The latest cuts to research will be a ¡°double whammy¡± for Australian universities, reducing their ability to run laboratories or pay technical staff just as they gear up for a windfall in project funding, a sector leader has warned.

Nicholas Fisk, deputy vice-chancellor (research) at the University of New South Wales, said that the freezing of research support funding for four years had come at the worst possible juncture. While it would present problems at any time,?its emergence now ¨C as universities anticipated major disbursements from the Medical Research Future Fund ¨C would precipitate a ¡°real crisis¡±.

The MRFF is supported by both major political parties and will have a projected A$20 billion (?11.4 billion) at its disposal when it is fully funded in 2020-21. Professor Fisk said it would be the world¡¯s largest sovereign future fund of its kind, in effect doubling Australia¡¯s investment in medical research.

But because it?does not include provisions for indirect costs, such as power, consumables and technicians¡¯ salaries, it will force universities to dig deeper into their own reserves to meet these expenses.

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For every dollar in research project funding, Professor Fisk said, universities needed another 85 cents to cover the indirect costs. But they received only about 25 cents from the government ¨C and once the MRFF starts operating fully, that figure?will sink further.

¡°The more successful we are, the more we¡¯re penalised and the more money we have to find,¡± Professor Fisk said. ¡°Last year we got hammered with a funding freeze in education, and again this has come just before Christmas when there¡¯s little time for pushback.

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¡°We¡¯ve had a series of ministers who don¡¯t seem to be prioritising the health of the sector. They don¡¯t get the message about the return to the economy from research.¡±

The Group of Eight universities said the A$329 million cutback, outlined in the government¡¯s budget update, was unconscionable. ¡°It totally undermines Australian research and specifically initiatives such as the MRFF,¡± said chief executive Vicki Thomson.

¡°In a budget that we are told is heading for surplus, the biggest decrease is to research block grants. It sends a dreadful message to the international research and investment communities.¡±

Education minister Dan Tehan said universities would receive A$1.9 billion in research funding next year. ¡°The government continues to support world-class research and researchers, providing record funding to universities,¡± he said.

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But Griffith University policy specialist Tony Sheil said it was ¡°contradictory¡± for the government to expand one stream of research funding while reducing another. ¡°It¡¯s difficult for the university sector to determine the government¡¯s strategy,¡± he said.

Mr Sheil blamed a disconnect between the health portfolio¡¯s administration of the MRFF and the education department¡¯s handling of research. He said that universities would have to use their block grants sparingly, and look to other avenues of funding to support their research.

¡°There¡¯s never been a more important time for universities to look at our surpluses and consider how we invest in our own development, because we won¡¯t get there on government funding alone.¡±

Professor Fisk said the cuts to research block grants were baffling, given that a parliamentary?had found that they were already inadequate.

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He said the cuts would hit hardest in two to three years, costing his university A$30 million and ¡°about 70 staff¡±.

john.ross@timeshighereducation.com