"Innovation is what drives improvements in living standards, no doubt about it." R&D investment has grown at less than half the rate of total budget expenditure over the past two decades. At an average annual rate of 2 per cent, real growth in science spending lags far behind transport (23.5 per cent), public safety (8.8 per cent) housing (6.6 per cent) and health (5.5 per cent). Total budget expenditure has increased 4.4 per cent in real terms since the mid-1990s. Budget figures also show science and innovation spending has fallen to its lowest share of GDP in 25 years. This year's expenditure of 0.56 per cent of GDP is the lowest since 1989-90, according to a Parliamentary Library analysis provided to the Greens.

The Australian Academy of Science president Andrew Holmes said there was substantial evidence that public investment in research increased productivity. A 2012 study found investment in basic research led to 30 times more economic growth than investment in physical capital such as infrastructure. Investment in applied research led to 10 times more growth. "We've been lucky so far, but with a mining boom that is slowing and an economy in transition, that luck could run out," Holmes said. "If we don't strategically invest in science and research, we'll be ill-prepared for future challenges whilst other nations are powering ahead of us reaping the rewards of increased scientific investment." While not all innovation needs to be local, too little investment in local R&D carries dangers, Dr Minifie warned.

"There are clearly huge spillovers to R&D among the community of advanced countries … [But] to be in a position to access those fruits, you need to be sufficiently sophisticated." Australia ranked 18th out of 20 advanced economies - ahead of only Greece and the Slovak Republic - for government R&D spending as a share of GDP in 2013. In 2012, Australia ranked 24th out of 28 countries, according to OECD data compiled by the Greens. The Academy, the chief scientist and The Greens have called for Australia to lift public and private R&D from 2.2 per cent of GDP to three per cent, in line with countries like the US. The chief scientist Ian Chubb said one of the major effects of government investment in research was that it encouraged businesses to take "creative risks" to develop and apply that new knowledge. This has flow-on effects for jobs and the economy.

"Without research funding from government, business will not take risks," he said. But Professor Chubb also said Australia desperately needed a national science strategy to highlight where future money would be best spent. "If the public really understood all the benefits that accrue to them on a daily, if not hourly, basis from research and development that was done somewhere in Australia, or was brought to Australia, then they would be ensuring that our politicians understood the importance of this for the future of the country." The Greens deputy leader Adam Bandt said public investment in R&D not only improved health and welfare through better vaccines and communications technology, but was increasingly a cornerstone of our economy. "Since 2009, our manufacturing sector has made more money each year exporting health and medical products than exporting cars."

Industry Minister Ian Macfarlane did not respond to questions about the government's cuts to science programs but he said it would soon release its "Competitiveness Agenda". "One of the key elements of this strategy will be to draw science further into industry policy and to create stronger links between business, research and science," he said.