The federal budget will keep scientific research alive. But it’s unlikely to expand it

In March, a major independent report commissioned by the federal government declared Australia’s research and innovation system was “broken”. The report, titled Ambitious Australia, recommended how to fix it.

The 2026 federal budget gives us the first concrete signal of how the federal government intends to act on the report’s recommendations.

This signal is a quiet one, despite there being some welcome commitments. It is not quite the kind of renewal many in the research sector might have hoped for after years of reviews, uncertainty and declining confidence in national research settings.

Let’s dig into the details.

Looks good at first glance

At first glance, some headline numbers in the budget look constructive.

For example, the government says it will “[strengthen] our science capabilities and institutions” via new investments. There is $387 million over four years for the CSIRO. There is also $273 million for the National Measurement Institute, $21.7 million for the Australian Space Agency, and $24.3 million over two years for the National Health and Medical Research Council (NHMRC).

The government has also committed to establishing a National Resilience and Science Council. This was one of the main recommendations of the Ambitious Australia report. The council will provide coordinated advice on research, development and innovation investment. It will also help set priorities for $15 billion worth of funding in this area.

This is a logical policy direction. It may reduce fragmentation and help connect public research to national industrial capability.

The Medical Research Future Fund disbursement cap will progressively lift toward $1 billion per year by 2030–31. This removes an artificially imposed budget measure, which many have called for, and will allow significant extra funding to flow to health and medical researchers.

Subject to treaty negotiations, the government will also provide funding for Australia to join Horizon Europe as an associate member. Horizon Europe is the European Union’s flagship research funding scheme. Associate membership would allow Australian researchers to lead projects and directly access an additional tier of funding to complement our domestic funding schemes.

Not a broad expansion of research

These commitments are real and welcome. They support public science capability that Australia needs. But they are largely institutional life-support measures. They are not a broad expansion of competitive, investigator-led fundamental research.

For example, the Ambitious Australia report recommended that Australian Research Council and NHMRC funding allocations be returned to historical levels, reversing what it documented as a 19% real decline over 12 years, and properly indexed.

That recommendation is not yet adopted in this budget.

Some of the commitments in the budget are also, on closer reading, essentially a redistribution rather than an expansion of public investment in research.

Take the measure referred to as “Boosting Productivity – Promoting Research, Development and Innovation”. This is partially funded by returning $800 million of uncommitted funding from Australia’s Economic Accelerator over five years, with a further $1.4 billion in savings booked between 2030–31 and 2036–37.

Established in 2022, Australia’s Economic Accelerator was a program designed to bridge a gap between publicly funded university research and commercialisation. Scaling that back, in the same measure that funds science agencies within the Department of Industry, Science and Resources, is representative of the government’s apparent focus shift from competitive, university-administered research funding and toward agency-based applied science.

This strategic shift is further emphasised by the choice of instrument for stimulating private R&D investment.

The government seeks to unlock $400 million per year in additional R&D investment by young firms through increased tax offsets.

But that figure is a behavioural estimate, not a committed R&D outlay. It rests on assumptions about how Australian industry may respond to increased tax offsets. And historically, Australia’s business expenditure on R&D as a share of GDP has been persistently below the OECD average since at least the early 2000s.

There are many cultural and structural reasons for that. An offset adjustment is unlikely to be a silver-bullet resolution to them on its own.

Finally, one of the more low-key and curious inclusions in the budget notes that work is “progressing to reform registration requirements so that universities can achieve research specialisation in chosen areas of focus”.

It describes it as a process that will redirect non-research-intensive disciplines and/or institutions toward teaching. It seems to forecast consolidating R&D investment at fewer, larger institutions.

This could benefit Australia’s leading research intensive universities that form what’s known as the Group of Eight. But it could potentially harm mid-tier research active universities and their emerging academics building research programs across the country.

A holding pattern

This budget is a holding pattern for fundamental research in Australia. It keeps the lights on for agency-based science, doubles down on driving business R&D, and defers structural decisions about university research funding to a future date.

In a chaotic global environment being shaped daily by oil market shocks, none of these choices are unreasonable.

They do, however, leave Australia’s fundamental research system in a state of policy suspension at a moment when the report commissioned to examine it explicitly recommended decisive action.

The question is no longer what the Ambitious Australia report said. It is whether or when the government intends to act on it.