Spending our way out of national strife, a notion delivered in the shape of the Federal Government's $10 billion bailout package, was met with broad support. By injecting welcome pre-Christmas funds into ordinary households, Prime Minister Kevin Rudd and his Government moved to decrease our chances of feeling the pain of economic slowdown here as banks and markets come under increasing pressure. Boosting household and business spending as a way out of economic trouble is a strategy that has general approval on both sides of politics.
Little mentioned but important in this environment is an understanding that spending on medical research will help to stimulate the economy and deliver social benefits. It has not been explicitly stated but there is an urgent case that spending include an assurance that long-term medical research goals will continue to be met and that funding in the health and medical research industry will be able to grow apace. There is sound economic rationale for protecting our investment in public health. Not least of that is the fact that some of the people who will benefit most immediately from better health outcomes are working Australians on the brink of retirement. This is a generation now at an age where their health needs are becoming more complex and who inherited the superannuation reforms of former prime minister Paul Keating midway through their careers. It is their super holdings that have taken a battering at a time when they are least able to recoup losses. We all need research findings in the field of health and medical research to lead to better procedures and therapies, but right now financially battered retirees perhaps need this most.
Little reported, but critical, is the need to ensure that short-term measures designed to stimulate our economy do not occur at the expense of longer term health goals and objectives. Amid the spending-led approach to economic stimulation to mitigate international financial fears, it is somewhat paradoxical that some of the deepest concerns about funding guarantees exist among the nation's scientific community, concerned and reading between the lines that under these conditions spending in research could fall.
Policy makers could do well to consider the tangible economic benefits of biomedical research and the many ways it could contribute to financial recovery.
Economic downturns are tough but they are a real opportunity for a smart economy to invest in the future while addressing the here and now of health disparities and disadvantage, which will otherwise increase.
Financial returns from public investment in research are not immediate but there is strong evidence that they are substantial and actually stimulate economic growth.
The journal Nature Medicine quotes economic studies that indicate a 28 per cent rate of return, not a bad place to invest some past budget surpluses. Australian studies have consistently reported even greater rate of return.
Much of the gain is in a healthier, smarter and more productive workforce. Obesity, diabetes and cardiovascular disease are associated with absenteeism and early retirement, not just death and disability. This is the basis of the Victorian Government's unique WorkHealth initiative, a health intervention program designed to investigate health in the workplace. Beyond this there are more jobs in the private medical research sector. Nature Medicine also reports studies indicating that a 10 per cent increase in basic research results in a 6.4 per cent increase in the number of new medications presented for regulatory approval.
Government health spending in Australia is over $50 billion every year and more is spent in the private sector. It is growing faster than our economy and some jurisdictions project that if nothing else happens health spending will be greater than total government revenue within 25 years. Something has to happen of course and it will be the result of innovation. A simple improvement in prevention strategies through research that made a 1 per cent improvement in performance would return half a billion dollars to treasury, money that can be spent on something else in tough times. Incremental improvement in medical research, even without major breakthroughs, can make substantial gains.
Global financial turmoil is presenting a major opportunity for Australia. The United States has been the major driver of health innovation fuelled by public spending. Despite legislation requiring increased spending to maintain US pre-eminence, actual spending has fallen. China on the other hand has seized the opportunity, allocating billions to biomedical research funding over the next two years. Singapore has been doing the same for years and is continuing in the midst of its own recession. We are fortunate that medical research has always enjoyed huge public support in Australia, including bipartisan political support. The alternative, if research funding plateaus or even falls, is that teams of scientists that took years to create will break up with the most skilled leaving the country to take up opportunities elsewhere and in many cases they will be workers that we invested heavily in to lure back to our shores. Training opportunities to support a smart economy will be lost, competitiveness will be reduced and our clinical workforce, lacking exposure to innovation and research, will be deskilled.
As a nation we have already invested a great deal of money even just in attempting to reverse the brain drain. These important gains will be lost if the momentum in research and investment in scientific talent is not maintained.
Professor Garry Jennings is director of Baker IDI Heart and Diabetes Institute and president of the Association of Australian Medical Research Institutes.
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