Estimates Debate — Vote Crown Research Institutes

Thank you, Mr Chairperson, for the opportunity to speak on these Budget estimates for 2006-07 regarding the Crown research institutes, which are also very much a part of the science portfolio. It is hugely relevant that through the Speech from the Throne last year the Prime Minister, one Helen Clark, made the comment: “My Government believes that science and innovation are critical to driving our prosperity.” Well, as well as that statement a paper has come from the Ministry of Science, Research and Technology, detailing a range of actions known as Picking up the Pace. The reality is more like the Labour Government picking up the spin. I see that Minister Maharey has just taken his seat, and if ever there is anyone capable of picking up the spin rather than the pace, it is none other than Minister Maharey.

We have seen in the estimates this year, certainly in relation to science, a sum of $19.397 million for 2006-07. That can be taken in the context of this Labour Government’s general spending. When one looks at what was spent on Working for Families—which is in the order of a billion dollars a year or more, and which will only cement-in dependency—and at what was spent on interest-free student loans, which again cost about a billion dollars a year, then one sees that $19.397 million seems to be extraordinarily meagre, especially if we look at this Government’s rhetoric about science. It says, firstly, that it will pick up the pace and, secondly, that science and innovation are critical to driving our prosperity. I wonder whether the Minister will actually stand up and tell us what that really means, if this Government is serious about science and innovation being critical to driving our prosperity. It seems to me that there is nothing serious about that at all, and that the Labour Government’s priorities are in terms of cementing-in welfare dependency, when it commits literally billions of dollars of taxpayers’ funds into programmes like Working for Families and interest-free student loans, yet puts only a mere $19.397 million into an area that it says is critical to driving our prosperity.

The other interesting thing about this Labour Government is that it says it has considerably increased the spending on research and development over the last 6 years. But we know as a fact that as a percentage of GDP, spending on science has stayed much the same over the last 6 years or has even diminished a little, remaining at about 0.54 percent of GDP. The Minister has the temerity to say the Labour Government is going to aim for expenditure of 0.68 percent of GDP, but he does not tell us when that will occur. Just as the Labour Government said 6 long years ago that its aim was to raise New Zealand into the upper half of the OECD, it is saying in exactly the same way that in science research and development it is going to aim for 0.68 percent GDP of spending without telling us when that will occur.

There is no question that this Labour Government and the Minister of Research, Science and Technology, Mr Maharey, the “Minister of Spin” is, in his actions, doing exactly the opposite of his rhetoric. In fact, at the select committee it was very interesting to hear the Minister say that all the Crown research institutes are operating well at the present time. One only has to look at their financial performance over the last 5 years to see that they are not doing so.

It was interesting listening to the spokesperson for the National Party on research, science, and technology. One of the things that marks this particular area of work in the House—the constituency, obviously, is scientists, the people who are directly involved in a whole range of activities that run off the back of science, and it is a very interesting area of work to be involved in—one of the hallmarks of it during the time I have been in the House, is that members have engaged with each other in debate, which is rare. We will have Vote Education soon, and I am sure the debate will descend into the usual areas, but, in the area of science, I have noticed over the last 15 or 16 years that I have been around here that the debate has tended to be at a fairly high level. People have put up policies and debated what is going on.

I think Simon Upton and Pete Hodgson had a great relationship around this portfolio, and I am certainly looking forward to having that kind of relationship with Dr Hutchison, who I think brings real capacity to the portfolio. I look forward to having that kind of debate. Dr Hutchison will have to forgive me if I do not descend into the same things that he did, and just get into the actual debate. [Interruption] Now let us get into the debate, and I am interested in hearing from the member at a later time. I have looked at the National Party website and there is not any National policy at the present time. I am very keen to see the member put up some ideas in the future, so that they can be debated, as well. I am sure the sector would like that, because that has, as I say, been the nature of the debate over the last little while.

But let us look at the vote for this year. The member is right. Since this Government has been in place over the last 6 years—

💬 Hon Bill English: Why do you always agree with us?

I never agree with Mr English. For listeners at home, Mr English is calling out from the front seat because he is so keen to agree with the Government, and I always think that is quite a nice mark of him.

The portfolio of research, science, and technology has enjoyed about a 65 percent increase in funding since we have been here in power. That is because we understand, as Dr Hutchison has been pointing out, that this area of work is the key driver for a lot of the innovation that will take place in the economy. Therefore, what we have been seeking to do is to lift the level of funding. One of the ironies of the whole last little while, of course, is that although we have been lifting the level of funding by about 65 percent, the economy has been growing so fast that we are still trying to get to the OECD level. It is worth remembering that although the Government has set a clear target of 0.68 percent as part of our investment—we will see how we go over the next little while in terms of growth of the economy and so on, but that is where we want to be—if members look at the way we invest in science in this country, they will see that there are things we need to consider besides taxpayer funding.

For example, we are not very good at getting the private sector to invest in research and development. We still have a real problem with that. That comes down to, I think, in some cases a cultural issue. New Zealand businesses on the whole do not necessarily see themselves as investing, because they are domestically focused. A whole range of businesses make a product and sell it in the New Zealand market, which is pretty settled, and they do not see the value of trying to innovate all the time, because they are not competing on an international stage. Fonterra, of course, is absolutely committed to research and development. That company spends a lot of money, and wants us to spend more and work in partnership with it. But if somebody is producing, say, clothing or uniforms for a local market, that person is not spending time on new fabrics and so on as it just does not seem to be worthwhile. We have to change that culture. We have to get people used to the notion that even if they are in a domestic market, they have to be lifting their research and development commitment.

Secondly, of course, many firms are very small. We have a huge number of very small firms. People running a 5-person business are busy every day. They are trying to make sure the whole business works. When someone comes along and says “How about innovating your product?”, they often literally do not have time, and they do not have enough of a profit margin in their business, to do that. We have to think of some ways over the next little while to get businesses perhaps working together in clusters so that they have the time and energy—something we have done with apprenticeships, to try to punch up the numbers of apprenticeships across the country. If we can get people working in a group way, perhaps we can get the small New Zealand businesses to work in a way that coordinates their efforts, and they can invest in research and development.

But that is the other part of the equation. Later this year—part of what we have funded this year—there is to be a commercialisation summit, for example. We are working with Business New Zealand. It is going to bring in business and we are going to bring in scientists, over a period of a couple of days, and there are things we will do leading up to and out of that conference. We have to look at how to get a better relationship between business and scientists, so that we can begin to more rapidly commercialise business.

It comes down to, once again, some practical things about New Zealand. We are not used to commercialising. We are used to producing science. Even though the reforms back in the 1990s talked about the whole notion of how we would do science, we find that we still have, 16 years later, a culture that does not allow for the easy movement of an idea through to commercialisation. We have to get more used to the way that the US does it and the Singaporeans do it, and to move those ideas through, and the Government is very committed to doing that. That is why members will see in the expenditure this year that we have more work going into pastoral research. That is the effort we are putting in to try to get started, working with Fonterra, the dairy industry, and the grass-based industries, because they need to lift their innovation. That is why we are getting into energy research. That is why we are spending more money on Crown research institute capability. We want those institutes to lift their capacity, so that they are able to produce more science and to commercialise that science more rapidly. So we are working with them as well.

It is why we are doing things such as promoting science in schools. We want to provide a lot more effort to engage young people in science, and we want to put more materials into the hands of teachers, because we want to encourage young people not necessarily to be scientists but certainly to be science literate, so that, whatever they might move on to do, they take a science background with them and can apply it.

One will see a very common theme all the way through this funding. The theme is, very simply put—that we see science as the driver of innovation. What we need to do is to produce more knowledge in this country. We are a very small producer of new knowledge and we always will be, but we do want to produce our own knowledge, particularly in the areas that matter to this country. Then we want to get it on a conveyor belt that moves it towards its application. It will not always be of monetary value. It may be that we move to an understanding of living in a diverse society and what kinds of things we need to do to live in that kind of diverse society. But we want to move it through to application. Of course, we want to take ideas from overseas, as we have traditionally done, and apply those in this country in a way that is good for what we do here. So there is a very common theme here.

I think we as a Parliament should be trying to work together on how we can approach making sure that this innovation system of ours, driven by science, becomes a characteristic of living in New Zealand. That will be our future this century; producing knowledge and applying knowledge have to become the Kiwi way of doing things. That was not our way of doing things in the last century. In fact, a lot of what we did was about avoiding having to produce knowledge and apply it. We did not do that kind of thing enough.

💬 Hon Bill English: Rubbish!

Mr English says that is rubbish. It is good that he agrees it is important, because that is what we need to do in the future—to make that the characteristic of the way we work. That is what this Budget is about. That is why I think there has been agreement with it across the sector. People can see where we are going. We are doing the right things, and I am looking forward to seeing a little bit of policy from the National Party, so that we can engage in a little bit of debate in the future.