7 things you need to know about the Commission of Audit and CSIRO

Weighing in at over nine hundred pages and containing 86 separate recommendations, the National Commission of Audit Report casts a big shadow. So here’s a list of seven things you need to know about the Commission of Audit and CSIRO.

Set up by the Abbott Federal Government to review and report on the performance, functions and roles of the Commonwealth government; the National Commission of Audit has made several recommendations in the area of research and development. Here are seven things you need to know.

1. Increase government oversight of CSIRO

The Commission of Audit has recommended changing CSIRO into a Financial Management and Accountability Act 1997 body – essentially moving it into a grouping with other APS agencies – providing the Minister with greater control and oversight – possibly at the expense of the CSIRO Board.

“CSIRO is by far the largest publicly funded research agency in Australia, with more than 6,500 employees. It undertakes research across a wide range of policy areas,” the report says.

“Changing the legislative basis for CSIRO into a Financial Management and Accountability Act 1997 body would enable the Commonwealth Government to have more visibility over CSIRO’s work and ensure that resources are being directed to areas of greatest policy priority. This is the approach taken in New Zealand.”

Sadly, those staffing numbers quoted by the Commission of Audit are now incorrect – as of March 2014 CSIRO staffing numbers had fallen to 6,079.

2. Cut the Climate Change Science Program

Another recommendation of relevance to CSIRO is the recommendation to abolish the Australian Climate Change Science Program.

“The Australian Climate Change Science Program provides $31.6 million over four years to support research by the CSIRO, the Bureau of Meteorology, the Antarctic Climate and Ecosystems Cooperative Research Centre, the Centre for Excellence for Climate Change Science and the Australian Academy of Science on the causes, nature, timing and consequences of climate change for Australia and the region,” the report states.

“Between them, the agencies and organisations funded by the programme already receive significant direct Commonwealth funding and would be in a position to fund climate change science activities through their existing resources. These funds should be returned to the Budget or allocated to priority areas.”

3. Abolish the Cooperative Research Centres program

The Commission of Audit has recommended that Cooperative Research Centre’s (CRC) should be abolished. CSIRO is the largest single player in the CRC program which aims to promote commercialisation and application of Australian research and development.

“Currently there is a range of programmes designed to encourage collaboration between universities and the private sector. Given that all of these programmes have the same objective, there would be efficiency benefits in consolidating them,” the report says.

“Cooperative Research Centres should be abolished, with funding rolled into the Australian Research Council Linkages programme. As part of this transition, consideration should be given to allowing longer funding periods for Australian Research Council grants.”

4. Scrap Industry Innovation Precincts

If the Audit Commissioners get their way, Industry Innovation Precincts and the associated funding are set for the scrapheap.

“Given that the evidence base shows that industry clusters created deliberately by government rarely become independent of government funding, government should pull back from this area, abolishing the current Industry Innovation Precincts programme, including the associated Industry Collaboration Fund,” the report recommends.

5. Stop industry grants

Citing the benefits of existing research and development tax concessions, COA wants sector specific industry grants to stop.

“The Commission considers that sector-specific grants (such as those through the Australian Renewable Energy Agency, National Low Emissions Coal initiative, Carbon Capture and Storage Flagships and the Innovation Investment Fund) should be abolished.”

6. Change the RRDC funding model

The Commission recommends changes to the funding of Rural Research and Development Corporations, which may have a flow on effect to partnership arrangements with CSIRO:

“There is an array of Rural Research and Development Corporations in the Agriculture Portfolio which are co-funded by industry (through a compulsory levy administered by the Commonwealth) and by government. These Corporations do not receive the benefits of the research and development tax incentive,” the report reads.

“In return for the government contribution, the Rural Research and Development Corporations are expected to fund some research that has broader public good objectives. The wider industry and community have access to the outcomes and benefits of the Rural Research and Development Corporations’ research in order to maximise spillovers.

“Changes to the current funding model, consistent with Productivity Commission recommendations, would reduce the amount of government funding and better reflect the mix of private and public benefits. In particular, the current cap on dollar for dollar matching of industry contributions by government (currently set at 0.5 per cent of gross value of production) should be halved over a 10 year period.

“A new uncapped subsidy at the rate of 20 cents in the dollar should be introduced for industry contributions above the level that attracts dollar for dollar matching. Duplication of administrative support and processes should be reduced by aligning ‘backroom’ processes across the various Rural Research and Development Corporations.”

7. List CSIRO facilities on a central property register and change maintenance funding

The Commission of Audit has also recommended the creation of a centralised Commonwealth property registers – estimated worth $25 billion – under the advice of a commercial property expert, and develop a divestment agenda. The report estimates CSIRO’s property portfolio at $1.478 billion, including some 1,000 buildings spread over 54 locations, with a land value of about $378 million and $1.1 billion for buildings.

The Commission has also found that the CSIRO requires an additional $175 million in maintenance expenditure to meet external compliance and certification standards, some commentary on National Facilities and their management:

“CSIRO’s assets include 1,000 buildings at 54 locations. A comprehensive review in 2011-12 assessed 83 per cent of CSIRO buildings as needing significant maintenance to preserve operational capability.

“In addition to budgeted repairs, an additional $175 million in maintenance expenditure is needed over the next ten years to maintain CSIRO properties to meet external compliance requirements and certification standards,” the report concludes.

“The CSIRO also owns and operates three national facilities: the Australian Animal Health Laboratory, the Marine National Facility, and the Australian Telescope National Facility. Other agencies and universities use these facilities extensively, free of charge.

“While introduction of user charging is an option, CSIRO has received funding to provide these facilities and most users of CSIRO’s national facilities are funded by the Commonwealth. Nonetheless, the cost of owning, operating and maintaining these facilities needs to be better managed.”

The Commission of Audit recommends that the Federal Government establish a new centrally managed provision to fund major capital assets, from which agencies can seek funding as part of the Budget process.

Key findings – at a glance

The National Commission of Audit report recommends:

  • Increasing government oversight of the work of the CSIRO
  • Cutting the Australian Climate Change Science Program which supports research by the CSIRO, the Bureau of Meteorology and others into climate change
  • Abolish the Cooperative Research Centres program
  • Abolishing the current Industry Innovation Precincts programme, including the associated Industry Collaboration Fund.
  • Ending sector-specific industry grants – such as those through the Australian Renewable Energy Agency, National Low Emissions Coal initiative, Carbon Capture and Storage Flagships and the Innovation Investment Fund.
  • Changing the funding of Rural Research and Development Corporations, which may have a flow on effect to partnership arrangements with CSIRO
  • Listing CSIRO’s property portfolio – worth almost $1.5 billion – on a central register with other government property with a divestment agenda.
  • Establishing a new centrally managed provision to fund major capital assets, from which agencies can seek funding as part of the Budget process – after finding that CSIRO faced a $175 million shortfall over ten years to maintain CSIRO properties.

More information

  • The National Commission of Audit – website
  • COA plan could threaten CSIRO independence and integrity – media release

One thought on “7 things you need to know about the Commission of Audit and CSIRO

  1. I’d have to say that I can’t agree more strongly with the COA recommendations. Whilst there will likely be impacts on staffing and the number of operational sites, CSIRO must respond to the pressures of the Australian market for research and IP rather than protect its self-imposed mandate of being the ‘trusted advisor’ to Australia on ALL science domains at all locations in Australia and increasingly overseas. There is simply way too much wastage, inefficiency, subsidisation of expensive applied science to the SME and costly funding of unimportant IP.

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