Funding into environmental R&D up, but not in line with inflation

Government expenditure on research and development (R&D) rose modestly in 2024 to 2025, with environmental sciences emerging as the largest area of investment as funding increasingly aligns with Australia's net zero ambitions.

New data from the Australian Bureau of Statistics (ABS) showed government and R&D spending increased 1% to $4.4 billion in 2024-25 compared to 2022-23. However, when adjusted for inflation, expenditure declined 4% in real terms.

ABS head of business statistics Tom Lay said the increase represented the weakest growth in government R&D spending since 2018-19.

"This 1% increase in government R&D expenditure is the lowest since 2018-19, when it grew 2%," Lay said.

Government spending on R&D as a proportion of gross domestic product also slipped, falling from 0.17% in 2022-2023 to 0.16% in 2024-25.

Environmental sciences recorded the largest increase in funding, rising $224 million, or 55%, to becoming the leading field for research expenditure across government organisations. The sector overtook biomedical and clinical sciences, which saw spending increase by $78 million, or 14%.

"We are continuing to see rises in spending towards environmental related R&D. Growth in in this area aligns with government investment to promote renewable technologies aimed at reducing carbon emissions under the Net Zeror Plan," Lay said.

Meanwhile, spending fell sharply in several other disciplines. Information and computing sciences recorded the largest decline, down $112 million, or 25%, while agricultural, veterinary and food sciences fell $67 million, or 11%.

At the jurisdictional level, Commonwealth government R&D expenditure declined 1% to $2.8 billion, while state and territory government spending increased 3% to $1.6 billion.

"At the Commonwealth level, R&D spending focused mainly on defence and environmental management. At the state and territory level, R&D spending was directed mainly toward health," Lay said,

The figures highlight a shifting research landscape as governments prioritise environmental and climate related initiatives despite overall R&D investment losing ground in real terms.