Chief Scientist links R&D Funding to Value of the Aussie Dollar

ROBYN WILLIAMS

This is The Science Show in which we turn a little later to sport, some good news there. Hello, I’m Robyn Williams.

The bad news, see if you fancy this, it comes from an impeccable source. The bad news is the prospect of a 30 cent Australian dollar and petrol at three bucks a litre. In effect, the choice between a knowledge society and the drongo nation. Our Chief Scientist has just taken his analysis of Australia’s research base on the road, as Peter Pockley reports

PETER POCKLEYY

From the moment Treasurer Peter Costello delivered his first Budget, the writing was on the white board for the suffering ahead for an economy dependent in the long haul on science and technology (or research and development) and, of course, higher education. There were huge cuts, especially to universities and to the tax incentives for industry to expand its dismal level of innovation. He said this was all due to Labor’s mismanagement of the economy.

S&T, R&D, HED, QED!

Four years to the week after that Budget, the Australian Bureau of Statistics has rubbed the scribbles off the white board and put it in print and their numbers could not be challenged. Over the first two years of Howard/Costello cuts, the Gross Expenditure on R&D fell behind the much-vaunted growth in the economy by 10 per cent. A "terrible set of figures" is how the Federation of Australian Scientific and Technological Societies summed it up.

As for the government’s claim to international competitiveness, Australia dropped right down the OECD table and now stands above only five others. From 1996 to 1998, nearly every other nation expanded its commitment to R&D.

Enter stage left, the nation’s Chief Scientist, Dr Robin Batterham. A year ago, he was asked by the Minister for Science, Senator Nick Minchin, to assess the science capability of Australia. He has now pulled together figures and arguments that make compelling reading.

He says we have "The Chance to Change" (as he titled his paper). But, as every partial indicator has already shown, things are crook in Tallarook. So crook, that Dr Batterham told a briefing in Sydney last week Australia is facing a halving of our already-sinking dollar to 30 US cents within two or three election cycles. That is inevitable, unless the support for R&D is dramatically improved, as, for example, has happened in Canada, Finland and Ireland.

ROBIN BATTERHAM

Well, two points here. Firstly, the thesis that science, engineering and technology matters and is the essential underpinning of innovation and knowledge-based economy, and then that we want a knowledge-based economy, I think the steps in that thesis are not widely accepted.

And so, we have to look at that one fairly carefully, because if we don’t get a broad acceptance of that thesis then we will stay on our present path. Now, when I look at our present path, I look at the halving of the Australian dollar over the last 30 years and it’s, of course very much tied. I can put up a graph that shows exactly the same, in the meaning of the Act, a fall in the price of metals. And that, of course, gives you the big hint as to why thing falls. The coincidence, of course, is more than just plain coincidence.

And that fall has occurred when knowledge was doubling every 15 years or so. Now, knowledge doubles in 7 to 9 years. So, I’m arguing that the rate of knowledge increase will actually increase the rate of fall of commodity prices and hence the Australian dollar. So, we won’t have to wait 30 years is my simple argument, there. We’ll see it a lot sooner than that.

PETER POCKLEY

What would be the consequences to Australian economy, lifestyle, environment of a collapse of the Australian dollar by a further half, roughly to 30 US cents which you predict would happen within two or three election cycles?

ROBIN BATTERHAM

I hope it won’t, of course. And I really do think we have the chance to change and that we will take it. So, in some ways it’s a very hypothetical argument. But, you’ve only got to look at the concern with petrol being over a dollar a litre and say what happens if it’s 2 or 3 dollars a litre?

And, if by the way, we can’t buy so many goods from overseas, including those we need to be part of a knowledge-based economy, because our dollar is so low, so that the effect would, in fact, be quite devastating.

PETER POCKLEY

What is your reaction to the news that’s just come out about the, if you like, the collapse of the amount of gross expenditure of Australia on research and development which has gone down from 1.65 per cent of Gross Domestic Product to 1.49 in the two years from 1996?

ROBIN BATTERHAM

I’m not sure as adventuresome as to call it a collapse. But, I think that this is an ongoing trend whereby our position which has been reasonable in the past is now one where we have to say the rest of the world, or at least the OECD countries and, of course, they are the ones with which we would compare ourselves, are taking off faster than we are.

Finland over 10 years has more than doubled its business investment in R&D. We haven’t.

Ireland ahs also more than doubled its investment, business investment in R&D. We haven’t.

PETER POCKLEY

Robin Batterham’s biggest challenge may be in whether, at last, a truly united and bi-partisan approach to science policy can be forged from the two major groups of players.

First and foremost, there are the researchers and managers in universities, government and industry. He told them they have the prime responsibility and must present a united voice and clearly articulate the "case for science".

Then, there are the politicians who seem to be in training for the Olympics with their variation of ping pong. Labor is having a field day in pointing to details of the government’s record. Senator Minchin began his defence this way: "This government has known for some time that the decline in business expenditure on R&D in part reflects the abolition of the systematic abuse of the R&D tax concession that took place under Labor".

There’s a lot riding on the report and on Dr Batterham himself. Supposedly, he has been working only two days a week for the government, they cut the job back from full-time. Pressed on this at the Sydney meeting, he said he is having to put in ten-hour days, seven days a week and cannot handle such a work load for long. (He has a big job with Rio Tinto as well.)

WILLIAMS

Peter Pockley writes for the journal Nature.

And you can hear more from the business point of view on research next Thursday at 12.15, when I talk to Ian Dunlop about science in the boardroom. He’s Chief Executive Officer of the Australian Institute of Company Directors.

ENDS

Peter Pockley

25 Avenue Road, Glebe, NSW 2037

Phone: (02) 9660 6363; Fax: (02) 9660 6239

E-mail: scicomm@ozemail.com.au