Health and medical research spending delivers “exceptional” returns: report

Health and medical research spending not only delivers economic benefits and supports highly skilled jobs, but it delivers significant savings in terms of health benefits.

So says a report by Lateral Economics commissioned by Research Australia, an industry organisation representing health researchers.

The report, titled The Economic Value of Australia’s Investment in Health and Medical Research: Reinforcing the Evidence for Exceptional Returns, was released today.

The report finds that if spending on health and medical research was maintained according to historical levels over the next 15 years, then revenues of $73.7 billion could be generated along with $150 billion in savings due to health benefits.

Lateral Economics CEO Nicholas Gruen noted policy makers need to focus on bearing short term costs in order to reap long term benefits.

“This message has been front and centre when it comes to removing past interventions like tariffs, state monopolies and agricultural price supports. But economic reformers have been much more equivocal about building economic institutions even where they accept the in principle case for doing so.

“Yet that’s what must be done in R&D. Supporting R&D is costly and therefore inevitably subjected to the usual short term political pressures.”

The report recommends that policy makers set a target, such as doubling health and medical research expenditure over a decade, which would require growth of 8 per cent per annum.

The report also warned that cutting expenditure in times of fiscal austerity can significantly harm research even given the clear benefits of maintaining research expenditure.

It also recommends that the National Health and Medical Research Council regularly report the effects of its funding on the Australian economy to reinforce to government and taxpayers the benefit of health and medical research.

The full report can be downloaded from the Research Australia website.