Government sector leading the way for R&D expenditure

Government expenditure on research and development (R&D) was $4.3 billion in 2022-23, up 20 per cent in two years, according to new data released today by the Australian Bureau of Statistics (ABS). 

Robert Ewing, ABS head of business statistics, said: “Government spending on R&D is growing at a greater rate than spending by university and private sectors. This is partly due to a recovery from lower than usual spending during the COVID-19 pandemic restrictions, and also due to higher levels of funding for research associated with defence activities and emissions reduction strategies. 

“We’re seeing strong rises in spending on environmental related R&D. As Australia works toward emissions reduction targets set for the Net Zero Plan, the push to develop new ways to reduce Australia’s carbon footprint is driving R&D growth in this area.”

Spending on environmental related R&D socio-economic objectives rose by 2.7 percentage points to 19.6 per cent of total expenditure. Environmental policy, climate change and natural hazards had the largest percentage growth out of the top 10 contributors, up 55 per cent from 2020-21.   

Health continued to be the leading contributor to government R&D expenditure ($806 million), mirroring other sectors like higher education by prioritising health R&D. Defence R&D expenditure was also high at $753 million. 

Together, health and defence made up 35.9 per cent of total government expenditure on research and development. 

Looking at the different levels of government, Commonwealth government expenditure on R&D grew by 20 per cent (to $2.8 billion), while State and Territory spending rose by 21 per cent (to $1.5 billion). 

“While both levels of government had similar growth, they met different R&D spending objectives. All defence-related R&D spending was at the Commonwealth level, whilst 83 per cent of spending on health-related R&D was done at the State and Territory level,” Mr Ewing said.

“The way government R&D is funded has continued to evolve. Funding sourced from non-government institutions has been steadily growing over the last 10 years to reach 21.7 per cent in 2022-23. This is its highest share since we started collecting this data in 1992-93. 

"More collaboration between governments, universities, and the business sector – including funding from industry levies – has led to a rise in funding from sources away from the government sector."

Government spending on R&D as a proportion of GDP has remained unchanged since 2018-19 at 0.17 per cent.