The high cost of record low research funding

Australia has delivered some of the world’s most transformative health and medical breakthroughs – the cochlear implant, the HPV vaccine, IVF, cancer therapies, total artificial heart, and spray-on skin. But behind the scenes, the sector is buckling under a chronic funding shortfall. For every dollar received through NHMRC and MRFF grants, another 64 cents is needed to cover the full cost of research.

Research Australia and the Association of Australian Medical Research Institutes (AAMRI) are calling for a coordinated national approach to the National Health and Medical Research Strategy (National Strategy) and the Strategic Examination of Research and Development (SERD).

“We must not treat the National Strategy and the SERD process as separate. Their alignment is essential to achieving transformative outcomes,” said Nadia Levin, CEO & Managing Director of Research Australia.

The warning comes as Australia – one of the world’s richest nations – plunges in the global economic complexity index, now ranking 99th out of 145 countries, down from 91st in 2022. The nation’s dangerous reliance on a narrow export base, brutally exposed during COVID-19, continues to erode its economic resilience.

“Bold and ambitious reform made over the next 18 months both through the SERD and National Strategy will determine whether we create a robust policy framework that embeds health RDI into Australia’s long-term innovation infrastructure,” Levin added.

The Medical Research Future Fund (MRFF) is falling short. The Future Fund Board of Guardians recommended more than $1 billion be allocated to research for 2025–26 – yet the government committed just $650 million. That’s despite data showing every $1 invested returns $3.90 in economic benefits, outperforming most other forms of government investment.

In 2023 alone, medical research institutes were forced to find an additional $786.2 million to cover the funding gap left by NHMRC and MRFF. That deficit includes gross underfunding of researcher salaries and essential infrastructure costs – from lab maintenance and accreditation to data security, commercialisation, legal costs, and cutting-edge technologies.

Nowhere is the pressure more acute than in Victoria, where nine out of Victoria’s 14 medical research institutes will be financially unsustainable by 2028–29 unless urgent action is taken.

“Ten years ago, Victoria was the gold standard when it came to support for our world-leading research institutions,” said Professor Kathryn North AC, Director of the Murdoch Children’s Research Institute.

“But we’ve gone steadily backwards and currently receive less than every other State to help us cover the cost of our state-of-the-art facilities and the latest technologies that are essential for medical breakthroughs and providing the best and latest therapies for all Victorians.”

AAMRI and Research Australia are pushing for a national investment target in R&D – including health and medical research – to increase from 1.6% to 3% of GDP over the next decade. Crucially, the increase must fund the full cost of doing research – not just a fraction of it.

“There is now a once-in-a-generation opportunity to transform the health and medical research funding landscape through a strategic and coordinated whole-of-government approach, in partnership with the sector,” said AAMRI CEO Dr Saraid Billiards.

“This will ensure future generations of Australians will continue to reap the health and economic benefits of a thriving health and medical research sector.”

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