I refrained from posting previously as I was willing to give you the benefit of the doubt that you knew what you were talking about, but this post shows a less than average understanding of the topic at hand, so I hope I may be able to add some value to the discussion:
Australia (along with, among others, the US, UK, France and Germany) is a major international hub of medical research with world leading institutions that attract top practitioners and researchers from around the globe. My wife is an intensivist (intensive care specialist) who has worked all around the world, and she can tell you that our medical research institutions routinely rank among the top in the world. Medical research is not a singular global 'cause' so much as a varied range of research streams (of which Australia is a world leader in at least two dozen of them), and international public research, while competitive, involves broad cooperative discourse rather than blind duplication of effort (ie. researchers from around the world are not competing to come up with the same cure, they are building on each others' work). To suggest that we may as well not do it because others will is an argument for all countries to stop medical research altogether and just rely on someone else.
$400 million in cuts will not simply 'slightly lessen the number of people researching', it will fundamentally change the funding mix of medical research in this country, forcing most researchers to either drop out altogether or compete for private sources of funding, and [sarcasm alert] we all know that Big Pharma ie. pharmaceutical megacorporations have our best interests at heart. Medical research, like education, is a public good, and public funding ensures that effort is directed where it is most needed, not where profits are greatest. It is well-documented that that the overwhelming proportion of pharmaceutical megacorporation research funding goes into profitable first-world 'medication' such as diet pills and impotency drugs like Viagra instead of into AIDS or cancer research.
I also don't understand how one can blithely assume that medical research in this country has been 'unsuccessful'; Australia has pioneered cutting-edge therapies and treatments in many fields of medicine and is currently at the forefront of efforts in a number of fields, including alzheimers, cardiology, neglected tropical diseases, neuroscience etc. It is also one of the most efficient industries around, where every grant dollar is highly contested and meticulously accounted for. I've been heavily involved in the Australian Research Council grants process in the past, and the medical field puts most others to shame in their level of professionalism.
As previously suggested by another poster, this is nothing more than a Julia suburban poll-tester -- there is evidence of declining support for science funding from conservative Australians, which parallels a similar trend in conservative US politics (hello Sarah Palin), and Julia has shown that she is nothing if not willing to court the reactionary vote.
By your own standards of epistemological methodology ie. 'weighing in all of the experiences and knowledge that usually go into making such an assessment', do you truly think that you possess the necessary 'experience and knowledge' to make a call on the effectiveness or otherwise of $400 million of research funding? I would suggest not, and a quick and simple Google search survey of medical research in Australia may open your eyes and change your mind.