8 May 2013 — The Commission of Audit report painted a grim picture of what can possibly be expected from Tuesday’s Federal Budget. The Fifth Estate put an ear to the ground to get a feel for how the commission’s axe-wielding recommendations have been received.

Scrapping the Cooperative Research Centres – what are the implications?

“At a time when ‘innovation through collaboration’ is needed most it is sad to see the suggestion to eliminate the CRC Program,” Scientia Professor Deo Prasad, chief executive officer of the CRC for Low Carbon Living, said.

“This program is the only one where end user needs drive the research and explicit utilisation plans are considered essential in ensuring the outcomes are taken to usage.

“With traditional companies finding it difficult to compete – recent factory closures are a good example – one would think it important to expand industry driven research and innovation to capture [the] next generation of products.

“The built environment sector is quite disparate and not investing enough by themselves in next generation products and services. So a CRC is the most appropriate model to foster this collaboration. The CRCLCL is a built environment innovation hub that aims to underpin the ability of Australian built environment industry to compete globally. The built environment industry is hopeful that the budget cuts do not affect the CRC Program.”

Professor Deo Prasad

Professor Prasad told The Fifth Estate that CRC research also provides the evidence a government needs to create good policy, but at this point in time, he saw no evidence of the “clever country” emphasis that had existed under previous governments. He also emphasised that being clever with sustainability was essential for Australia to remain globally competitive.

“These [research centres] are the things that will have deeper, long-term value for the country,” Professor Prasad said.

“In Europe they have zero energy building codes, which were brought in a few years ago and have been evolving before they become mandatory in 2016. There has been a five-year innovation period. If innovation in Australia is slowed, then our industry is not keeping ahead of the pack.

“It is so easy to get building products from China and fly them over here [if we do not develop our own products in Australia]. In the industry that we are travelling in, the only way to survive is in developing products for the next generation, products that will be more sustainable and low-carbon.

“[The Commission] is forgetting about what the implications [of scrapping the CRCs] might be in the long term.”

One of the assets of the CRCs is the knowledge base of researchers and the PhD students who gain qualifications in materials, building science, engineering, architecture and design.

“There has been a significant capacity built over the years,” Professor Prasad commented.

“Our CRC produces industry-ready PhD graduates. We work with the industry in educating people, and provide serious post-professional trade education.”

He said that the combination of CRCs and other research hubs were providing a “once in a generation opportunity” to help Australia keep up with the rest of the world in terms of innovation.

“Australia’s advantage [in the global market] lies in its ability to innovate and capture that innovation in products, particularly in the built environment,” Professor Prasad said.

“Once the mistake is made [of removing funding], it is hard to get the government to backtrack.”

Science and Technology Australia expresses concern for CSIRO

Funding levels and research autonomy for the CSIRO are threatened by the Commission’s recommendations, something which is of major concern to the scientific community.

“Because science and technology is part of almost every area of human endeavour, many of [the Commission of Audit’s] recommendations could touch on the sector. But a number are directly relevant and warrant very careful consideration,” chief executive of Science and Technology Australia Catriona Jackson said.

“Scientists will be keeping a very close eye on a range of very briefly considered and discussed recommendations to restructure and consolidate research programs, funding and grants schemes. When considering such change, the primary consideration must be whether the changes improve the situation for science and research or damage it.

“Among those of immediate note, the report recommends that the legislative basis for the CSIRO be changed, bringing it into closer alignment with the way other public service agencies are governed.

“If adopted, this would have the potential to constitute a serious infringement on the independence of Australian scientific research.

“The Audit report recommends: ‘Allowing for more government oversight of the work of the [CSIRO] to ensure that resources are being directed to areas of greatest priority.’

“Scientists understand government has a legitimate role in setting research priorities for CSIRO and other research bodies.

“However the entire Australian community will be very concerned if the government compromised the independence of CSIRO and their 6000-plus scientists. Australians trust CSIRO science, and the autonomy of the CSIRO and its board is central to that public trust.”

Construction industry peak body supports continued innovation

Executive director of the Australian Construction Industry Forum, Peter Barda, described the Commission’s recommendations to reduce support for innovation as “the saddest target, because they have the ability to make a real difference for very little money”.

He told The Fifth Estate that energy efficiency in particular was an area where the pursuit of innovation needed to be supported.

“It’s a pity [the attitude towards climate change in the recommendations],” Mr Barda said. “And whether climate change was caused by human actions or not, the bottom line is energy is expensive and anything we can do to reduce energy use is important.”

“The Property Council 30 years ago realised energy was a significant cost. It has been recognised as an issue. Regardless of global warming, it is an economic issue, and anything that diminishes our ability to reduce costs and energy use is not in the nation’s best interest.

“For modest amounts, [funding towards innovation and energy efficiency] shows high returns.”

Affordable housing really is a Commonwealth issue

Housing Network associate Carrie Hamilton told The Fifth Estate that while many people involved in the affordable housing sector had advocated market-linked rents for social housing, the Commission’s recommendations in this regard were flawed due to fundamental supply issues. Further, she said, the wellbeing of the broader Australian population in terms of being able to afford a home really was a Commonwealth responsibility.

“Lack of housing affordability all through the income ranges is a Commonwealth not regional issue, because it results from a market failure to provide adequate supply. Central governments exist to address and use their mechanisms to mitigate market failures. If devolved to the states, we will get wildly divergent and destabilising approaches,” Ms Hamilton said.

“Despite the ideological preference for market-based rents, by this point that is moot, given that economic participation is not an option for the vast majority of public housing tenants. The trajectory of social housing’s reduction in overall supply numbers in recent decades and concomitant increased targeting to multiple-need clients has resulted in a situation where those with very low incomes alone will never get a social housing placement – you need multiple, complex needs to be allocated a dwelling now. NSW’s public housing waiting list is 58,500 published last Monday; South Australia’s is 20,000.

“Most people in social housing are going to be on incomes relating entirely to welfare entitlements. Whether the Commonwealth structures the funding gap between that ability to pay rent and operating cost in terms of bulk transfers to the states or rent assistance – it doesn’t matter. The gap is huge, and many states have been forced to quietly – or not so quietly – sell dwellings just to fund these operating expenses. Much less address those waiting lists.

“Commonwealth Rent Assistance as it stands is not adequate to address operating cost of social housing. In brand new housing, say that was built under the stimulus, it might be close, but certainly not across Australia’s more typical aging stock. Also, there is precedent (UK) of it being a target for cuts.

“The Commission of Audit recommendations may be under the misapprehension that making public housing tenants eligible for CRA will enable the states to borrow against the assets. This is often why public housing assets have been title transferred to the non-profit sector – once the tenant is signed over from the housing commission as landlord to the non-profit community housing provider as landlord, the tenant can access CRA and the CHP can attempt to raise debt on the dwelling’s cash-flow. But this only works well for new dwellings with no maintenance backlog and a high valuation (that is, new stimulus homes).”

So what can we expect?

If the Victorian Budget is any indication, chances are innovation, sustainability and social housing will all prove to be low hanging fruit in terms of budget cuts and austerity measures.

The big question remains – is this kind of short-term austerity setting us up for a much grimmer picture of permanent austerity, the one scientists warn we face if we fail to innovate, reduce emissions and mitigate the impacts of climate change?