From The Minister: Research That Strengthens Australia’s Industrial Fabric

**This story originally appeared in the July 2026 edition of AMT Magazine**

A succession of global shocks – wars, pandemics and supply chain crises – has shown just how important those security and resilience objectives are. As the poet Dorothea Mackellar famously put it, we live in a sunburnt country. We are also, at times, a drought-prone country. Economic resilience means using water in a way that doesn’t put additional pressures on Australia’s water supply. Equally, it means building more energy for new industries and making modern manufacturing technologies more energy efficient.

The data centre expectations that I announced earlier this year put strong emphasis on energy additionality and water efficiency. But traditional industries can advance the work of driving efficiency and economic resilience, too. Research and development is an essential part of that effort.

Australia has world-class researchers in our universities, industries and national science agencies. We also have genuinely innovative businesses onshore. What we have not always possessed is a truly national, mission-oriented research and development system that can connect the two.

The independent Ambitious Australia report, chaired by Robyn Denholm and published earlier this year, sets out what a more coherent approach looks like. The report calls for less fragmentation and more strategic focus across the national research and development system.

That is a generational reform agenda. It will not be delivered in a single term, let alone a single Budget. But this year’s Federal Budget takes the first crucial steps in response.

First, the Government is establishing a new National Resilience and Science Council to better coordinate public sector investment in research and development, aligning that effort more closely with key national priorities. This cornerstone reform will replace pre-pandemic frameworks with a more mission-oriented, fit for purpose Council that help turn the best scientific advice into economic and industrial success for Australia.

Second, this Budget introduces a package of measures to simplify and focus the Research and Development Tax Incentive (RDTI) for greater impact. The Budget lowers the intensity threshold for RDTI and also lifts the maximum RDTI expenditure threshold from $150 million to $200 million, to make Australia a more attractive place for large firms to invest in R&D. Better targeting of the RDTI is expected to increase R&D investment by young firms by $400 million per year.

Third, the Government is expanding venture capital tax incentives from 1 July next year, encouraging more investment and unlocking patient private capital for young, growing firms with significant innovative potential.

Finally, this Budget invests in the infrastructure and development of Australia’s public science agencies, so they can make the biggest possible contribution to national productivity and resilience. That includes more than $387 million for the CSIRO over the next four years; $21.7 million to support the Australian Space Agency’s leadership of a burgeoning industry with real advanced manufacturing benefits; and $273 million to sustain the National Measurement Institute, which underpins vital trade and transactions and supports consumer confidence.

A stronger R&D system is how Australia will grow more great startups and develop more first-of-a-kind technologies. It’s how Australia can provide more good manufacturing and science jobs for Australians, especially in outer suburban and regional communities.

Recently, with the Member for Corangamite Libby Coker, I visited Xefco, a world-leading textile manufacturing startup located at the ManuFutures hub at Deakin University’s waterfront campus in Geelong. Thanks to a $4.99 million matched funding grant from the Albanese Government’s Industry Growth Program, Xefco will be able to commercialise and grow its world-first Ausora® technology for textile dyeing.

In a nutshell, Ausora® is a water-free dyeing and finishing process for application in textile manufacturing. It eliminates wastewater, almost eliminates chemical consumption and delivers 90 per cent energy savings. And unlike some earlier waves of technological adoption in that sector, Ausora® is owned and developed by Australians, elevating Australia’s standing in a global market valued at more than $2 trillion.

Crucially, Xefco did not achieve this breakthrough alone. Ausora® is the product of deep collaboration with Deakin University’s Institute for Frontier Materials, the Innovative Manufacturing Cooperative Research Centre and the ARC Research Hub for Future Fibres. It’s a very Geelong story – and also proof of how Australian research excellence supports industrial success when the right mission is set and the right concentration of effort directed to achieving it.

Textiles manufacturing helped make colonial Australia an economic powerhouse. That industry has been a driver of Australia’s industrial, technological and social development. That history isn’t incidental. It’s central to the story of modern Australia.

Like other sectors of Australia’s economy, textiles, clothing and footwear manufacturing is finding new ways to contribute to the mission for a more efficient, productive and resilient Australia.

What’s at stake in the reform of our research and development system is nothing less than the future of Australia’s industrial capability, productivity and economic resilience. It’s the ability to manufacture things like textiles efficiently and sustainably – especially when global supply chains cannot be relied on. A more effective research and development system will strengthen Australia’s industrial fabric at a critical juncture in our history.

Senator the Hon Tim Ayres – Minister for Industry and Innovation

Minister for Science