On coming to power, the Howard Government systematically crippled Australia's innovation infrastructure, and the effects are already showing. Under Labor, investment in research and development by Australian businesses was rising at a rate that would have put Australia in the top quarter of OECD countries by now. Under Howard, this investment is falling and Australia is heading into the bottom quarter.
The amount that the Government saved in the context of a total Commonwealth budget by withdrawing support for innovation is a joke. The research syndication scheme cost the Government nothing: it just diverted money from tax scams into vital early stage finance for innovators.
Maintaining the Bureau of Industry Economics cost a few million dollars a year but, as we now know, Howard and his ministers don't want to hear advice that might contradict their preconceptions. The big-ticket items, maintaining support for the CSIRO and Australia's universities and continuing the 150 per cent research and development tax allowance would have cost at most $5 billion a year, less than half the surplus.
Australia's ability to run up ever higher international debts has spared most Australians any pain from the reduction in our national innovation capacity, but the country is living on borrowed time.
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