AAHMS analysis: 2021-22 Federal Budget

Read more on highlights from the 2021 Federal Budget for health and medical research:

1         Summary

The biggest budget items this year were in health – $2 billion for mental health and $17.7 billion for reforming aged care in a response to the Royal Commission into Aged Care Quality and Safety. There was also a range of measures to address COVID-19 vaccine rollout and monitoring ($1.9 billion), including investment in mRNA vaccine manufacturing capability in Australia.

The most notable announcements in the research funding landscape was that the MRFF reached full capitalisation earlier in the financial year, now returning $650 million per year for medical research. The lower than expected returns from the fund in 2020, likely due to COVID-19, was addressed with a one-off investment to fill the shortfall. NHMRC and ARC funding remained steady with slight increases due to indexation.

There were also a variety of new measures for medical research including for mental health, preventative health, infectious diseases and women’s health issues. A boost for biotech came in the form of a 17% tax concession for revenue raised through medical and biotech patents dubbed the “patent box” scheme.

There is $19 billion in existing initatives for the university sector (across all their activities), however, no additional support was announced in this year’s budget. This is in contrast to the 2020 budget (October) where there was an additional $1 billion injected into the RSP to assist with the impact of COVID-19, however, this year sees the RSP return to pre-COVID levels with some indexation.

2         Policy priority areas – new measures

2.1       COVID-19 and pandemic response

Vaccine rollout and monitoring

The Government will provide $1.9 billion over five years from 2020-21 to distribute and administer COVID-19 vaccines to residents of Australia, including:

  • $777.8 million over two years from 2020-21 for the COVID-19 Vaccination Program, including for surge workforce, general practitioners and community pharmacies to administer vaccines.
  • $510.8 million over two years from 2020-21 for the National Partnership on the COVID-19 Response for the states and territories to administer vaccines.

$358.8 million over five years from 2020-21 to support the implementation, monitoring and reporting of the vaccine rollout, including:

  • $233.8 million over two years from 2020-21 for COVID-19 vaccine distribution, vaccine consumables, logistics and storage.
  • $6.7 million over two years from 2020-21 for the national communications campaign for the COVID-19 Vaccination Program.

The Government has also entered into advance purchase agreements for an additional 30 million doses of the Pfizer BioNTech vaccine and has provisioned to purchase additional vaccine doses, including mRNA vaccines – commercial-in-confidence (amounts not available).

COVID-19 Vaccine Manufacturing Capabilities for mRNA vaccine manufacturing

Funding to the Department of Industry, Science, Energy and Resources to work with the Department of Health to develop an onshore mRNA vaccine manufacturing capability in Australia, including:

  • continuing negotiations with existing manufacturers and approaching the Australian market to establish an onshore end-to-end mRNA vaccine manufacturing capability in Australia to develop COVID-19 vaccines and other potential products, such as flu vaccines.
  • approaching the Australian market for a long-term sovereign mRNA manufacturing capability to establish end-to-end onshore capability. There is a new budget measure for this although the amounts were not provided.

The funding amount is not available for publication (nfp) – commercial in confidence.


$204.6 million in 2021-22 to support continued access to universal telehealth for all Australians, building on previous expenditure, totalling $3.6 billion since March 2020 to support continuity of care in a COVID-safe way.

Aboriginal and Torres Strait Islander health

$11.2 million to support regional and remote Indigenous communities throughout Australia. This will support continuation of the remote response to COVID-19.

2.2       Climate change and health

$4.0 million in 2021-22 for mental health support for those impacted by the bushfires. This will continue to provide free trauma and distress counselling sessions.

2.3       Research in the health system

Clinical trials

$6.0 million over four years to enhance Australia’s status as a leading option to conduct clinical trials by continuing the successful Encouraging More Clinical Trials in Australia. This is aimed at supporting collaboration with jurisdictions to grow the number of clinical trials run in Australia, while also removing red tape for industry and states and territories from the process.

Mitochondrial donation in research settings

$4.4 million over four years ($10.3 million over 10 years) to introduce mitochondrial donation into research settings in Australia and to help facilitate a clinical trial of mitochondrial donation to support families that may be impacted by severe forms of hereditary mitochondrial disease. This will enable the introduction of a new assisted reproductive technology aimed at preventing children being born with severe, life-threatening mitochondrial disease – a devastating genetic disorder which has no cure.

2.4       Workforce

Women in STEM

Funding for women in STEM fields including:

  • $42.4 million over seven years from 2021-22 to establish the Boosting the Next Generation of Women in Science, Technology, Engineering and Mathematics (STEM) Program by co-funding scholarships for women in STEM in partnership with industry.
  • $38.3 million over five years from 2021-22 to increase grant funding available through the Women’s Leadership and Development Program.

Industry PhDs

$1.1 million over two years for universities to enrol students in “Industry PhDs”. This is aimed at creating new employment pathways for students and boost financial incentives. This measure will introduce an additional weighting in the Research Training Program funding formula for PhD students who undertake an industry placement.

3        Health and medical research funding

3.1       MRFF

MRFF capital

The Medical Research Future Fund (MRFF) reached full capitalisation of $20 billion in July 2020. The balance of the MRFF capital is now over $21 billion and the estimates show that a balance better than expected compared to the October budget.







MRFF Funding for medical research

There will be $2.4 billion in medical research funding through the MRFF over the next four years. MRFF funding is expected to be $200 million lower in 2021-22 compared to last year’s estimates, likely because of low investment returns on the fund during the COVID-19 economic downturn in 2020. An additional one-off investment of $172.5 million was provided to address this shortfall.

A number of new grant opportunities were announced with the budget including:

  • $70 million over 3 years for the 2021 Rare Cancers, Rare Diseases and Unmet Need (RCRDUN), across 7 streams.
  • $15 million over 3 years  for the Coronavirus Research Response – 2021 COVID-19 Health Impacts and Vaccination Schedules, across 3 streams.
  • $15 million over 4 years for the 2021 Improving the Health and Wellbeing of Aboriginal and Torres Strait Islander Mothers and Babies.

3.2       NHMRC

NHMRC research funding through the Medical Research Endowment Account remains steady for 2021-22 with some indexation, delivering $3.6 billion over the next four years.


3.3       ARC

There have been no significant changes in ARC funding compared to last year’s budget. Last year, we saw overall ARC funding remaining steady but there was funding shifted from the Discovery program into the Linkage program and this has continued into 2021-22.

Discovery program


Linkage Program


4         New measures for health, research and infrastructure

4.1       Mental health research

$26.9 million over four years from 2021-22 to provide additional support for people with eating disorders and their families, and $13 million to establish a National Eating Disorder Research Centre. This is part of the larger $2 billion mental health package announcement.

4.2       Preventative health research

$23.1 million over five years from 2020-21 (including $1.5 million per year ongoing) to further support preventive health activities, including research such as:

  • $1.9 million in 2021-22 for preventive health research and scoping activities, including a national health literacy strategy, to inform a National Preventive Health Strategy.
  • $6.9 million towards five lung cancer care nurses to provide support to patients and their families and for lung cancer related research activities.

4.3       Infectious diseases research

$4.8 million to continue the Blood Borne Viruses and Sexually Transmissible Infections Research Program, reducing the incidence of HIV, hepatitis B and C, chlamydia, syphilis and gonorrhoea.

4.4       Women’s health

$21.6 million in supporting women and girls, including those suffering from or at risk of endometriosis, to improve their health through continued funding towards critical women’s health activities, in line with the National Women’s Health Strategy 2020–2030 (the Strategy) and the National Action Plan for Endometriosis.

4.5       Biotech and commercialisation – “patent box”

Concessional effective corporate tax rate of 17% – A “patent box” tax regime to further encourage innovation in Australia by taxing corporate income derived from patents. The concession will apply to income derived from Australian medical and biotechnology patents from income years starting on or after 1 July 2022.

4.6       University support

No new funding was provided to the Research Support Program (RSP) for universities. Last financial year, the RSP received an injection of an additional $1 billion to assist with the loss of revenue due to COVID-19 (primarily from loss of international student income). This year we see the RSP return to pre-COVID levels.

Research Support Program

Research Training Program


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