Prime Minister, thank you very much, and in the ten minutes or so that we get to claim you, we have a brief opportunity to raise questions. And while we get microphones around and look for questions, if I could start, you just discussed in part, you just discussed in passing next month's innovation statement, which is a very exciting prospect. The topic of innovation is often hampered by blame, by people saying businesses too conservative or venture capital too shallow or universities too cut off, how is the innovation statement going to break through those stereotypes and actually get to some substance rather than play in that same space that we have heard too many times?
Well, you are essentially asking me, Glyn, what is in the innovation statement.
And, I don't want to stop anyone from the traditional task of trying to front run the Government, but we are, it is starting to take shape, we have, are consulting very widely and I can do a bit of consulting with you now. So, I will ask you for some help.
Glyn, you are a very experienced educator. You have worked in Government. You're Vice Chancellor of a big university. There is no doubt that one of our major failures is that we are, as a nation, very poor at collaboration between primary research institutions, universities for the most part, and business.
This is - we are, depending on which list, either last or second last in the OECD, apparently. It is widely acknowledged. It doesn't actually make a lot of sense why this is so because countries with a very similar culture, particularly academic culture like the UK, are well ahead of us.
Why is that so and what do you think we should do to remedy it?
The structure of our economy is the key issue here. We don't have the large corporations that invest in R & D and develop products here.
So it is somebody else's fault?
No, it's not somebody else's fault but that's part of the question, you can't solve it by changing the incentives to universities, for example. It's trivial. It can be done but it doesn't matter.
I am thinking about Warwick University in the UK. It has an industry park on which it has Jaguar, Rolls Royce and Tata all doing primary research that goes straight into their products. And so they are able to have deep engagement in a way we can dream of.
So the question is, if that is not available to us, how can we develop other sectors of the economy, innovative sectors where the research can play straight out and those are areas like pharmaceuticals and engineering services and even education services. There is lots we can do but our solutions tend to be predictable, change the incentives and make academics get their, do patents or something and that misses the point about the structure.
Well that is interesting that you say that. That's a bit of an outlier of a view. That is a rather defeatist and dispiriting one, too, I must say.
Most people are much more optimistic about Australian business and Australian universities than you appear to be. I wish I hadn't asked you that question now. This is, by the way, this is you're running against the vibe. You haven't got the new zeitgeist. The new zeitgeist Glyn is to believe in yourself, is to have a go.
Everyone I talk to thinks that the problem is that academics have got - their incentives are very much associated with publish or perish. That it is, like Alan Finkel, who is a great example. He is about to become our chief scientist.
Someone who has done both sides of the ledger. He has been a distinguished academic, and a business person, commercialised research.
He is very strongly of the view that if we can change the incentives both for academics and business, we can get some different outcomes. We should try that, we will try that.
I've got to say though, as the Vice Chancellor of one of our most important universities, don't be defeatist, you have got to be as optimistic as your students. Otherwise they will lose faith if in you, frankly.
You ‘ve got to believe that we can be different. If you start condemning yourself to failure right at the outset, that is a pretty grim approach.
The University of Melbourne has, in the last three months, spun out companies worth nearly a billion dollars and all of that money has been raised in the United States because we cannot raise that money here. There is the structural problem. So the production that is associated with those companies will all be going to the United States. The challenge for us is how do we, we have brilliant scientists, we actually have lots of great people at commercialisation, Alan Finkel is a great example and great appointment.
The challenge for us is how do we make HatchTech which is doing sort of stunning work around control of pests, how do we make it worth our while doing it in Australia, that's our challenge?
Well, I think, but we can do it. Remember we are a highly educated, 23 million strong, first world economy, right in the best latitude you could imagine - sorry longitude you could imagine, right here with this enormous opportunity.
There is always going to be more capital, frankly, available for technology, VC and so forth in the United States. So what, we import a lot of capital here to create a lot of jobs.
I would be saying - I think if you have spun out a billion dollars worth of businesses, that is something - that is what you should be talking about, boosting that and you will attract more. That is not - that is, if you like, a platform for growth, not something that you mention as a footnote.
So be bouncier Glyn, be bouncier, just because it is raining. This is the problem, it is the weather that has got to him.
Okay, we have a chance for questions. I think there is one here. I am hoping there is a microphone. If you could identify yourself, please, as you come through. I notice we have Ian Harper at the back there too.
David Uren from 'The Australian', pursuing the theme we have just embarked upon. What is the role of tax in innovation?
We are often, through history, whenever we have spoken about innovation policy, immediately we start talking about 125 per cent tax write offs or tax around employee share schemes or tax winds up being often the beginning and sadly too often the end of the discussion.
Can I just ask for your thoughts?
Well, David, I think it is a big lever, right a lot of these things are cultural. And it is true , you know, if you have a culture in organisations which is excessively hierarchical, excessively blame-based where people manage everything up, with our two differential, you struggle with innovation.
If you've got a kind of 'not invented here' culture, you will not have, that's a company that is not going to succeed.
But, so, culture is important and old companies can do well, I mean I was just last week, I was in Adelaide and I visited an 85-year-old manufacturing business in Adelaide. Now,you would think most people would say, boy, that is unlikely to be - that is likely to be struggling, given what has happened in the car industry and so forth in South Australia. This company, Philmac is 85 years old. They are a world leader in a number of niches for making, I guess, would you call them plumbing fittings, fittings for gate valves and joints and so forth, connectors for water infrastructure. They have just under 300 people working for them. They are about to expand their plant and hire another 30 people. They have got a global market. They are absolutely at the cutting edge of innovation and that is an old company.
Innovation does not have to be, is not limited to two brilliant young people cooking up a new application in their parents' garage.
Culture is very important.
In terms of tax, it is a big lever and it is certainly something that we are looking at. The changes that the Labor Party made to employee share schemes were absolutely counter-productive and we have reversed that.
Another area that is important is related to that, is clearly crowdfunding. But the R & D tax concession or tax rebate is clearly a very big factor. Right across the board, we have to look at all those measures and see how do we get the best additionality for all all of them.
The challenge with concessions and subsidies across the board, as you know, is are you actually changing behaviour? That is always the question. What is the additionality? Or is 80 per cent of the people who benefit just going to keep doing the stuff they were doing anyway?
Where is the sweet point, the fulcrum that actually tips behaviour, investment, whatever, in the manner that you think is most desirable.
Thank you Prime Minister, sadly, others have a call on our time.