Labor accused of hoarding medical research funds as productivity flatlines
The Albanese government is being accused of hanging on to hundreds of millions of dollars a year as medical research institutes reel under serious cost pressures. What’s going on?
The Albanese government is being accused of hanging on to hundreds of millions of dollars a year in a $24bn fund earmarked for health and medical research as national productivity flatlines and medical research institutes say they face closure without an imminent injection of funds.
The Medical Research Future Fund, created 10 years ago to support health and medical research into areas including brain cancer, cardiovascular health, dementia and stem cell therapies, provides an annual amount of funding for grant applications.
But despite the MRFF Board of Guardians determining a maximum $1.05bn could be allocated out of its $24bn pool in 2025-26, the government is budgeting for a $650m disbursement.
In 2024-25 the government’s outlay was $323m less than the board’s advised maximum allocation, and $220m less the year before.
Association of Australian Medical Research Institutes chief executive Saraid Billiards said it made no sense to leave funds unused when the sector is facing an existential crisis amid domestic cost increases and research funds from the US drying up after US President Donald Trump’s election.
“The MRFF has the money; now we need to put it to work to ensure our institutes stay open and we still have a sector in 2030,” Dr Billiards told The Australian.
“This money is crucial at a time when the sector really needs it. We have a highly experienced Board of Guardians recommending the government spend more than $1bn from the Medical Research Future Fund, yet those funds remain unused. When we’re fighting to cut costs and keep institutes afloat, it just doesn’t make sense,” she said.
Independent MP Monique Ryan has written to Jim Chalmers calling for the issue to be canvassed at the upcoming productivity roundtable, and to Health Minister Mark Butler urging him to open up the coffers.
“The government is sitting on hundreds of millions of dollars which could immediately be used to support a vital sector which is under acute financial strain,” Dr Ryan wrote in her submission to the roundtable.
“Australia sees a return of $3.90 for every $1 invested in health and medical research. By not using funds already available – funds which are literally in the bank already – we are throwing away the potential economic and social benefits of increased investment in this sector.”
Dr Ryan told The Australian the health and medical research industry was being “starved of oxygen”, adding: “Give it the oxygen and it will take off.”
“(The Treasurer) says he is looking for solutions to stagnant productivity that are revenue neutral. Here’s a way to kick start a part of the economy with money that is sitting in the bank, unused. This is an easy one, a no-brainer,” she said.
The AAMRI represents organisations including The Doherty Institute, The Florey Institute, Peter Mac and the Burnet Institute. Dr Billiards said the current economic climate was proving “an especially tough time for Australian medical research”.
“The sudden loss of significant funding from the US National Institutes of Health has left major projects scrambling, on top of already stretched domestic funding,” she said.
“With (National Health and Medical Research Council) grants under fierce competition, rising costs, and inflation eroding budgets, we risk losing our competitive edge internationally, and our brightest minds to overseas.
“Research funding isn’t a cost that can be cut without a ripple effect; it’s an investment in our health and our economy creating high-value jobs, strengthening our healthcare system and ensuring we have the treatments and therapies we need in the future.”
“The MRFF has the money sitting there. Every day it goes unused is a day of lost opportunity to protect our health, our economy, and our future,” Dr Billiards said.
A spokesperson for the federal Department of Health said the Board of Guardians’ determination was not a recommended spending amount, and research institutes had the option of finding private funds.
“The MRFF Maximum Annual Distribution Amount is an independent determination made each year by the Future Fund Board of Guardians,” the spokesperson said in a statement.
“The determination specifies the maximum amount that can be drawn from the MRFF each financial year to fund research projects, it does not recommend an allocation.
“Medical research institutes are private businesses, with a variety of funding sources,” they said.
The MRFF was created in 2015, and was built over time through government contributions to reach its target of $20bn in 2020.
It now has $24bn in its coffers. Its original objective was to provide $1bn a year to research.
In 2021, the Morrison government introduced a bill to cap the MRFF’s allocation at $650m a year. The stated reason was to protect the fund from financial market fluctuations.
The legislation made it through both Houses of Parliament with the support of Labor, but didn’t receive royal assent before the 2022 election, so never became law.
Despite this the MRFF’s 10-year strategy proposes $650m a year allocations through to 2033-34 regardless of overall size of the fund.
At the same time, research institutes are struggling. Losing access to US funding has forced the Burnet Institute to suspend some research projects into malaria, tuberculosis and women’s and children’s health until 2030. It estimates the US cuts have left it with a $1.2m funding shortfall across its global health programs.
A combination of insufficient funding at state and federal level has left Victorian medical research institutes particularly vulnerable.
An independent report by the Nous Group, commissioned by the AAMRI’s Victorian chapter, found “nine of the 14 Victorian iMRIs face financial collapse by FY28-29, with a projected collective deficit of $2.57bn by FY34”.
The Health Department points to the development of a National Health and Medical Research Strategy, a draft of which will be delivered to the government within months. It says the health and medical research sector has already provided significant input into that draft strategy.
But there is still a consultation to run, including a formal submission process, and the sector is concerned a final strategy will come too late to save many organisations now operating.
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