Clendon David: Advanced Technology Institute Bill — In Committee 
Text is incorporated into the Bound Volume 
Clendon David: Advanced Technology Institute Bill — In Committee 
[Sitting date: 28 November 2012. Volume:686;Page:6883. Text is incorporated into the Bound Volume.] 
DAVID CLENDON (Green) 
: 
 Kia ora. I am very pleased to take a call on this bill the Advanced Technology Institute Bill not least of all because the Minister of Science and Innovation has inquired as to why the Greens might see fit to oppose this legislation. I am very pleased to list some of the reasons why we are doing so recalling of course that we initially supported this piece of legislation at its first reading because we entirely agree with the underpinning logic of establishing some sort of high-order entity that can link business and the community of research to make that series of connections that will deliver us the high-value exports and the positive improvements. We know that our economy can no longer rely on selling more logs and milk powder over the wharf. That is the past; that is not the future. However the nature both the process and more important the final structure of the legislation is something that we simply cannot support. I will work through the bill and highlight some of the reasons for that. 
We have mentioned the process. The bill was tabled and had its first reading 2 or 3 days later. Within 6 weeks we had the report back from the Education and Science Committee and at no point have we been given clear information as to the need for that urgency. I would love to hear from the Minister why this had to be done in such extraordinary haste because it did reduce the quality of the submissions—and we know this because the submitters told us so. It reduced the number of submissions. It penalised the officials who did a very good job under very difficult conditions to come back in time with high-quality work which they are accustomed and committed to providing the committees with. All in all it was a very unsatisfactory process and not unusually it has delivered an unsatisfactory piece of legislation. 
The Advanced Technology Institute will be a Crown entity—a Crown agent. It will have very little autonomy and clearly that is carefully designed as such. We know that the Minister will appoint the board. They will be people selected by the Minister. Clearly this organisation will very much be at the beck and call of the Minister and that is not particularly helpful given that its prime cause is to build lasting relationships with business. We have all heard the line about the guy who walks into a business and says: “I’m from the Government. I’m here to help you.” An organisation that is clearly so closely managed and at the Minister’s beck and call is not one that is immediately going to win the hearts and minds of business people clearly. 
Equally there is the appointment of the chief executive of the ministry as a special adviser to the board. It is wonderful language. Clause 9(2) says that the task of the chief executive officer in that context will be “to assist the board to align its strategies and activities with government policy.” In a rough translation—call me cynical if you will—I see that as saying that this is the fellow or the person who will give the board its marching orders. It will be told very clearly what it ought to be doing at any given time what its approach should be and indeed where it ought to be directing its funding. That is a key issue I will come to later. 
 The name of this organisation is to be Callaghan Innovation. We did not oppose that clearly although we have considerable misgivings about it not least of all because this is exactly the sort of approach embedded in this bill that the late Sir Paul Callaghan actually warned us against. Sir Paul said that picking winners is not a strategy that has worked well for us in the past. The way this organisation is set up it is clearly intended to do that—to pick winners to fund them and to support them. Sir Paul said: “We will be good at what we’re good at.” He said that the next big thing in the future will take us by surprise in the same way that things like LanzaTech took us to some extent by surprise. He said that we need to target niche markets. The wonderful line that he came up with which we have all used and believe in is that we want to make New Zealand a place where talent wants to live. 
The way this organisation is set up is contrary to the advice that was left to us by Sir Paul. In clause 12 of the bill the main objective talks about support and innovation for commercialisation linking the extraordinary science and research talent we have here with the innovative capability and capacity of business to turn good ideas into earners for the country. We certainly need and want those and there is a considerable proposition there. What this bill rather overlooks though is that neither sector neither the business nor the research sector has been sitting idly on its hands waiting for something or somebody to come along to create a bridge between the two. 
There are a whole host of very very successful enterprises organisations such as UniServices WaikatoLink Lincoln Ventures and the various economic development agencies around the country that have invested considerably and they have developed very successful and positive relationships with business and with development bodies. It is rather interesting to ask the question of what will become of these relationships. It is a very obvious question to ask. How will the Advanced Technology Institute interact with these existing sets of relationships and organisations. The Education and Science Committee quite sensibly and obviously asked the question. The answer we got back is and I quote from the Ministry of Business Innovation and Employment: “No decision has been made about how ATI will interact though it is recognised this is an important aspect of how ATI carries out its function.” 
This is one of the themes that run through this legislation. We have been asked to sign off on something and to support a bill not knowing a great deal of the content of how this organisation will work. There is a great deal we simply do not know. There are simply too many unanswered key questions for us to offer support to this legislation. In a little bit more time maybe we would have been persuaded. Maybe the work could have been done. We understand there will be a report back to Cabinet at the end of this month by which time in all likelihood this bill will be done and dusted—rather too late really for us to be informed when we are making decisions which after all is our task in this House. 
Clause 13(1)(c) allows for a degree of reciprocity between business and the research sector—the tertiary and other research organisations. That is a change we effected in the select committee and I think it is a good one. The original drafting anticipated a one-way flow from the research sector into business and clearly that is not how the world works and it is not how we want it to work. So that clause does allow for a degree of reciprocity and acknowledges that the work the research the ideas and the innovation can cut across a two-way path. That is a useful improvement we did manage to make to the bill. 
I guess the major clause that is the deal-breaker for the Greens is 13(1)(f) which simply says that the Advanced Technology Institute will “allocate and administer RS&T funding:”—full stop. Again the very obvious question that was asked by the select committee was: what funding? Which of the various funding streams will be handed over to the Advanced Technology Institute to administer and to allocate? Will there be new money? Frankly we think in the present financial environment that is unlikely and legitimately so you might say. Again the answer to the select committee from the Ministry of Business Innovation and Employment was I quote: “No decisions have been made regarding which funding the ATI will administer because MBIE is currently reviewing the schemes. A Cabinet report back is due by 30 November this year.” 
Once again we have been asked to take this on trust and this is one of the issues that are of major concern to the various research organisations the Crown research institutes and the universities. We know this because we have talked to them personally and individually. They are seriously worried about what this means for their future frankly—for their ability to continue with existing research work to pick up new contracts and to go into the future. Why has this not been made more clear before the legislation is passed? It seems an extraordinarily wide and open-ended provision and the concern is clearly that most if not all of the contestable funding will be channelled through this new Advanced Technology Institute—through Callaghan Innovation—and that will be a completely undesirable sort of set-up. It is not again reflecting on Sir Paul’s caution that backing winners has not worked for us. 
We need a considerably more diverse range of funding streams and decision-making points than a single entity handing out most or all of the contestable funding would allow for us. It is something that came through in a fairly subdued way I have to confess in the submissions but certainly individual academics researchers and scientists have been rather more pointed one-to-one in the information they have given to us informally. Clearly they realise that they do not want to rock the boat. They understand that the relationship they have with the Minister is an important one and there is a degree of concern that making too much noise about this bill might have undesirable consequences into the future. Again it is very unfortunate that that lack of trust is coming through to us from very well-respected and successful academics and scientists.