Home杭州桑拿 › Borrowing, cutting and boosting: The creative accounting behind innovation plan’s $1.1b budget

Borrowing, cutting and boosting: The creative accounting behind innovation plan’s $1.1b budget

Prime Minister Malcolm Turnbull and Minister for Innovation and Science Christopher Pyne. Photo: Alex EllinghausenMalcolm Turnbull admits some policies in $1.1b innovation plan could failMark Kenny: Charging the negative particlesPyne’s steep learning curve: 12 weeks to spend $1.1b

The Turnbull government’s innovation package was launched on Monday with all the trappings of a budget – in a media lock-up accompanied a blizzard of fact sheets and costings. And, like any budget, some creative accounting.

The aim is to give the government plenty to crow about while not blowing out the budget deficit. The headline $1.1 billion in spending over four years is all new money, but there are still tricks.

The big one is the creation of a new $250 million Biomedical Translation Fund to commercialise medical research discoveries. As the fact sheets explain, the money is not new: the $250 million is being redirected from the government’s existing Medical Research Future Fund. That fund, the centrepiece of the government’s unpopular 2014 budget, is already depleted because the $7 GP co-payment supposed to help fund it was abandoned. The government insists the medical fund will be fully capitalised by 2020, meaning it will have to find money elsewhere to tip into it.

Similarly, the government is spending $70 million on a new CSIRO Innovation Fund but that isn’t adding to the deficit either. Because the investment fund could earn money down the track it is “off-budget” and will not affect the underlying cash balance. The NBN is being funded the same way, which is why any savings or cost blow-outs in its roll-outs do not affect the budget bottom line in the short term. The same goes for university loans that are counted as a budget “asset”. Meanwhile, the government has still banked $111 million in cuts handed down to the CSIRO in its 2014 budget.

Existing programs are also being expanded and repackaged. The $18 million for a new program called Innovation Connections, for example, is simply an add-on to an existing program called Research Connections, which connects researchers and businesses.

Other spending was announced, while existing cuts went unmentioned. The innovation package included $127 million for university block grants over the next four years – a welcome addition of cash for universities. But this is less than the $263 million cut from research block grants in this year’s budget. The government cut $263 million from the Sustainable Research Excellence program, which pays for libraries, laboratories, computing centres and researcher salaries to help pay for research infrastructure.

In a speech to the National Press Club on Tuesday, Innovation Minister Christopher Pyne said the package would boost jobs and economic growth, but there was not modelling of their estimated benefits.

“A lot of the reforms in this agenda are medium to longer-term reforms that don’t even have a cost to the budget yet because they’re things like allowing depreciation of intangible assets to be treated the same way as tangible assets which is hard to put a figure on,” he said.

“These are not necessarily sexy changes, but people in the business community will know what they will mean and they’ll have important impacts on people’s choices about what they invest in and how they run their businesses.”

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