Public science

One of the key elements of last nights budget was the announcement of a Medical Research Future Fund. A $20 billion fund to finance medical research. My initial thought was that this is a complete waste of money – the government is going to strip $20 billion out of the economy and health budget over the next few years and give the interest over to speculative curiosity driven research. This is just a thought bubble. An expensive thought bubble. It does howver mean that the very people – the medical fraternity – who would otherwise be highly critical of the co-payment have a $20 billion bribe to keep their heads down and mouths shut.

I don’t have time today to expand on this theme so I thought I’d provide some links to stuff I’ve written previously on this topic.

First – here is a presentation I gave a couple of years ago to the Baker IDI Heart and Diabetes Institute on the economics of science.

Then a backgrounder I wrote for the IPA – Back to Basics: Why government funding of science is a waste of our money.

Finally the myths of public science.

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25 Responses to Public science

  1. Rabz

    Lysenkoism, DDT, impending ice ages, ozone layer holes, catastrophic AGW – yes, what could possibly go wrong?

  2. .

    Let’s spell out the basic economics of all of this.

    20 bn to generate 1 bn in distributed revenues – so 5% return the “normal” bond rate.

    Well shoot. The deadweight loss on taxes is AT LEAST $1.20 for each $1 raised – more likely $1.30 for income tax and $1.40 all up, some taxes go as far as costing $1.69 of lost production to generate $1 of government revenue.

    So, at best, before inflation, before the issue of “other people spending someone else’s money”, the government is simply square.

    This is a huge waste of resources and should be knackered ASAP.

  3. MACK1

    GPS don’t do much research and most oppose the co-payment, so the research fund won’t dilute the oppostion much. I predict the co-payment will have a very short life indeed, even if it does get through the Senate.

  4. CJ

    Age of onset of dementia isn’t getting later, but people are living longer. An increasing proportion of the elderly are going to end up requiring high care for dementia… it’s projected to be a massive blowout in health costs in the coming years. My guess is that this money will be pretty targeted.

  5. Baldrick

    Where’s the public conscience about public science? Answer, there is none. It’s complete and utter codswollop and as dot said, it should be knackered ASAP.

  6. brc

    This, like the rest of the budget, is all about politics and not about actually getting the economy onto a sound footing. I’m extremely disappointed – everything, from the tax rises to the feeble cuts to the medical research board are just fops to a gimme-gimme public.

    There was an opportunity here to set the course and stand by a call to reduce government and reduce the size of the budget. That has been sidestepped and a Wayne Swan budget was handed down. Of course the Liberals are more likely to actually deliver on their budget promises than Swan, but I can’t help feeling that is a very ordinary consolation prize.

    If they were serious about the budget it would be lower than the previous year and not include any big-ticket spending items.

    As if this new medical research board is not going to be infested with nanny state lefties within two years of being set up. By the time the next Labor government is in place it will be researching the affects of climate change in transgender drug users, and the head honcho will be criticising Liberal health policies on Q&A, safe in the knowledge they have 20 billion in taxpayers cash to defend itself from cuts cuts cuts.

    Utter, utter, utter madness. It’s like confiscating equipment from your own soldiers and donating it to the enemy.

    I’m completely disillusioned by Abbott now. I can’t see myself defending him about anything. He certainly held promise but is just another big government functionary with nanny state leanings.

  7. Gab

    As if this new medical research board is not going to be infested with nanny state lefties

    Apart from that, there is no mandate for this new taxpayer sucking boondoggle. Anyone recall Abbott promising a $20 billion medical research fund before the election?

  8. Gab

    Oh and well said, BRC. My sentiments exactly.

  9. Dr Faustus

    This particular initiative redefines incoherent.

    At the bottom line, this is a transfer of ~$20bn in disposable income from taxpayers/welfare recipients into a vehicle that will ultimately generate a $1bn per annum funding stream into medical research – however ‘medical research’ may be defined. Take away the usual 20% administration overhead and this is likely to be $800m/annum in research grants. To be distributed where? For what?

    Sure it’s a sizeable sum in an Australian context. But as others have pointed out, a trivial amount in comparison to the funds invested for the same purpose elsewhere in the private and government sectors. As an example, in 2012 the US alone invested something like US$130bn in medical R&D.

    There’s a good reason that this will be the “world’s largest medical research fund” – it’s because it is an irrational idea that nobody else would think to do. It fits comfortably into the same category that has the NBN as the ‘worlds biggest wholly unplanned capital outlay’.

  10. egg_

    brc
    #1305019, posted on May 14, 2014 at 10:39 am

    +1

    Unfathomable.
    Must be survival politics?

  11. brc

    What’s the point of survival politics? Gillard was never interested in survival politics. She knew she had a short window due to unpopularity and rammed as much stuff through as she could. It’s the only thing that Abbot could have learned from her. Instead he learned about being tricky, deceitful and on increasing the size of government relentlessly.

    Somebody needs to give me a coherent argument as to why the size of the government in 2007 was too small and needed enlarging. Because I can remember 2007 and things ran just fine. In fact, things ran better then than they do now. I remember this specifically because my energy and water costs were less than half of what they are now.

  12. egg_

    What’s the point of survival politics?

    Ditto.
    Methinks he’s still in “small target” mode.

  13. Eyrie

    A lot of us had low expectations of Abbott and he’s failed to even meet those.

  14. Senile Old Guy

    A lot of us had low expectations of Abbott and he’s failed to even meet those.

    And all those telling us our criticisms were unfounded; “just wait until the night”.

    Anyone going to tell us we were wrong?

    Anyone?

  15. Walter Plinge

    If the research is directed to and comes up with new antibiotics for MRSI and so on, that would be worthwhile.

  16. James

    If the research is directed to and comes up with new antibiotics for MRSI and so on, that would be worthwhile.

    Chances of that happening: 0%.

  17. Fibro

    Total fund in consolidated revenue by 2017.

    I would put the house on it.

  18. Thanks for the links. Relevant to what I am working on now.

  19. Tiddly Pom

    I am no supporter of the particular fund, though mostly on the grounds that all hypothecation is bullshit. This research, if it is to take place, should compete for funding within existing (or reduced) total science research funding allocations, not get special consideration. (Nor, though, special condemnation; proposals in this as in other areas should be compared against objective criteria.)

    However, to go from there to the wholesale condemnation of all public funding for science research in the links is just ludicrous. For one thing, anyone who can write “strictly speaking stem cell research is not basic science” hasn’t much idea of what is basic science – the starting point, surely, for any argument on whether it should be publicly funded. For another, deploying the argument that “in a democracy it is inappropriate that unelected scientists should dictate policy choices” – who the fuck is saying that they should? – as bearing on allocation of research funding, is, well, illogical, to be kind.

    And there are plenty of other similar specific issues with the thesis, were space to allow.

    As a general analogy though most of what you adduce as arguments against public funding of science could be equally used to argue against funding defence. For example, “the Myth of Infinite Return: There is a notion that money spent on science and innovation automatically, at some point, translates into economic growth”.

    Would you agree if this were to read “there is a notion that money spent on defence automatically, at some point, translates into security”, and used as a reason to defund defence?

    Look, there is a whole lot wrong with the way public funding of science happens in Australia at present, not least the way it crowds out in many areas more potentially effective private funding. But trying to leverage this into an argument against the entire concept of public funding of science research is stupid both from a practical perspective – even IPA can’t believe that it will ever happen – and an intellectual one. That is, it is counter-productive to what should be the real objective of getting a better system – better value for desirably a lesser total outlay – in place.

  20. PaulL

    I’m not a great fan of it, but I think I see the politics.

    The argument is that health costs are rising inexonerably. Before the election I’d told some friends that if Abbot was smart he’d just say “education and health are the state’s problems, we’re getting out of them.” You can’t lose on ground you’re not competing on. He’s done that, but in so doing opened himself up to the argument that he’s left to the states an area of the budget that will keep it’s trend growth rate.

    Answer: we’ll establish a research fund, and that research fund will seek ways to increase medical productivity (i.e. reduce costs). I’ve seen no detail yet, but it certainly would be interesting if the fund focused on ways to improve clinical outcomes for a given $ spend (whether that be through new treatments or through productivity and process improvements). I doubt they can manage to actually do that, but it would be intriguing if they could.

  21. sinclair, the main reason that investment inside does not matter is 99% of research and development spending is undertaken outside of Australia.

    The critical question is the speed at which new technology is imported and mastered inside Australian firms.

    That requires an institutional environment that encourages investment in risk-taking that means low taxes and educated workforce and some R&D capacity.

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