news The Federal Government tonight revealed plans to totally stop funding the nation’s peak ICT research group National ICT Australia (NICTA) after two more years, with Communications Minister Malcolm Turnbull stating that the organisation would then need to move to a “self-sustaining model”.
NICTA claims to be Australia’s largest organisation devoted to ICT research. Founded in 2002 under the then-Howard administration, focuses both on foundational ICT research as well as spinning off that research into startup companies and licensing the technology it develops. In its time, according to its website, the group has created 11 new companies, collaborated on joint projects with a range of ICT industries, developed a substantial technology and intellectual property portfolio and built a substantial PhD program. NICTA has more than 700 people across five laboratories around the nation.
However, the Coalition has long viewed the organisation as being better funded through its own efforts. In the 2013 election campaign, then-Minister Assisting for the Digital Economy, Kate Lundy, announced Labor would support NICTA with an extra $42 million in funding. The Coalition promptly promised to cut the funding if it won the election, which it did.
In a statement issued tonight associated with the Federal Budget, Turnbull noted that NICTA’s approximate current funding levels ($84.9 million over the next two years) would be maintained, with the Department of Communications and the Australian Research Council each to contribute $21.4 million in 2014–15 and $21.0 million in 2015–16. However, after that point, NICTA would receive no more direct funding.
“It was always expected that funding from the private sector would play an increasingly important role in supporting NICTA’s operations,” said Turnbull. “NICTA’s rapid recent growth in commercial revenue, through its partnerships with domestic and overseas firms, shows it can draw funding from a wider range of sources.”
“In recognition of NICTA’s maturity and current stage of development, the Government considers the time is approaching for NICTA to stand on its own feet from June 2016. The Government expects NICTA to pursue funding from private sector investment and research grants. By making the right choices today, we are creating a stronger economy for tomorrow. This is part of the Abbott Government’s Economic Action Strategy to build a strong, prosperous economy for a safe and secure Australia.”
The funding cut will not leave NICTA destitute. Lundy estimated last year that NICTA had received funding of $564.5 million in total funding over the period from 2002 to 2015. The group’s own website notes that it is also funded and supported by the Australian Capital Territory, the New South Wales, Queensland and Victorian Governments, the Australian National University, the University of New South Wales, the University of Melbourne, the University of Queensland, the University of Sydney, Griffith University, Queensland University of Technology, Monash University and other university partners.
However, at least one of those supporting organisations — the Victorian Government — has also recently cut its funding to NICTA, in a move in February which resulted in job cuts from the group’s Victorian laboratory.
I’m on record as supporting the termination of government payments to NICTA, and I support this move by the Government today. As I wrote back in September last year (and my view has not changed):
“This isn’t the first time funding for NICTA has been threatened — this tends to happen at every Federal Election, and you can understand why. It’s hard for politicians to see the advantage in maintaining an organisation like NICTA, when it seems to soak up so much public funding and yet return so little in benefits to the Australian IT industry. Many people, including myself, have long wondered why the Government doesn’t just take the money it’s spending on NICTA and re-allocate it into tax breaks for the IT startup sector in Australia. That’s where most of the technology innovation in Australia happens — and it happens without support from NICTA.
I don’t personally have a problem with the funding being cut. I don’t see it as the role of the Federal Government to directly fund initiatives such as NICTA. In effect, by doing so, the Government is acting as an investor in projects which may not often have much worth. In my opinion, it would be better for the Government to support the early stage technology startup sector as a whole through significant underlying tax incentives (including to angel and venture capitalist investors), and then let the market sort out where investment should take place. Alternatively, it could fund the education sector more directly to pump up technology skills.
I think NICTA is viewed by many in Australia’s technology sector as a bit of an irrelevance. I’m sure there are many people who put a lot of faith in it. But personally, I’ve never believed that it has a huge impact on the sector, one way or the other.”