Proposed legislative changes to the MRFF

Proposed legislative changes to the MRFF

25th August, 2021

***update – The legislation has been referred to a Senate Committee for inquiry.

 

On 24 August the Government introduced a Bill to Parliament to amend legislation relating to the Future Fund, Medical Research Future Fund (MRFF), and the Emergency Response Fund.

The following is a summary of how the changes will impact the administration of the MRFF if the Bill is passed by Parliament.

If you have any questions, please contact Dr Peter Thomas (peter.thomas@aamri.org.au)

Streamlining the operation of the MRFF

  • The methodology for calculating the maximum annual disbursement from the MRFF will be changed, and instead a fixed maximum disbursement of $650 million per year from 2022-23 will be specified.
  • The responsible minister will be required to review the legislated amount at least every five years.
  • The responsible minister will be able to update the amount for future years via a disallowable legislative instrument.
  • This change will isolate the determination of disbursements from financial market fluctuations.

New investment mandate for the MRFF

  • Following the commencement of this legislation, the responsible minister intends to issue a new investment mandate for the MRFF, allowing the Future Fund Board to pursue a higher average annual benchmark rate of return for the MRFF. Over time this should increase the amount of funds available for medical research.

Australian Medical Research Innovation Strategy & Priorities

  • Extend and align the timing of the Strategy and Priorities to reduce ongoing consultation burden on the sector. At present the priorities are set for two years and the strategy for five years, and this has meant older priorities could have been in force when a new strategy had been set. This means the period for the strategy and priorities will now better align.
  • The Strategy will change to 6 years, and the Priorities to 3 years, with the existing priorities ended a year earlier to help them align.
  • To summarise the process:
    • The existing 2016-21 Strategy expires in November 2021 and will be replaced by a new strategy expiring 2021-27 Strategy (6 years in length compared to current 5 years).
    • The existing 2020-22 Priorities will now expire in November 2021, a year earlier than planned, and will be replaced by 2021-24 Priorities (3 years in length compared to current 2 years).

Other administrative changes

  • State and territory governments will be eligible to receive funding directly from the MRFF Health Special Account.
  • Clarify that grants can be paid in instalments, such as through the use of milestone payments.
  • Clarify that the Health Minister can request debits from the MRFF Special Account without having to identify each individual grant to which a debate relates. It is the intention that grant outcomes would still be reported on the Department of Health website.
  • Allow copies of administrative directions to debit the MRFF Special Account (for the purposes of paying MRFF grants) to be received by senior departmental officials instead of Ministers, in stances where the Finance Minister has delegated this power.