MRFF billions locked away by government as research institutions struggle

New costings from the Parliamentary Budget Office (PBO) have revealed that the annual Medical Research Future Fund (MRFF) funding could be more than doubled without compromising the fund’s capital.

Commissioned by Dr Monique Ryan, Independent Member for Kooyong, the analysis shows the Albanese government is withholding desperately needed money from the sector. Dr Ryan wasted no time in calling for an urgent release of funds.

“We could more than double the amount spent from the MRFF every year, while keeping more money in the fund than it was intended to hold,” Dr Ryan said. “It’s a win-win for Australians concerned about our healthcare system, for medical researchers, and for our economy. Hundreds of high-quality research proposals have missed out on funding in recent years. Increased investment in medical research won’t just secure our research sector and guarantee its growth and longevity – it will improve health outcomes for all Australians.”

The MRFF, which marked its 10-year anniversary recently, was meant to be a bold gamechanger: a $20 billion endowment generating $1 billion annually for health and medical research. Instead, its legacy is being overshadowed by underfunding. The Labor government is currently spending just $650 million a year from a fund now worth more than $24 billion.

The PBO projections are stark. On current settings, the MRFF is expected to grow to $35.4 billion by 2035–36. Yet the annual ‘breakeven’ figure – the amount that could be safely spent without eroding the current $24 billion capital – is $1.4 billion, more than double the government’s current annual allocation.

Sector leaders argue the government’s tight grip on the purse strings is starving research institutions already buckling under structural funding gaps. Dr Saraid Billiards, CEO of the Association of Australian Medical Research Institutes, warned that the situation is unsustainable.

“With the MRFF holding well over $24 billion, there is room to release significantly more to our researchers without risk to the fund’s strength. Spending this available money would help stabilise our research institutes, and at the same time enable the Government to realise the ambitions of its Health and Medical Research Strategy and the SERD Review, delivering the breakthroughs Australians need.”

Unlike international counterparts, the MRFF provides no support for indirect research costs – the essential infrastructure and operational expenses that underpin world-class research. In NSW, indirect costs soar to 69 cents for every direct research dollar, yet the state covers just 15 cents – barely 22% of the burden. Victoria fares little better, shouldering 48 cents per research dollar with state support of only 7 cents, or 15%.

By contrast, the UK covers more than 80%, the US funds 100%, while Singapore and the EU contribute between 20–30% and 25% respectively. This imbalance has now been formally acknowledged in the draft National Health and Medical Research Strategy, which described the model as financially unsustainable.

Professor Chennupati Jagadish, President of the Australian Academy of Science, went further, condemning the arbitrary cap that has handcuffed the fund for years. “It’s time to remove the arbitrary funding cap on MRFF disbursements so it can deliver what it has been designed and legislated to do – support medical research and innovation. While the Fund continues to grow in value there is no reason to cap disbursements and, in so doing, to cap cures.

“At the same time the MRFF and the NHMRC strategy must urgently address the full cost of research funding, as both medical research institutes and universities are struggling, while the MRFF corpus grows.”

The stakes are not only clinical but also economic. Health and medical research accounts for 26% of Australia’s total R&D activity, with every $1 invested delivering an estimated $3.90 in returns. Yet government spending on R&D continues to sit below the OECD average.

Liz de Somer, CEO of Medicines Australia, stated “The MRFF can transform health and medical research and innovation to improve lives, contribute to economic productivity and strengthen health system sustainability. The Government needs to further unlock this ongoing research fund to meet these objectives. Increasing investment into research, development, and commercialisation of Australian innovation from the $24 billion fund would make a difference.”

For many in the sector, the MRFF represents a cruel paradox: a fund flush with billions while institutions struggle to keep the lights on. Prof Brendan Crabb, Director & CEO of the Burnet Institute and Chair of the Australian Global Health Alliance, summed it up bluntly.

“To address the big health challenges of our time, medical researchers are in desperate need of further support. It is rare to have a ready-made answer, yet in the MRFF, we have what we need already in the bank. The funds simply need to flow as originally intended. This can happen, while also maintaining this vital fund for future generations.”

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