Despite constant rhetoric about innovation, Australia is steadily dismantling its scientific capacity. Public schools, universities and the CSIRO are all under pressure – the result of decades of market-driven policy-making that prioritises short-term cost-cutting over long-term national capability.

Australia’s latest cuts to the CSIRO were announced with the usual language of “efficiency,” “streamlining,” and “budget discipline.” No one in the scientific community believed it. Not because the explanations were implausible, but because they form part of a long, consistent pattern: a country that talks about innovation while slowly dismantling the very institutions capable of delivering it.

To understand why this matters, examine the deeper historical currents that brought us here. Australia’s decline in scientific capacity is not the result of one government or one decision. It is the product of a structural economic philosophy, rational economics that has guided policy-making since the mid-1960s and became entrenched in the Dawkins reforms of the late 1980s.

This philosophy insists that knowledge institutions should be “efficient,” “market responsive,” and “self-funding.” In practice, this has meant steady disinvestment from public goods and an outsourcing of strategic planning to consulting firms whose incentives are profoundly misaligned with national development.

What we face today is the cumulative result: a weakened public school system, financially stressed universities, and a CSIRO repeatedly stripped of long-term capability.

The tragedy is not simply the loss of money. It is the loss of depth, continuity, and trust, conditions that science requires but markets cannot provide.

The national innovation pipeline begins not in universities or research labs but in childhood. Australia once had a strong commitment to public education as the foundation of collective prosperity. Yet since the early 2000s, the funding imbalance between public and private schools has deepened, leaving the schools that educate most disadvantaged students struggling to meet basic needs.

A society that underfunds public schools underfunds its future scientists long before they enter a laboratory.

The question is not whether private schools should exist, but whether public policy has lost sight of its purpose. Science literacy, curiosity, and the capacity to engage in higher-order thinking all decline when the foundational system is uneven, stressed, and short of resources.

The Dawkins reforms expanded participation but introduced market logic into every corner of higher education. Universities were told to behave like corporations: compete for students, broaden revenue streams, partner with industry, and pursue “efficiencies.”

It is worth asking what those efficiencies have cost.

Since the 1990s, government funding per Australian student has declined in real terms. To survive, universities became financially dependent on international students. This model collapsed during COVID, and the sector has not recovered.

Even before the pandemic, early-career researchers faced a world of short-term contracts, hyper-competition, and limited funding for fundamental research. The result has been predictable: a gradual exodus of Australian talent and increasing difficulty attracting international scholars.

The CSIRO once symbolised Australia’s confidence in the future. It produced world-changing innovations – Wi-Fi, polymer banknotes, advanced agriculture, medical breakthroughs, and environmental systems that quietly underpin national planning.

But for more than 20 years, successive governments have applied the same cuts-and-restructure cycle. Each round removes a little more capability, a few more teams, a few more decades of hard-won expertise. Managers reassure the public that priorities are being “refocused,” but those inside the organisation understand what is really happening: a shrinking of ambition.

Long-term research cannot survive repeated short-term disruptions. It takes years to assemble a research group, build collective expertise, and secure international partnerships. Cuts undo in months what took decades to build.

At the heart of this erosion lies a belief system: that markets are more efficient than public institutions, that public goods should be costed like commercial products, and that governments should focus on short-term fiscal outcomes rather than long-term national capability.

This philosophy produces policies that cut research because it doesn’t yield immediate revenue, pushes universities to operate like businesses instead of intellectual communities, shifts funding toward “measurable outputs” and away from curiosity-driven discovery, and replaces strategic planning with consultancy reports.

But the key failure of rational economics is its inability to recognise value that cannot be easily priced. Innovation ecosystems require long-term investment in people, infrastructure, and ideas whose benefits may not be seen for decades. Markets cannot do this. Governments once could, and must again.

While Australia contracts, other nations expand.

Canada has just launched major new research investments to attract global talent, explicitly positioning itself as a destination for scientists discouraged by political interference in the United States or austerity in the United Kingdom.

China has pursued a consistent strategy of massive long-term investment in research capability, not because it is “efficient,” but because it is essential to national strength.

Even the United States, for all its volatility, still funds science at a scale that dwarfs Australia’s total research budget.

The global competition for talent is real and Australia is not competing.

Science cannot be rebuilt quickly. When researchers leave, they rarely return. When departments close, they do not reopen. When international partnerships dissolve, they move to countries with more stable funding.

Australia risks becoming a nation that imports ideas rather than generates them, a buyer, not a creator; a follower, not a leader.

There is still time to change course, but not much.

If Australia wants a future defined by innovation rather than stagnation, it must abandon the false economy of cuts and rediscover the long-term thinking that once shaped the Snowy Hydro Scheme, the CSIRO itself, and the expansion of universities in the post-war era.

This requires restoring stable funding to public schools; rebuilding universities as public institutions rather than revenue-driven corporations; reinvesting in curiosity-driven science; ending the over-reliance on consultants for public policy; and recommitting to nation-building as a bipartisan responsibility.

A country that continually weakens its knowledge institutions cannot prosper. A nation that invests in them cannot fail.

Australia stands at that crossroads.