ARABIA, Ms Anna-Maria, Chief Executive, Australian Academy of Science JAGADISH, Professor Chennupati, President, Australian Academy of Science [15:01] CHAIR: Welcome. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to you. I now invite you, if you have a short opening statement, to make that and, at the conclusion of any remarks, I'll invite members of the committee to ask you questions. Prof. Jagadish : Good afternoon, senators. Thank you for the opportunity to appear today and contribute to the proceedings of this committee. The Australian Academy of Science is an independent scientific adviser to government with the purpose of informing public policy and delivering better outcomes for all Australians. Australia is facing many challenges that are shaping our economy, including demographic change, geopolitical shifts, environmental challenges and technological disruption. Government needs to ensure Australia has the scientific and technological capabilities required to meet these challenges. Recent global shocks, from the pandemic to supply chain disruptions and geopolitical tensions, have shown how quickly access to critical technologies and knowledge can become constrained. Nations that lack domestic scientific capability are forced to rely on others for solutions at precisely the moment when every country is prioritising its own needs. Maintaining strong research institutions, such as CSIRO, ensures Australia retains the sovereign capability to respond to crises, develop critical technologies and contribute meaningfully to international partnerships. This capability cannot be stood up overnight. It must be consistently invested in and built and sustained over time. For decades, CSIRO has delivered public-good research and innovation that underpins Australia's prosperity, resilience and global competitiveness across areas of science, including health, agriculture, climate, energy and advanced technologies. It is this Australian research that assists in our national resilience and in building sovereign capability to solve our own problems, rather than relying on the rest of the world to solve them for us. Public-good research provides the means for government to shape our destiny. Public-good research funded by governments also ensures that new knowledge is generated in rigorous and transparent ways and is shared for all to benefit. This underpins community trust in science. But science funding in Australia has been in decline for more than a decade, with significant consequences for the science sector, for the STEM workforce that so many industries rely on and for our economy. The academy views the recent job cuts and resources challenges at CSIRO as symptomatic of the broader R&D environment, where investment in research and development by government and businesses has been in decline for too many years. Australia invests 1.69 per cent of GDP into R&D. The OECD average is 2.7 per cent of GDP. In dollar terms, this represents a $27 billion gap. This is a major concern at a time when other nations are investing in R&D because they see science and technology as a strategic asset, as an investment and as a source of global power and prosperity. This issue cannot be solved with bandaids in the form of ad hoc injections of funds. That is why, in our submission, we called for the government to be decisive about what they need Australia's publicly funded research agencies to do, and then to fund them sustainably as strategic pillars of our economy. This involves strategic decision-making to decide the science capabilities Australia needs, which of those should be delivered by CSIRO and properly investing in building and maintaining them. These decisions should be based on evidence. As noted in our submission, it is important that the CSIRO leadership team are empowered to make strategic and operational decisions in line with CSIRO's objectives and Australia's national needs. In the academy's view, the issue before this committee is not only about the funding of a single agency it is also about whether Australia will invest in maintaining the scientific capability required to support our economy, environment, security and wellbeing in the decades ahead. The question before us is whether Australia intends to remain a nation that creates knowledge and technology or one that depends on others for them. CSIRO has long delivered extraordinary value for the nation; ensuring it is properly resourced is an investment in Australia's future. CHAIR: Senator Darmanin. Senator DARMANIN: Thank you, Professor Jagadish, for your opening statement. In your opening statement, you referred to your submission around the importance of the CSIRO being empowered to make strategic and operational decisions. You went on to say: This autonomy affirms CSIRO's ability to remain agile, innovative and capable of delivering impactful scientific research in the national interest … That is the broad thrust of your statement. In that context, with what's been happening recently, what is the need for CSIRO's leadership to review their research priorities to focus on the most impactful areas—it's so broad—to ensure their work stays relevant for current and future needs? How should they be undertaking this review of where they apply their scarce resources? Prof. Jagadish : CSIRO will need to look at what unique role they can play, which others are not able to play, like universities and other institutions. Also, being a national science agency, it needs to look at the national needs, in particular, looking in a strategic way at which areas CSIRO uniquely can do, which cannot be done by others. CSIRO also hosts many infrastructure facilities which have been used by many scientists across the nation and internationally. We need to ensure they're able to maintain those facilities, that they're up to scratch and that we're thereby able to maintain our national capability in CSIRO. CSIRO, being a national agency, needs to be looking at strategic national needs. Senator, as you know, the geopolitics and various things are changing in terms of climate change and various issues—pandemics and various challenges that society is facing—and that means, as a national organisation, it needs to do the strategic review, identify what its capabilities are, where it wants to focus on and what the government is asking them to do, thereby focusing on those ones and also ensuring the areas which they are not able to cover are covered by other parts of the system as well. If you miss the opportunity, for example, to do environmental science research, then who is going to do it? We cannot afford to lose the capability to do, in our nation, environmental science research. That is why we need to be strategic. Also, we need to have some sort of national coordinated effort. In fact, the academy's National Committee for Earth System Science has identified we do not have a coordinated system at the moment in our country. Nobody knows who is doing what—what the universities are doing or what the national organisations are doing. In fact, they have suggested we need to even create an institute for earth system sciences so that we can have a coordinated effort to ensure we don't miss out on opportunities and also the national capability to ensure we're able to meet our national needs. Senator DARMANIN: We've heard that from others—around having a coordinated approach so that we can have an overall national view. Keeping in mind the unique role of CSIRO and the different roles that others play in this space, do you have a view about whether international partnerships can help to reduce cost and increase resilience for CSIRO programs in general and also about the gaps? Prof. Jagadish : Thank you for that question. Science is global. That means we need to look at what science is happening globally. We need to really work out what our national needs are and then internationally what is happening. Nobody is going to do research for areas which are of our national interest. For example, we are talking about southern oceans. Nobody's going to come from other parts of the world and say, 'Southern oceans are important; we're going to do research.' That means it is our responsibility to ensure that we have that capability. That is where CSIRO can play a very important role. But, with science being global, we need to really learn about what is happening globally and what unique things we can do and to look at that from the national interest point of view as well. Senator DARMANIN: Thank you. CHAIR: Senator Pocock. Senator BARBARA POCOCK: Thanks for your submission and your work and for being here. I wanted to begin by referencing Minister Tim Ayres's statement that he has not reduced funding to CSIRO. I want to ask you to comment on that and why we are in the mess that we've heard a lot about today, with so many people leaving CSIRO. Prof. Jagadish : There has been a significant decline in investment in research in our country since 2008. In 2008, our investment in R&D was 2.26 per cent. At that time, the OECD average was 2.3 per cent. During this period, we have gone down in R&D investment to 1.69 per cent, whereas other nations have realised the importance of R&D as a scientific national strategic asset and have gone to 2.7 per cent, as the OECD average. So we were very close to the OECD average in 2008, but, today, we've got a one per cent gap in GDP investment. Just to put that into numbers, we're talking about $27 billion of 'gap'. This gap is from the public funding point of view and the business sector point of view as well. With government investment, we need to be able to invest at least a minimum of $1.8 billion in order to be able to maintain the OECD average. But the remaining $25 billion needs to come from private sector investment as well. In both of those sectors, we have really declined. We need to move towards changing the decline in funding to an increase in funding and develop a decadal plan to make sure in the next decade or so we're able to meet that OECD average. We're in the bottom half of the OECD countries. Coming to your question about CSIRO itself, as many people have pointed out today, the cost of doing research has gone up quite significantly with respect to just the CPI. If you go and look at actual investment in CSIRO with respect to inflation itself, it is not keeping up. Particularly the cost of doing research has gone up, but we are not even keeping up with inflation. That means there's a big gap in terms of what CSIRO has asked to do and what it is able to do because of the fact that we are not able to invest appropriate amounts in a strategic way and to see CSIRO as a national asset and science as a national asset for our nation. Ms Arabia : Senator, I refer you to the SRI tables from 2013 to 2026. These are government figures that show inflation adjusted costs for CSIRO as well as the budgeted costs. You will see that inflation— Senator BARBARA POCOCK: Are they in your submission? Ms Arabia : I don't believe they're in our submission, but they're publicly available, and we can make those available to you if you wish. Senator BARBARA POCOCK: Could you make those available to us? Ms Arabia : Of course. Senator BARBARA POCOCK: Please explain to me again what the number is there. Ms Arabia : The SRI budget tables go from the period 2013 to 2026. They provide the actual Australian government R&D programs and activities that are valued at over $100 million and present them both at current prices and inflation adjusted prices. If you have a look at 2024 to 2025—you do need to look at the spectrum over time—it makes the point that the cost of research is higher. The impact of inflation means that, whilst the headline figure might look better, there is no general increase in an inflation adjusted environment that would have the CSIRO going from strength to strength and being able to sustainably cover its research costs. Senator BARBARA POCOCK: Is that why you use the proportion of GDP as used by the OECD, which takes out the inflation effect? Ms Arabia : What Professor Jagadish was speaking about was the broader overall R&D investment figures. They do allow us to compare apples with apples across the world. Senator BARBARA POCOCK: Is that for the total sector? Ms Arabia : Yes. Senator BARBARA POCOCK: So the major argument you are making is about the overall decline in general funding for science and, within that, of course, the specific losses for CSIRO. You've made the point about inflation. You've also talked a lot about critical moments of crisis for which our scientific knowledge will not be properly equipped, especially for where we live in the world. Is that a part of your argument—that we need to be ready to meet our own sovereign challenges with our own sovereign sites? Do you want to expand on that? Prof. Jagadish : As we saw during the pandemic time with the supply chain issues and every nation investing in their own national needs, it was very difficult to get the critical technologies which we needed to be able to look after our own people. That is why we cannot rely on other nations. We need to have sovereign capability. That is why investment in research is in our own national interest, and that is something which we need to look at as a nation. It is not that research is something worthwhile to do, but it really should be seen that, without research, we are going to go backwards in our productivity and our economy will slow down. We will not be able to deal with changes in climate change—for example, its impacts on the health of the people, its impacts on agriculture and on the net zero energy transition to address the climate change issues. Again, we need to have the capacity to be able to develop those technologies. We have been really relying on the resource based economy. We need to move towards a knowledge based economy if we want to really provide the right kinds of jobs and the high quality of life for the next generation. That means we need to start investing now, because, in order to transition an economy from resource based to knowledge based, we are talking about a 20-year timeframe. If we don't act now, we'll keep on paying the price. You cannot suddenly go: 'I'm going to invest now. I have suddenly woken up.' The timeframe is something which we need to keep in mind. Other nations have been realising that one. They've been investing for the last 30 years or so. They see significant enhancement in R&D investments as absolutely critical for their economy, their productivity and the health and wellbeing of their people and for addressing the environmental and climate change issues as well. Senator BARBARA POCOCK: We had an earlier submission that showed a massive increase, for example, in investment in Korea. Ms Arabia : May I add a very specific example that I think illustrates the point well. I also refer you to submission 84, which was made by Professor Mathew England. He's a fellow of the Australian Academy of Science. He is based at UNSW, a university, and he collaborates with CSIRO. This gives a good example of the sort of way in which Australian institutions already collaborate. His speciality is in ocean modelling and monitoring to understand climate change. He speaks about the capability that the CSIRO has that he relies on so that they can work together. Perhaps most importantly is, together, they are able to offer monitoring of the Southern Hemisphere's oceans. This is our responsibility, being in the Southern Hemisphere; it is not something that we can delegate to others. Sovereign capability is needed for us to monitor ourselves. Whilst we welcome international collaboration and indeed joint funding, it is the primary role of Australia to look after this part of our world. Senator BARBARA POCOCK: That's very relevant evidence that corroborates what others have said today. You say in your submission that CSIRO is 'essential to generate knowledge that private sector parties do not and should not generate'. You've already made the point that $25 billion out of the private sector is where we're underspending in the private sector on R&D; we need $1.8 billion from the public sector. What can't the private sector do? Can you give us any examples where you think CSIRO is demonstrating that it is essential to provide research. Ms Arabia : We refer to this as public-good research. In fact, it follows on from the answer I just gave you around ocean monitoring and climate modelling. This is research and data that need to be funded by the public sector so that we are confident that the data has been generated in a rigorous way, that the data is shared transparently and that it is shared with everyone. If the private sector were to be funding climate monitoring and keeping that data to themselves, not sharing it with other parts of the world, and if we did not have a complete picture of that sort of information across both hemispheres of this globe, aeroplanes probably couldn't fly and ships probably couldn't navigate. We do need this global picture of our earth and it needs to remain in public hands so that it can be shared openly and transparently. When research is funded by the private sector, we absolutely welcome private sector funding of research and we encourage more of it. But public-good research needs to be funded by the public sector. Senator BARBARA POCOCK: What are the hazards then of relying on from 75 up to 100 per cent of research funding from the private sector? What are the hazards for the shape of the research program? Ms Arabia : If it is research where industry is interested in partnering with CSIRO—for example, to solve a problem—that's absolutely terrific. It cannot be the way the CSIRO funding model is sustained though. There should be partnerships between CSIRO and industry, but that does not change the fact that the basic research funding that CSIRO undertakes needs to be publicly funded and done so in a sustainable way. The two can coexist. It's when the industry funded research is greater and overtaking that publicly funded capability that we need and, when that public capability isn't sustainable, we have a problem. Senator BARBARA POCOCK: Great. Thank you for your answers and for your work. Senator DAVID POCOCK: Thank you very much for your time this afternoon and for your tireless work at the academy. I'm particularly concerned about the cuts to the Environment Research Unit, some of which was confirmed in the media overnight with 102 redundancies. We heard earlier about further reductions through attrition and other means. You've also signalled this as a particular concern. You expressed concerns about cuts to 'research to protect our environment and unique land and marine diversity'. You go on to say that no other country can do this research for us. Why is this research so important? Prof. Jagadish : Research underpins our economy. Research underpins our industry's research and it underpins our productivity, so that is why it is important that we invest in research. Publicly funded research is particularly important to ensure that knowledge stays in public hands and also to enable that to be used by all industries or whoever wants to benefit from, so that is why publicly funded research is absolutely critical. Fundamental research is the foundation for applied research and then for the translation of those technologies for economic benefit. That is why fundamental research mainly needs to be funded publicly—that is, by the government. For example, with the CSIRO, because of the staff cuts you are talking about, if some programs are going to be cut, who else is going to do it? Is anybody else is going to do it? If there's not, nobody else is going to do it. Can we afford to lose that capacity as a nation to really learn about our own environment and our own surroundings? Nobody is going to come and do that, and that is why it is in our national interest to invest in research. CHAIR: I'm sorry for the interruption, but I'm just letting you know there's a photographer here from the Canberra Times. I'm assuming nobody has any objections, but I understand there will be no photographs of the people in the public gallery. Senator DAVID POCOCK: Thank you for that. One of the things I find both confusing and really infuriating is the line we hear from government and from the CSIRO that someone else will do this research—another country or some private sector will do this research. When it comes to something like environmental research, whose interest is it in to pick up this research? If CSIRO doesn't do this research, who will actually do it? Ms Arabia : Typically there's capability in universities and other places, but we do trust that CSIRO would take a comprehensive look at the entire environmental research environment and identify what CSIRO uniquely does, and that we can't let go of; that needs to be funded sustainably. We do need collaboration. In fact, greater coordination internationally and domestically across our institutions is critical, especially in earth system science that takes into consideration air, land and water research and where we piece all of that together in a very coordinated way, ideally. But there are elements of that puzzle that CSIRO does uniquely, and we need to identify those and ensure they're sustainably funded. Senator DAVID POCOCK: In terms of funding, you pointed out in your opening statement that Australia's investment in R&D is poor relative to other OECD countries' averages. The government often blames the private sector—and, I think, with some justification when you look at the breakdown—but government budget allocations for R&D also lag the OECD's. We're at 0.36 per cent of GDP. The OECD average is 0.74 per cent. We have a government that has a goal of getting to three per cent. Everyone speaks about the need for increased R&D; I agree with this. Does it make sense to actually start with CSIRO at a time when they're making cuts? Should this be the place that the government starts to double down on research and fully fund CSIRO as a starting point at least? Prof. Jagadish : I think the entire sector is at the breaking point. Unless we get a comprehensive look at the entire sector and ensure that we start investing for the public good, what's going to happen is that, through this piecemeal investment—only one organisation or the other—as a nation we'll be missing out. So, of course, CSIRO need to be funded to ensure that they are covering certain aspects which nobody else can do. But, also, we need to have the comprehensive national overview to ensure that all aspects of research in the entire system are being fully covered and that we're thereby able to flourish as a nation by investing in R&D. Ms Arabia : We encourage a system-wide approach. That does not mean that CSIRO should not be adequately funded, but the system does need to work together. At the moment it is heavily fragmented. It is funded across various government departments, around 15 of them, and there are around 200 different programs. There are all of the publicly funded research agencies, not just CSIRO, that have funding sustainability issues. What we're seeing today is the symptoms of a long-term decline in funding. This has been going on for more than 10 years. We cannot kick the can down the road any longer. If we do, not only will we continue to fall further behind the rest of the world but the journey back gets harder and harder. The time to start is now—to look at the system comprehensively and to fix it over the next 10 years in a non-partisan plan for the future of Australia that's underpinned by robust science and technology capability. We absolutely need to start today. CSIRO are part of that, but they are symptomatic of a broken sector more broadly. Senator DAVID POCOCK: Thank you. I'm coming up on time, so, finally, Professor Jagadish, you refer to it as an investment. I often get the feeling that it's viewed as a cost by governments. Could you explain why this is an investment in Australia and in our future. Prof. Jagadish : The entire innovation system depends on research investment. If you start looking at everything as a cost, because public good—for example, if you talk about biosecurity, you're talking about pandemics. So then you say, 'What is the economic value of that one?' That means what you're doing is you're going backwards. We're not able to protect our people and not able to protect our environment. We're not able to protect our agriculture. What we are relying on will not be protected, so that is why it is important to look at it. We have to change our mindset. I sometimes use the example of superannuation. The cost-of-living pressures are there. Despite all the cost-of-living pressures, we are putting a small percentage of our money aside for superannuation so that, when we retire, we've got significant funds to be able to have decent quality of life. In the same way, research investment is like superannuation for the nation so that the future is going to be better for the next generation and the following generation. We're also able to address the challenges which we are facing as a nation: geopolitical issues, climate change issues, the net zero energy transition and pandemics. For the range of things which we are dealing with, without investment in R&D, we will not be able to address them and we will not have the sovereign capability. We don't want to be in a situation like that. Ms Arabia : The good news is that we will have a blueprint in the form of the strategic examination of R&D, which we expect to be released shortly. In that, there has been sector-wide consultation. It's an opportunity for government to grasp those recommendations with both hands and start this journey to create a flourishing Australia so that we can meet those defence and national security imperatives that we have so we continue to enjoy good quality of life and the health outcomes that we have come to expect and enjoy in this country. We can't take that for granted though. It is slipping through our fingers, and we do need to act swiftly. CHAIR: Thank you very much for your evidence to this committee today..