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Australia’s health and medical research sector is a global leader in innovation and discovery. Yet, a hidden ethical problem in how research grants are funded threatens to undermine this reputation and the researchers it relies on.
The issue centres on an obscure detail in grant applications: how researcher salaries are costed. This seemingly technical matter has profound implications for professional integrity, workloads, workforce sustainability, research quality, and how we advance health and healthcare in Australia.
The problem
When researchers apply for grants from the National Health and Medical Research Council (NHMRC) and the Medical Research Future Fund (MRFF), they are required to budget for staff salaries using the Personnel Support Package (PSP) rates provided by these funding bodies, rather than actual university salaries.
The use of PSP rates was designed to promote fairness and administrative simplicity. The use of PSPs ensures that salary costs are based on the researcher’s role function and responsibility, rather than on the individual’s expertise, salary expectations or institution. However, PSPs typically only cover around 50-70% of salary plus oncosts, which are determined by an institution’s enterprise agreement. Furthermore, as the PSP rates are not index linked, the funding deficit increases annually. This creates a large and systemic funding shortfall, which forces impossible choices:
- compromise on research quality, by spending less time on the work or hiring less experienced researchers;
- rely on unpaid labour to fill the gap, potentially exploiting researchers’ goodwill, passion and commitment, leading to professional burnout; or
- apply for a higher PSP level and time fraction than actually needed to ensure income meets expenditure, posing issues for project feasibility and compromising researcher integrity.
Each scenario undermines the transparency, fairness, integrity and sustainability of publicly funded research.
A problem with a solution
Unlike Australia, many other countries adopt full economic costing, funding the ‘true cost’ of research based on actual salaries and oncosts, infrastructure, and overheads, plus a margin for sustainability. This allows institutions to cover all expenses and invest in future research capacity.
Why does properly costed research seem such a radical idea in Australia, when it is standard practice elsewhere? The paradox is even harder to comprehend when we consider the current funding landscape.
In Australia, the MRFF was originally intended to reach $20 billion at maturity by 2020 but it has grown to $24 billion. The fund was supposed to distribute $1 billion annually to support research but has been capped at $650 million annually since 2021. This leaves $350 million per year unspent — money that could be used to address the very salary shortfalls created by the PSP system. Furthermore, Recommendation 28 of the 2024 Australian Universities Accord recognised the urgency of addressing the full economic cost of university research.
The real cost of underfunding
The use of low PSP rates (relative to the true costs of employment) shifts the responsibility for fully funding researcher salaries from grant-making bodies to employing institutions, which must then bridge the salary gap, straining internal budgets and adding administrative complexity to the process of supporting research.
The human cost is even more concerning. Over the past five years, more than 60% of health and medical researchers in Australia have left the sector. The talent drain disproportionately impacts early- and mid-career researchers, and women. Those who remain face considerable challenges including: lack of funding (72%), job insecurity (54%), lack of work-life balance (47%) and high administrative burden (42%). For researchers — most of whom are on externally-funded, fixed-term contracts — the consequences are severe:
- their professional integrity is challenged with every grant submission;
- there is an implicit expectation that they will work additional unpaid hours to compensate for the underfunded grants; and
- there is no flexibility in the system to enable them the funded time to write the next grant proposal — who or what is funding that time?
Importantly, the consequences extend beyond the current research workforce and threaten future research. The unpredictability and financial instability of academic life discourages talented individuals from pursuing research careers, particularly compared to other sectors that enjoy better job security, financial compensation and/or work-life balance.
Furthermore, it threatens Australia’s ability to innovate and respond to health and healthcare challenges. Research breakthroughs depend on sustained investment in both projects and people. When we underfund the people, we undermine the research itself.
An ethical call to action
The solution is straightforward: align Australian research funding with international best practice by adopting full economic costing, based on actual salaries and oncosts. The MRFF’s unspent funds provide an immediate opportunity to close the salary gap and strengthen research capacity.
Ensuring grants cover real costs would mean researchers no longer need to chase multiple awards to cover salaries. Some will argue that this will reduce the total number of grants funded. But this objection misses the point. Research quality depends not only on the projects initiated but also on whether they can be completed properly by adequately supported researchers. Underfunding does not create efficiency — it creates uncertainty and compromises research integrity and sustainability.
At its core, this is an ethical issue. When we, as a society, fund health research, we ask researchers to dedicate their expertise to advancing knowledge for the public good. The current, broken system asks those same researchers to absorb the gap between what research costs and what grants provide — this is evident in the numerous hours that are spent writing grants, and managing the burdensome administrative and recruitment processes for all the small grants and short-term contracts that arise from such a system, and creates pressures on researchers to misrepresent what it takes to do research. This is neither fair nor sustainable.
If Australia wishes to maintain its position as a global research leader, we must invest properly in the people who make that reputation possible. This honest and practical reform would help Australia retain its brightest researchers, maintain global competitiveness, and deliver the health advances we all depend on. The solution exists. What is needed now is the self-worth to request it and the political will to implement it. The time for change is now. Our collective health and wellbeing depend on it.
Professor Jane Speight PhD is the Foundation Director of the Australian Centre for Behavioural Research in Diabetes (ACBRD), a partnership for better health between Diabetes Victoria and Deakin University.
Dr Elizabeth Holmes-Truscott PhD is Deputy Director and Prof Timothy C Skinner PhD is a professor at the same.
The authors have no competing interests to declare.
The statements or opinions expressed in this article reflect the views of the authors and do not necessarily represent the official policy of the AMA, the MJA or InSight+ unless so stated.
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