By Ryan WinnCEO, Science & Technology Australia
This time last year, Treasurer Jim Chalmers spoke about five 'seismic changes' reshaping the world in his Federal Budget speech. Shifts from globalisation to fragmentation, hydrocarbons to renewables, IT to AI, a young population to an older one and shifts in the industrial base. He noted that each of these challenges put a premium on resilience. We argue they also put a premium on Australia's Science, Technology, Engineering and Maths (STEM) capability. Delivering solutions to the challenges Australia faces in the context of these changes will require strong investment in our nation's STEM capacity. But there are significant roadblocks.
When the Treasurer delivers his fifth federal budget tonight, we have been told to expect responsible measures, including major tax reform, spending cuts, fuel security and a boost to the defence budget. Meanwhile, there is a growing crisis at science and technology organisations across Australia, that will leave us all more vulnerable without urgent action.
Our STEM workforce is under strain and in desperate need of support, at a time when demand for STEM jobs is growing faster than any other sector. Official numbers from Jobs and Skills Australia Employment Projections shows the number of roles that will require at least a bachelor's degree in STEM will grow by 24 per cent by 2035, which is another 550,000 jobs. That's nearly twice the rate of all other skilled professions. But there's a problem. Well, three actually.
Analysis conducted by Science & Technology Australia has revealed how low morale is among our STEM workers. Nearly half are looking at changing jobs right now. And a third surveyed told us they plan to leave the sector altogether. That talent will either be lost overseas or they will switch to other, more stable jobs. The second problem is Australia's major reliance on STEM professionals who have moved here from overseas. Our foreign-born Bachelor-qualified STEM workforce now accounts for 42 per cent. While Australia is indebted to that overseas workforce, we also need to grow the domestic STEM pipeline. But, the third problem is that in the past decade, there's been a 10 per cent decline in Year 12 STEM participation.
And why would they choose a career in STEM, when they see the CSIRO cutting 350 jobs? That's on top of the 800 jobs cut in the previous 18 months. Over the weekend the Australian Government announced $387 million extra funding for CSIRO, but it won't be in time to save those jobs. It only helps with the infrastructure funding shortfall we heard about with the job cuts in November 2025. And it comes after $1.5 billion in budget savings on other science and research measures were announced on Friday, including the scrapping of the research commercialisation program known as Australia's Economic Accelerator.
The impact of this rolling uncertainty is being repeated across the STEM industry. The reason? A decades-long decline in R&D investment in Australia, now sitting at less than 1.7 per cent of Global Domestic Product. That's way below the average of 2.7 per cent among OECD nations. And simply not competitive with South Korea, which invests 4.9 per cent, nor the United States and Japan, at 3.4 per cent.
Just as households are feeling the pinch of costs of living increasing faster than incomes, the research system is feeling the pinch of increasing research costs. From consumables to specialist equipment, to wages, costs are increasing faster than increases in support from Government grants and appropriations.
Examples from members of Science & Technology Australia tell the story. In 2006, when Microscopy Australia invested in nationally significant microscopes they cost between $3-6 million. These microscopes now cost between $7-13 million. The Australian National Fabrication Facility tells us there's been a 50% increase in cost of liquid nitrogen since 2021. Astronomy Australia tells us there's been a 60% increase in detector costs based on global pricing. This isn't something that can be absorbed into existing budgets.
The Australian Government has so far failed to provide security for the R&D sector - actual dollar amount funding may not have been cut but in real terms, we've gone backwards. Success rates for competitive grants have collapsed, wasting researcher time and increasing workforce instability.
Tonight's Federal Budget should be about setting Australia up for the future and resetting our economic direction. R&D and innovation can and must be part of that, but it requires a deliberate strategy.
In March this year, the Government released the results of its Strategic Examination of Research and Development - the Ambitious Australia report. This blueprint prepared by an independent panel, is full of hope and potential. Now we need a whole-of-government response working closely with the STEM industry and business on implementation and action.
For decades, Australia's sovereign scientific capability has been recognised around the world. It's helped Australia navigate the COVID-19 pandemic and create the world's first bionic ear. It led to world-changing inventions like Wi-Fi and now leading the global race in silicon-based quantum computing.
Key Government priorities all depend on a strong STEM skilled workforce, from the Future Made in Australia initiative, the National AI Plan, AUKUS, meeting net zero, protecting our biodiversity and ensuring productivity and sovereign capability in supply chains across crucial areas of the economy, including critical minerals, medical technology and advanced manufacturing.
We need to stop viewing the STEM industry as simply a cost, but an investment in our future - a way of securing our nation's environmental, economic and social resilience for the next generations. This investment will enable Australian technology that will make jobs across our economy. But this means stabilising funding through research cost-indexed increases to research grant programs and agencies, investment in Australia's crucial STEM workforce and strengthening STEM education to reverse the decline in participation.
In the end, it's a choice of whether we want to build the resilience and seize the opportunities the Treasurer spoke of 12 months ago. Because, if Australia doesn't, other countries will, and they already are.
This article was first published by InnovationAus. Read the full story here.
