CSIRO and Data61 – the rebrand of NICTA – have wrestled back some of the research funding they lost under the Abbott Government, but observers remain concerned that much of the damage is irreversible.

After losing $115 million in federal funding – and subsequently hundreds of staff – as a result of the 2014 budget, CSIRO has been offered $90 million back under the Government’s new innovation statement.

Of that $90 million, $70 million will go into a new early stage innovation fund that CSIRO will manage “to support co-investment in new spin-out/start0up companies based on research-based products and services created by Australian research institutions”.

The fund is expected to be worth $200 million in total, with other monies coming from the private sector and from “new revenue” from CSIRO’s wireless LAN patents.

“We will create a $200m Innovation Fund aimed at bringing some of the best science and research outcomes to market,” CSIRO’s CEO Larry Marshall said.

Marshall said the fund would act as “a bridge to de-risk science and meet industry 'half way' with a 'beta', an investable proposition that industry can more comfortably take to market.”

"When the customer isn't buying the product the entrepreneur doesn't waste time blaming the customer - they change the offer," he said.

"Having a fund focused and administered close to the sources of invention and research is ideal for generating the innovation Australia needs.

"The fund will bring intense focus to high growth potential opportunities and at the pace that markets demand."

The other $20 million – amounting to $5 million a year – is to expand CSIRO’s accelerator program “to include other publicly-funded research organisations to more rapidly prepare their research for commercial adoption”.

“This will be a bridge between CSIRO and the participating universities, and an opportunity to build deep collaboration between researchers, entrepreneurs, investors, start-ups and established companies,” Marshall said.

Both initiatives are expected to be funded in 2016.

Meanwhile, NICTA – whose disastrous loss of $42 million in funding a year saw it merge with CSIRO to survive and rebrand as Data61 – has been handed an economic lifeline.

The Australian Financial Review first reported this was on the cards last month, and the new innovation statement confirms Data61 can expect $75 million over four years – or about half of what it previously received.

The paper reported that the new structure within CSIRO enabled the former NICTA to shed administration costs, meaning it could now survive on much less.

Marshall called the effective re-funding of NICTA “a powerful message from our Government to reward taking risk to innovate.”

“Data61 has a mission of unleashing the potential in Australian industry, specifically focusing on cybersecurity, data analytics, a data research network to link business with data researchers, and improving the data literacy of Australian business,” he said.

“CSIRO took on substantial commitment in supporting NICTA, but we must dare to be different to innovate.”

The Community and Public Sector Union (CPSU) and the CSIRO Staff Association welcomed news of the refunding as a “first step” to repairing damage to both organisations and the science community.

But CPSU national secretary Nadine Flood noted some of that damage would take much longer to undo – if it could be undone at all.

“Unfortunately much of the damage that’s been caused by thoughtless budget cuts, including so-called efficiency dividends, can only be partially repaired through these measures,” Flood said.

“Once scientists are cut - as one if five has been from the CSIRO over the past two years - that loss of knowledge and expertise can never be fully recovered.

“We’re encouraged by Prime Minister Turnbull’s rhetoric that he wants the Government to lead by example by becoming more innovative in delivering services, but he’s ignored the reality that the private sector has invested sensibly in digital transformation while the Government has been haphazardly slashing public sector jobs and capability in a way that makes it significantly harder to turn his vision into reality.”

Others noted that it “made sense” for CSIRO and Data61 to be re-funded.

“Great research that pushes the boundaries of knowledge is needed to produce breakthrough innovation,” StartupAUS board member and Professor and Director for the Centre for Business Growth Dr Jana Matthews said.

“In Australia, CSIRO and the universities are the two groups that undertake research so it makes sense for the government to fund more, with the expectation that doing so will produce many more breakthrough ideas.”