I want to set out, carefully, a piece of arithmetic that I think deserves more attention than it gets. Queensland has roughly 20% of Australia's population and contributes about 19% of national GDP. Yet the state receives less than 14% of National Health and Medical Research Council funding and under 13% of Medical Research Future Fund funding. By contrast, Victoria, with 25% of the population, has most recently received 42% of NHMRC funding and 45% of MRFF funding.
Those are not numbers that sit comfortably together. The first instinct, when a state is so far below its population share, is to assume the state is doing something wrong, or not doing something it should. I want to argue the opposite. The gap has very little to do with the quality of the work being done in Queensland's research institutes today, and a great deal to do with a hundred and fifty years of history that the funding system has never been asked to account for. I write this as a Queenslander and as a historian, and the historical case is the part of the argument I am best placed to make.
What the gap costs
It is worth being precise about the size of the gap before reaching for explanations. The shortfall against Queensland's population share has been estimated at roughly $65m a year, and somewhere in the order of 600 to 700 jobs that the state's research sector would otherwise support. These are estimates, and I would not want to lean on the exact figures too hard, but the order of magnitude is the point. A state contributing close to a fifth of the national economy is funded, in the most strategically important industry of the coming century, as though it were contributing well under a seventh.
This is not a complaint about Queensland being hard done by in the abstract. The health and medical research industry is, on the most direct measure, the kind of high-value, hard-to-replicate work that a high-income country has to do if it intends to keep being a high-income country. Australia's standing on the Harvard Kennedy School's index of economic complexity has slipped from 55th in 1995 to 82nd, a slide that observers have linked directly to the country's declining expenditure on research and development. Gross national spending on R&D as a share of GDP has fallen by almost 20 per cent since 2008, when the global financial crisis took away the surpluses that had been quietly funding it. Funding research is exactly the kind of spending that is easy to cut when budgets are tight and almost invisible to voters when it is cut. The bill arrives later, and it arrives for everyone.
The hundred-year head start
To understand why Queensland sits where it does, it helps to compare the two states at the point where their research institutions were founded, rather than at the point where their grant applications are now assessed.
By the time the Moreton Bay settlement gained its independence from New South Wales in 1859, Victoria had already established the Royal Melbourne Hospital, the University of Melbourne and the Royal Women's Hospital. The Royal Children's Hospital followed in 1870. These institutions now form the core of Melbourne's Parkville precinct, which remains the densest concentration of medical research in the country. Off the back of one of the largest gold rushes in history, the colonial Victorian government and its philanthropists were able to build and endow institutions on a scale Queensland could not approach. The Walter and Eliza Hall Institute was established at Parkville in 1915. The following year, Melbourne's spell as the temporary national capital brought it Commonwealth Serum Laboratories.
Queensland's starting position was almost the inverse of this. Brisbane's first major hospital, the Brisbane General at Herston, was built in 1867 on public subscription and a small government subsidy. It was a near thing that it was built at all. That same year a modest gold find at Gympie arrived just as the London banks were preparing to foreclose on a colonial government carrying millions of pounds of debt against a population of only 80,000. Without that gold, Queensland would very likely have been handed back to control from Sydney. The hospital that did get built was never adequately funded by subscription and limped along until the State Government took it over in 1917.
The research institution came later still, and from almost nothing. In 1947 a leftover World War II United States Army hut sitting near the hospital was handed to the newly formed, state-funded Queensland Institute of Medical Research. Eleven staff worked in that hut for the next thirty years, producing genuinely significant work on tropical diseases in accommodation that no overseas scientist was ever tempted to join. It was not until 1988 that the Queensland Government built the institute a permanent home of its own.
A near-agrarian economy, by design
The deeper reason for the gap is that Queensland spent most of the twentieth century as an agricultural economy, and for a long stretch that was not an accident but a policy. Until 1957, the Queensland Government actively encouraged citizens to take up small subsistence-style farms, in part as a measure to keep them off the path to Communism. Sir Leo Hielscher, who served Queensland Treasury from 1964 to 2010 and knew the state's finances as well as anyone alive, described the Queensland economy of the early 1960s plainly as "Third World".
That assessment is not rhetorical exaggeration. In 1947, the year Queensland's medical research industry began life in its army hut, the state had a population of just 1.1 million people spread across 1.8 million square kilometres, an area roughly seven times the size of Victoria. There were 1.2 million people in Melbourne alone, against Brisbane's 402,000. It was not until the 1960s that Queensland had built enough high schools to lift the compulsory school leaving age from 12 to 15. A state cannot endow research institutes on the philanthropic and tax base of a population that is small, dispersed and only beginning to finish secondary school.
The modernisation of Queensland from that near-agrarian base is, as it happens, the subject I spent several years studying, and the transformation that began under the Nicklin Government from 1957 onward is the foundation everything since has been built on. But the relevant point here is the timing. Queensland was still constructing the basic apparatus of an industrial economy at the very moment the southern states were already several generations into building and endowing the institutions that today win the lion's share of competitive grant funding.
Catching up is not the same as charity
This is where the argument turns from history to policy. If Queensland's lower funding share reflected weaker work, the remedy would be to do better work. But the evidence does not support that reading. Queensland today is a $2.1bn-a-year research economy. Gardasil, which has driven a roughly 90 per cent fall in the prevalence of the human papillomavirus and sells more than US$1 billion a year, was developed in Queensland. A universal malaria vaccine with the potential to save many lives a year has been developed in Townsville. Five of the state's universities have been rated above or well above world standard for medical and health sciences. The work is there. What is missing is a funding share that matches it.
A competitive grants system that assesses every application on present-day merit, with no weighting at all, looks neutral. In practice it quietly rewards the states that had a hundred-year head start in building the institutions, the endowments and the concentrations of senior staff that make applications competitive in the first place. The system is not biased against Queensland on any single decision. It is biased across history, by assessing as though history did not happen.
If Queensland health and medical research were a student applying to university, it would qualify for every form of assistance we extend to applicants from genuinely disadvantaged backgrounds, and nobody would call that assistance unfair. The case for weighted, catching-up grant funding for Queensland rests on exactly the same principle. It is not a request for charity. It is a request that the funding system account for a structural disadvantage it currently pretends does not exist.
None of this gets easier if it is left alone. R&D is the spending governments cut first and voters notice last. But countries, like people, come out of a downturn one of two ways: either equipped for the world as it has actually become, or still hoping the world will keep paying them for what they used to do. Queensland spent a century learning that lesson the hard way. A funding system that finally took the state's history into account would be one small way of making sure it does not have to learn it again.