Australia’s medical research community is facing a funding paradox. While the Medical Research Future Fund (MRFF) has grown to a record $23.85 billion, a legislative cap means hundreds of millions of dollars are sitting idle: money that could be driving discoveries, supporting researchers, and addressing some of our nation’s most urgent health challenges.
What is the MRFF?
The MRFF was established in the Abbott Government’s 2014–15 budget as a flagship initiative to strengthen health and medical research. Built from savings in health and Indigenous affairs, the fund’s target was to reach $20 billion at maturity (achieved in 2020), with the promise of distributing $1 billion annually to support research.
Funds are allocated in line with the MRFF’s strategic priorities, which are guided by an independent advisory board but ultimately decided by the Minister for Health and Aged Care. The current ten-year plan (to 2033–34) spans 22 initiatives under four broad themes: patients, researchers, research missions, and research translation.
The underspend problem
Despite investment returns exceeding targets every year, the distribution of MRFF funds has fallen well short. This is due to a 2021 legislative cap introduced by the Morrison Government and supported by Labour that limits expenditure to $650 million annually.
- Since 2015, MRFF investments have earned $6.435 billion, yet only $3.15 billion has been released for research.
- For the 2025–26 financial year, the Future Fund Board of Guardians set the maximum distribution amount at $1.055 billion.
- However, due to the cap, $403 million will go unspent, locked away in an already oversubscribed portfolio, instead of funding lifesaving research.
This means that while the MRFF continues to grow (forecast to reach nearly $27 billion by 2028–29), the real value of research funding is actually falling. In fact, current budget projections show a 12% decline in real MRFF funding by the end of the forward estimates.
A tough climate for research
This underspend comes at a time when:
- Australia’s R&D investment remains at just 0.53% of GDP—well below the OECD average.
- NHMRC funding has been stagnant for a decade at around $887 million annually.
- Grant success rates are at historic lows, leaving many outstanding projects unfunded.
- Research institutions are struggling to cover overheads for MRFF-funded projects, with Group of Eight universities alone shouldering an estimated $350 million in 2023, often subsidised by international student revenue.
A growing call for change
The cap is not only undermining the MRFF’s founding vision to transform health and medical research and improve lives; it is also eroding trust in the government’s commitment to R&D.
Leaders across the sector, including the Group of Eight universities, have consistently called for the cap’s removal. And just this week, Dr Monique Ryan MP raised the issue in Parliament, pressing for legislative reform so that the MRFF can distribute its full potential and support the researchers and innovations Australia urgently needs.
Dr Monique Ryan calls for an end to the MRFF funding cap
Why this matters
Australia has the talent and the ideas. What’s missing is the political will to invest properly in our future. Every dollar withheld from the MRFF is a missed opportunity to deliver better health outcomes, strengthen the economy, and secure our place as a global leader in medical research.
At NARF, we join the call to lift the MRFF cap and ensure the fund delivers on its promise. Researchers cannot afford to wait—and neither can the Australian people.