and Technology Diplomacy Fund ($54.2 million over four years from 2021-22 and $8.2 million per year ongoing) to support strategically important science and technology collaborations with global partners.
This will be achieved by consolidating international science funding programs in the Industry, Science, Energy and Resources portfolio.

4.8 Australian Nuclear Science and Technology Organisation – ongoing sustainability

The Government will provide $116.7 million over four years from 2021-22 (and $14.2 million per year ongoing) to support the Australian Nuclear Science and Technology Organisation’s ongoing operations. Funding includes:
• $59.8 million over four years from 2021-22 to support waste storage capacity.
• $56.9 million over four years from 2021-22 (and $14.2 million per year ongoing) to undertake additional maintenance and renewal of infrastructure and equipment.

4.9 Not for profits – enhancing the transparency of income tax exemptions

The Government will provide $1.9 million in capital funding in 2022-23 to the ATO to build an online system to enhance the transparency of income tax exemptions claimed by not-for-profit entities (NFPs).
From 1 July 2023, the ATO will require income tax exempt NFPs with an active ABN to submit online annual self-review forms with the information they ordinarily use to self-assess their eligibility for the exemption.

4.10 National First Nations Research Network*

At the Budget it was announced that the NHMRC will invest $10 million over five years to establish a national network of Aboriginal and Torres Strait Islander health researchers. The network will be called the National First Nations Research Network. Further details are available from the NHMRC.

*This item was added on 12 May at 4.30pm

5 Forecast expenditure/savings in other ongoing programs relating to medical research

5.1 University research block grants

5.1.1 Research Support Program

Last year the Government provided an addition one-off payment of $1 billion to universities through the Research Support Program block grant. Funding through this program now reverts to its usual levels.


5.1.2 Research Training Program

Funding for the Research Training Program (which funds Higher Research Degrees) will be very slightly higher than previous forecasts.

5.2 National Collaborative Research Infrastructure Strategy

Funding for NCRIS continues in line with the forward estimates set out last year. Of note there is a significant increase in funding set for 2024-25 when funding will increase by an additional $100 million.


5.3 CRC Program

There are no significant changes in planned expenditure through the CRC programme. Funding will decline this year by about $33 million and then remain steady over the forward estimates.


5.4 ANSTO

Budgeted expenses through ANSTO are set to be lower than previously forecast. It is believed this is largely due to changes depreciation values of assets.