The Australian Government's commitment to investing in R&D is being called into question after new figures reveal a continued decline in investment in R&D and a potential $400 million underspend on the Medical Research Future Fund (MRFF).
The figures were contained in the 2025-26 Science, Research and Innovation (SRI) Budget Tables published by the Department of Industry, Science and Resources on 15 August 2025.
The latest figures show Federal Government investment in R&D for 2025-26 as a proportion of GDP remains consistently low at 0.53% of GDP, compared to 0.54% in 2024-25.
Last week during National Science Week, Minister for Industry and Innovation and Minister for Science Tim Ayres acknowledged Australia's low research and development expenditure.
President of the Australian Academy of Science Professor Chennupati Jagadish AC said the latest figures show R&D investment isn't even keeping up with inflation, let alone fuelling productivity.
"Acknowledging the decline is one thing, but it's now time to turn this around because it is hurting Australia," Professor Jagadish said.
"Australians want technologies like AI to boost productivity, new medicines to keep us healthy, and the most advanced Defence capabilities to keep our island nation safe. But we aren't willing to invest sufficiently in the discoveries that create them."
Government investment in R&D in dollar terms is $1.8 billion less than the OECD average. Australian business under-investment is $32.5 billion less than the OECD average.
The Academy has proposed incentivising companies with revenue over $100 million to invest in R&D by imposing a 0.25% or 0.5% levy on those that don't, with funds from the scheme used to grow long-term research funding.
"The Academy's proposal addresses intolerable business R&D underinvestment, rewards those that invest, and provides a source of long-term research funding - an area no government minister wants to address," Professor Jagadish concluded.
