Australia aims to rejoin the high-tech race

Australia is to inject nearly $A3 billion into its R&D spending, writes GREG ANSLEY.

CANBERRA - Australia will spend almost $A3 billion ($3.6 billion) in the next five years to push research and development of the country's inventions in a bid to make up for lost time and regain its place in the global high-tech race.

Prime Minister John Howard yesterday launched his innovation policy amid concern over flagging R&D spending, the export of ideas and talent, and preliminary sparring over this year's federal election.

Key elements include a replacement for the corporate R&D tax breaks slashed several years ago, increased research and education spending - including almost $A1 billion for new loans for postgraduate students - and the streamlining of entry for IT-skilled immigrants.

In an extremely competitive world of highly mobile capital and labour, it is all the more important that Australia has the right incentives and opportunities to translate Australian ideas into income and jobs at home for Australians, Mr Howard said.

His new policy is seen as a response both to an earlier, similar emphasis on knowledge by the Labor Opposition, and to heavy business and scientific criticism of the 1996 decision to cut R&D tax concessions from 150 per cent to 125 per cent.

Over the following three years Australia's corporate research spending, already trailing other developed economies, fell from 0.9 per cent of GDP to 0.67 per cent.

Although the Opposition has described the new policy as a catch-up providing too little too late, it has been welcomed by industry and educators, who will benefit from a new finance stream.

The $A2.9 billion package follows growing concern at the decline of Australian innovation and a rising flow of researchers, inventions and skills overseas.

Last year, in the leadup to the national innovation summit that helped to frame Mr Howard's new policy, the Australian Industry Group warned that the country's economic potential was held back by falling R&D budgets and a dearth of medium and high-tech manufacturing.

Researchers, including such bodies as the state CSIRO scientific organisation, will be required to compete for research grants targeted at ground-breaking research to push Australia's competitive advantage.

Finance for these grants will be doubled, with another $A736 million available, and a further $A337 million will be provided for infrastructure required for specific projects. An extra $A155 million will give scientists cutting-edge facilities.

New world-class centres of excellence in information and communications technology and biotechnology will be set up with funding of $A246 million, focusing on the commercialisation of new technology and new spin-off companies.

Finance for the existing Cooperative Research Centres programme, linking industry, the CSIRO and other public research agencies, will be increased by $A227 million, or 80 per cent, over five years.

Tax breaks of 175 per cent - in addition to the existing 125 per cent concession - will be provided for extra spending by companies on increased R&D. Education will gain through a loan scheme for postgraduate students, enabling 240,000 students to upgrade skills at a cost of $A995 million, and 2000 new places a year for students specialising in maths, science and IT and communications.

A further $A130 million over four years will go to targeted schools to raise standards of maths, science and technology.