It is a pleasure to rise to give further support to the Medical Research Future Fund Bill 2015. It is a very important initiative that supports what is a very successful industry for our country—an industry that provides a massive number of jobs but, more importantly, has huge future potential going forward.
It is a great service that this government has committed such a high level of resources to back and to underpin that sector and to make sure that we fully take the opportunities that are arising in the sector.
I will start with a more prosaic example from my home state of Queensland. Recently I had the opportunity to visit a medical products firm called Cook Medical at Mount Gravatt, just south of Brisbane. Cook Medical is actually part of a large overseas conglomerate based in the United States, but it does a substantial amount of manufacturing here in Australia. Indeed, the headquarters of Cook Medical choose to do this manufacturing in this particular part of Australia because of the available skills and capabilities, and because our general environment is conducive to the manufacture of these products.
We should celebrate businesses like Cook Medical more than perhaps we get to do, because they produce fantastically innovative and wonderful medical products that save people's lives and improve the quality of people's lives. Cook Medical produce a range of products, but specialise in stents. I did not know anything about stents until a few years ago when my grandmother got quite sick and had a stent inserted. I suppose when you first hear about how these things work you wonder who comes up with this sort of idea? 'We'll stick something up your leg and put it all the way up to your heart and that will make you feel better'.
I feel for the first person who had to undergo that operation as a guinea pig, but it did work. We have had stents for, I think, less than 20 years or so, and they have saved or extended tens if not hundreds of thousands of people's lives. They have certainly extended my grandmother's life so I am very thankful for it.
Cook Medical produce stents for people like my grandma here in Australia but they also export them around the world. Indeed, when I went to see them they were producing stents for patients in Japan. They had received an MRI scan of a Japanese patient and they looked to see what specific product they should produce and supply to that person. It is amazing technology and it is only going to grow. It is probably going to become more customised and produce more opportunities for Australia to be part of this sector—not only to be in the business of saving people's lives but also to create jobs and opportunities for very smart young Australians who want a future career. I met a young lady there who had just come out of Griffith University in Brisbane, and she had been given a job as well as an opportunity there as a graduate. It is not just for the tertiary graduates; they have a whole floor of people manufacturing stents. It is pretty much what you would see in a textiles or clothing factory: rows and rows of people at sewing machines and knitting facilities, creating stents.
It has clearly become difficult for business in Australia to specialise in things like textiles and clothing, which are relatively labour-intensive forms of manufacturing. It is manufacturing like this that we do have a future opportunity in, because it is value adding in a business that is of high value and that has a high level of customisation; therefore, the issues of economies of scale and mass production are not as prevalent or as keenly felt. Cook Medical explained to me that they would not think of outsourcing the manufacturing of these products overseas because of the natural advantages they have here in Australia, where they are close to the design team who design the stents. It is very important to have that communication between those who design the products and those who manufacture them, because what can seem like a good idea in theory or design may not be practical when it comes to manufacturing. It helps the designers to get things right when they have got the people actually making the products so close by. So it is a great positive, new story for our manufacturing sector, for our medical sector and for our innovation sector. It is these sectors that we should seek to promote and support more, and it is a great initiative of the government to establish a substantial medical research fund that we hope to grow to $20 billion over years—a fund that will be starting with $1 billion from the Health and Hospitals Fund of the former government and a fund that we hope to provide $400 million in additional research and development funding over the forward estimates.
That sort of money will not just fill a gap in the medical sector; it has the potential to fix some of the issues that we have in our broader innovation sectors. Right now we have a Senate economics committee inquiry into innovation, and one of the issues that have arisen in that inquiry—it is not one that is new to policy making but it is one that has been emphasised in that inquiry—is that we do very well as a country at producing ideas. We do very well at having high-qualify researchers. We rank highly in our ability to produce high-quality research and our universities are remunerated to make sure, through the ERA rankings, that they do produce high-quality research. The issue we sometimes have is translating that high-quality research from good ideas and good papers published in good journals to actually commercialising them into products that create jobs and wealth. We do fall down on those measures. So, while we are one of the top countries in the world for producing those published papers, we are at the bottom of the table in the OECD in terms of commercialising those ideas into some kind of saleable product.
I note that the detailed projects that the Medical Research Future Fund will fund are yet to be worked out and will be worked out through the governance arrangements defined in this bill. I do hope that there is a focus by the Australian Medical Research Advisory Board that will be established under this framework. I do hope that they do consider the need to concentrate more on commercialising the good work that we already do in the medical field into commercial, saleable products that support businesses here in Australia. I note that the advisory board will develop an Australian Medical Research and Innovation Strategy and Australian Medical Research and Innovation Priorities. I do hope that those sorts of things are considered. I am sure that by the time that strategy and those priorities are set, the Senate economics committee will have wrapped up and reported, and perhaps we could point out a few things in this field that we think should be done. We do have a very great opportunity here with this fund, and it would remiss of us not to completely maximise that funding opportunity.
We are hoping to establish the $20 billion fund as a capital reserve, as something that would put a base into medical research funding in this country, and I think Senator Edwards may have raised a point about how important it is that we do have some stability for people in this sector. Many of the products that are developed in this sector—indeed, probably most of them—require an investment timeline, a pay-off period of decades, not just years. It is a very risky area where investments may not pay off. I think it is a sector that requires, more than most, some form of stability from government, some form of continuity, and I very much hope that, if this bill is passed and if this fund is established, we do ensure over many parliaments and different governments that it continues to fund research in a stable and continuous fashion for the medical research sector. It is not a sector that could cope well or respond well to ups and downs of different funding and different decisions.
If we were to do that, it would dent confidence in that sector and perhaps limit the leverage this fund might generate in the private sector. While this is a substantial investment of public resources into medical research in our country, it is something we hope would be leveraged to create an even more substantial investment from the private sector in medical research in this country. That will happen only if a stable and consistent policy environment is delivered.
We will make sure the new fund ensures that Australia continues to advance the world-leading medical research projects we are lucky enough to have housed here and that we continue to attract and retain first-class researchers and ultimately deliver better health outcomes for all Australians. One thing we do have to tackle, not just in this country but across the world, is ensuring that we can continue to improve how we deliver health services in a cost-effective way. It is no secret that health funding, both public and private, both in this country and around the world, is growing at very high rates. The pressure will probably only continue as our population ages and new customised medical products are developed. But we do have a limit, and we need to make sure that the health budget we do have in this country, which is substantial, is spent in a way that delivers the biggest bang for the buck. If we do not do that, two things will happen: we will have to find more money to pay for these things, or else restrict services that are available, and we will not be able to fund as many lifesaving and life-improving products as we could.
So, we have an obligation to make sure that our hospital and health funds more generally are spent efficiently and that investments in research and development through this fund make sure that that happens. That will ensure that we deliver a sustainable health system into the future and will enable vital research that will lead to the discovery of new medicines and technologies for the prevention, treatment and care of all Australians. All Australians stand to benefit from ongoing investments in medical research through this fund—both directly, through improved health, and indirectly, through enhanced productivity and economic growth. As I said earlier, it will also make sure that we build on the huge opportunities that exist in our medical research and innovation sector and help deliver a more sustainable health system.
Various funds have been established in the past few years by different governments, and some have asked, why establish a new fund? Well, with this fund we want to achieve a few things. We want to focus on research, because we think that is a great opportunity for our nation, as I have outlined, and we want it to be capital protected so that we have an ongoing, stable amount of money there to support research—money that is not dived into for various, sometimes politically motivated, programs. And we want to deliver a national approach to medical research and innovation across the entire country. With that in mind, this bill provides for funds to be distributed to state or Commonwealth corporations that are engaging in medical research.
We announced in the latest budget that this fund was due to commence on 1 August, subject to the passage of this legislation. Obviously that date has passed, but once the legislation is passed we will establish the fund and transfer that $1 billion from the Health and Hospitals Fund. The delay in the commencement of this fund will impact the level of investment earnings over time, but the estimates previously provided in the budget will be revised later this year. This is a fund that will eat what it kills, basically: whatever it makes and funds, it will be able to spend. So, while there are certain estimates in the budget, the finalised spending of this fund will be determined by the earnings of the fund itself, which will be governed by the Future Fund, as are other funds in the Commonwealth.
I applaud the government for focusing on this area, because I think there are huge opportunities for our country in medical research. It already underpins thousands of jobs. It is an area that has been highlighted both by the Chief Scientist, Ian Chubb, and in the government's STEM policy, as well as industry policy—industry growth centres last year. This fund helps and complements those policies to ensure that we do in fact take the great opportunities that exist to provide health care to Australians and to the burgeoning middle class in Asia, which will certainly be demanding better health outcomes. And what better country to provide those outcomes than one in the same time zone that has a proven track record and that is providing innovative and new health outcomes?