National Health and Medical Research Council did not provide advice on $20 billion research fund

The federal government's main medical research agency provided no input into the Abbott government's budget centrepiece, a $20 billion medical research endowment, despite being its primary intended beneficiary.

National Health and Medical Research Council chief executive Warwick Anderson told a Senate hearing on Tuesday that his organisation had not provided any advice to the government in relation to the creation of the Medical Research Future Fund, which was announced in the May budget.

The Abbott government plans to invest savings from health measures – including the $7 Medicare fee and cuts to hospital funding – into the medical research fund until it reaches a balance of $20 billion, which is expected in 2020.

Budget documents say the capital of the fund will be protected but earnings – which are expected to reach $1 billion a year by 2022 – will be allocated to medical research, "primarily by boosting funding for the National Health and Medical Research Council".

Health department officials told a Senate hearing on Monday they only began work on the fund in April, just weeks before it was announced.

Labor said this showed the fund was set up to distract voters from unpopular measures including the $7 fee for GP visits and cuts to hospitals. The government has said the creation of the fund depends upon its health savings getting through Parliament.

"The policy development process reads more like a script for The Hollowmen than the way an 'adult government' conducts itself," Labor health spokeswoman Catherine King said.

In one episode of the satirical TV series, staffers in the prime minister's office concerned about the lack of a budget centrepiece decide at the last minute to create a $150 billion National Perpetual Endowment Fund to meet the nation's future challenges.

But Treasurer Joe Hockey rejected the criticism on Tuesday, describing claims that the creation of the fund had been rushed as "another Labor con".

"Given that there is now an inquiry into the Pink Batts program, given that Labor designed the NBN on the back of a coaster, designed "Ruddbank" on the back of a coaster, I don't think they're in any position to criticise us for having six weeks of work by public servants," Mr Hockey said.

Health department secretary Jane Halton told the hearing on Monday the details of what sort of research would be eligible for funding had not been determined.

On Tuesday, Professor Anderson said his organisation was in "early" discussions with the health department and other agencies about how the fund would operate.

Interviewed on ABC TV on Monday night, the nation's Chief Scientist, Ian Chubb, revealed he had not been consulted about the fund before it was announced in the budget.

"I didn't have any role in it," Professor Chubb said.

Professor Chubb said he did not know where the government had sought advice on the fund.

"I presume that it sought it from the Department of Health, from the National Health and Medical Research Council. I presume that it talked to people within the research sector and perhaps outside the research sector with an interest in the outcomes of medical research. But I didn't talk to them."

Professor Chubb said he would have liked to have had input into the policy, and if he had been asked for his advice he would have counselled the government "not to make it too narrow".

"Not to restrict it to a point where, for example, what it ends up doing is adding a few more tens of thousands of dollars to individual research grants or funds a few more research grants, that there are some big things that we need to do. We need to be able to fund clinical trials on a scale, we need to translate the results of medical research into patient care."

Asked why the government didn't consult Professor Chubb on the fund before it was announced, Health Minister Peter Dutton told reporters on Tuesday: "It's not a reflection on individuals, but governments have decisions to make.

"We've consulted with many people. In the end I think we've taken what many researchers have described as a visionary decision and I think it will be in decades to come hailed as one of the great outcomes of this period."

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