The Medical Research Future Fund (MRFF) was established on 26 August 2015 by the Medical Research Future Fund Act 2015 (MRFF Act). It provides an ongoing funding stream for medical research and medical innovation into the future with the credits to the MRFF preserved in perpetuity. The capital of the MRFF is invested, with the earnings used to make grants of financial assistance for medical research and medical innovation over the long-term.
For information on the Australian Medical Research and Innovation Strategy 2021-2026 and the accompanying Australian Medical Research and Innovation Priorities 2022-2024, and disbursements from the MRFF, refer to the Department of Health and Age Care website.
Legislation
The MRFF Act gives effect to the following:
- Establishment of Government bodies: Australian Medical Research Advisory Board (Advisory Board);
- the Advisory Board is tasked with determining the Australian Medical Research and Innovation Strategy and related Priorities to inform Government decision making on MRFF disbursements.
- Investment Mandate: the responsible Ministers are required to issue an Investment Mandate (detailed below).
- Crediting amounts to the MRFF: the responsible Ministers can make credits to the MRFF. For information on the credits, refer to the Transfers (Credits) to Medical Research Future Fund table below.
- Maximum Annual Distribution Amount (MADA): The Future Fund Board of Guardians (Future Fund Board) determines a MADA for the MRFF each financial year (detailed below).
- Debiting amounts from the MRFF: the Finance Minister, on request from the Minister for Health, will authorise disbursements (debits) from the MRFF, subject to the MADA. The Treasurer is responsible for payments to States and Territories.
Investment Mandate
The responsible Ministers issued the Medical Research Future Fund Investment Mandate Direction 2015 to the Future Fund Board on 8 November 2015. It requires the Future Fund Board to adopt a benchmark return of the “average return of at least the Reserve Bank of Australia Cash Rate target + 1.5 per cent to 2.0 per cent per annum, net of investment fees, over a rolling 10-year term”.
In targeting this benchmark return, the Future Fund Board must determine an acceptable but not excessive level of risk for the MRFF measured in terms such as the probability of losses in a particular year. In determining the level of risk, the Future Fund Board must take into account; the principle that the nominal value of the credits to the MRFF be preserved over the long- term; and the need to moderate the volatility of the maximum annual distribution.
Maximum Annual Distribution Amount
The Maximum Annual Distribution Amount (MADA) is an independent determination that is made each year by the Future Fund Board. The determination specifies the amount that can be drawn from the MRFF each financial year for medical research and medical innovation grants. In issuing each MADA determination, the Future Fund Board is required under the MRFF Act to take into account the principles that the value of credits to the MRFF be preserved over the long term and the volatility in MADAs from one year to the next be moderated.
MADA Determinations
| Financial Year | Maximum available for grants from the MRFF ($m) | Documentation |
|---|---|---|
| 2023-24 | 870 | 23-24 MADA |
| 2024-25 | 973 | 24-25 MADA |
Investment Performance and Financials
The Future Fund Board publicly discloses the MRFF asset allocation and investment returns in its quarterly portfolio updates.
Financial performance since inception to 31 March 2024
| $ 'millions1 | |
|---|---|
| Total Credits | 20,000 |
| (Plus) Net Earnings2 | 5,660 |
| (Equals) Total Credits and Earnings | 25,660 |
| (Less) Debits (Withdrawals)3 | 2,646 |
| (Equals) Balance | 23,014 |
Notes:
1. Data may not sum due to rounding.
2. Earnings are net of investment and administration fees incurred by the Future Fund Board.
3. This amount represents debits made for policy purposes under the relevant Act.
Quarterly performance result to 31 March 2024
| Nominal Return | Benchmark Rate1 | |
|---|---|---|
| 1 Year | 8.4 | 5.7 |
| From inception2 | 4.5 | 3.0 |
Notes:
1. The quoted benchmark rate of return follows the relevant investment mandate direction.
2. Annualised return since inception on 22 September 2015, when the Fund received its initial credit.
Annual performance results
| Year | Nominal Returns (Per cent per annum) | Benchmark Rate1 (Per cent per annum) | Total Balance of Fund as at 30 June3 ($ 'millions) |
|---|---|---|---|
| 2015-162 | 2.1 | 2.5 | 3,206 |
| 2016-17 | 4.8 | 3.0 | 4,609 |
| 2017-18 | 4.7 | 3.0 | 7,166 |
| 2018-19 | 5.2 | 3.0 | 9,755 |
| 2019-20 | 0.2 | 2.1 | 17,222 |
| 2020-21 | 10.9 | 1.6 | 22,020 |
| 2021-22 | 0.1 | 1.6 | 21,584 |
| 2022-23 | 4.4 | 4.4 | 21,917 |
Notes:
1. The quoted benchmark rate of return follows the relevant investment mandate direction.
2. The Medical Research Future Fund investment commenced from 22 September 2015.
3. Closing balances are sourced from Finance’s annual financial statements.
Transfers (Credits) to Medical Research Future Fund
The following table provides a history of financial transfers to MRFF, with links to the associated documentation.
| Summary of Transfers | |||
|---|---|---|---|
| Date | Source of Funds | Amount ($AUD m) | Documentation |
| 28 August 2015 | Uncommitted balance of the Health and Hospitals Fund | 1,010 | Medical Research Future Fund (Amount to be Transferred from the Health and Hospitals Fund) Determination 2015 (Explanatory Statement ) |
| 26 November 2015 | Value of health saving measures announced in the 2014-15 Budget and residual amounts from the closure of the Health and Hospitals Fund | 2,139 | Medical Research Future Fund (Crediting of Amounts) Determination 2015 (No. 1) (Explanatory Statement ) |
| 26 August 2016 | Value of health saving measures announced in the 2014-15 Budget and residual amounts from the closure of the Health and Hospitals Fund | 1,277 | Medical Research Future Fund (Crediting of Amounts) Determination 2016 (No.1) (Explanatory Statement ) |
| 3 July 2017 | Value of realised health saving measures announced in the 2014-15 Budget | 2,242 | Medical Research Future Fund (Crediting of Amounts) Determination 2017 (Explanatory Statement ) |
| 10 July 2018 | Value of realised health saving measures announced in the 2014-15 Budget | 2,289 | Medical Research Future Fund (Crediting of Amounts) Determination 2018 (Explanatory Statement ) |
| 23 July 2019 | Value of realised health saving measures announced in the 2014-15 Budget | 7,831 | Medical Research Future Fund (Crediting of Amounts) Determination 2019 (Explanatory Statement ) |
| 21 July 2020 | Value of realised health saving measures announced in the 2014-15 Budget | 3,212 | Medical Research Future Fund (Crediting of Amounts) Determination 2020 (Explanatory Statement ) |
| Total Transfers | 20,000 | ||
Annual Disbursements (Debits) from the Medical Research Future Fund
| Financial Year | Debit ($m)1 |
|---|---|
| 2016-17 | 61 |
| 2017-18 | 0 |
| 2018-19 | 205 |
| 2019-20 | 393 |
| 2020-21 | 573 |
| 2021-22 | 455 |
| 2022-23 | 598 |
| 2023-24 | 362 |
Notes:
1. Totals may not add due to rounding
2. As of 31 March 2024.
