Australia’s 2024-25 innovation budget puts ARENA in the limelight and another R&D review on the table

By Warren Bradey
An experienced commercialisation expert, senior executive and company director who has started, led and grown many successful Australian-based, global businesses.

It was pleasing to see that the Federal Government’s 2024-25 budget has acknowledged the importance of science, innovation and research and development, with Treasurer Dr Jim Chalmers noting that the current budget delivers a “transformation of the Australian Economy… and researchers can shape it.”

The big economic story for the budget is the announcement of the Future Made in Australia program which has over $22.7 billion allocated to it over the forward estimates. The big winner to implement this policy is the relatively little known Australian Renewable Energy Agency (ARENA).

Whilst the government has previously decided to establish specialist investment teams to run the National Reconstruction Fund, The Industry Growth Program, The Australian Economic Accelerator and the Clean Energy Investment Corporation, it has decided to entrust ARENA to establish a new $1.7 billion Future Made in Australia investment Fund to support the development and demonstration of early-stage technologies in key industries such as:

  • renewable hydrogen
  • green metals
  • low carbon liquid fuels
  • clean energy technology manufacturing

ARENA will also have carriage of the role to create a National Interest framework to the Future Made in Australia’s investments to achieve net zero transformation and economic security and resilience – a big job for a modestly resourced agency.

Whilst ARENA has the technical expertise in the energy area it is unclear why the government did not take the opportunity to build professional capability of commercialisation and investment skills by bringing the fund under one of the previously established teams and draw on the technical expertise of ARENA as needed.

In the budget, the government also announced the commissioning of a study on the effectiveness of the Australian R&D system. There have been recent reviews undertaken across the sector which include looking at the R&D Tax Incentive program, the restructure of the Australian Research Council and the Universities Accord. We again cross our fingers that these prior reviews will be major inputs to what needs to be a high-level strategic plan for integrating the R&D sector into a transforming economy.

There has been a raft of other new announcements in the 2024-25 budget to support the innovation and R&D sector (mainly focused on later stage manufacturing opportunities) which include:

  • $566M to Geoscience Australia to map Australia’s resources and critical minerals
  • $523M to establish the Battery Breakthrough Initiative
  • an additional $291M over five years to continue delivery of the Australian Antarctic Program
  • $95M for the Square Kilometre Array, reallocated to help address Australia’s obligations to the ongoing construction in Murchinson, WA
  • $38M over 10 years to support STEM diversity opportunities
  • $21M for integrating Australia’s artificial intelligence (AI) expertise across AI policy development, programs and outreach (largely transferring funding from CSIRO)
  • $480M for ANSTO to construct a new nuclear medicine manufacturing facility
  • $95M for the Square Kilometre Array, reallocated to help address Australia’s obligations to the ongoing construction in Murchinson, WA
  • Continuation of funding levels for the NHMRC and MRFF
  • Maintenance of current funding levels for the ARC
  • A $3.8B commitment toward the Australian Universities Accord, which includes payment to some students required to undertake practical field experience

Overall, the 2024-25 budget has opened the door to a brighter innovation and R&D future but with a significant need to align to future manufacturing and emerging industries opportunities.

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