Callaghan Innovation Bill — Third Reading 
Text is incorporated into the Bound Volume 
Callaghan Innovation Bill — Third Reading 
[Sitting date: 04 December 2012. Volume:686;Page:7009. Text is incorporated into the Bound Volume.] 
Callaghan Innovation Bill 
Third Reading 
Hon STEVEN JOYCE (Minister of Science and Innovation) 
: 
 I move  
That the Callaghan Innovation Bill be now read a third time 
. This is a special day in a special year for New Zealand’s science and innovation community. This bill is the latest evidence of this Government’s absolute commitment to the growth and development of New Zealand’s science and innovation system alongside initiatives like the National Science Challenges increased investment in basic research increased investment in engineers and scientists—in fact 50-odd changes as part of our Building Innovation stream of the Business Growth Agenda. 
An important part of the Government’s Business Growth Agenda is ensuring that there are better linkages between business science engineering and design so that great ideas are commercialised and generate income and jobs for New Zealanders. This bill provides the legislative framework for establishing Callaghan Innovation as a high-tech HQ for New Zealand businesses. Callaghan Innovation will be a one-stop shop offering high-tech New Zealand companies the business innovation support they need whether it be in science engineering design or technology in order to become successful internationally. The organisation carries the name of the late Sir Paul Callaghan in recognition of his belief that science was not only about great ideas but also about getting value from those ideas through innovation and commercialisation. 
Alongside the passage of this bill through the House the Government is currently finalising the detailed design of Callaghan Innovation to have it under way by 1 February next year. Cabinet will shortly consider its accountability and performance framework what business innovation support functions will be transferred from the Ministry of Business Innovation and Employment and how Callaghan Innovation will align with New Zealand Trade and Enterprise to ensure there is no wrong door for businesses accessing these sorts of Government services. 
New Zealanders are great at coming up with smart ideas but we do need to be better at turning those ideas into commercially successful high-tech products that we can then sell to the world. We need science engineering and design expertise joined at the hip on product development. We must encourage an entrepreneurial spark amongst our science and research community. New Zealand is blessed with outstanding entrepreneurs and outstanding scientists but we are not yet as successful as we need to be when it comes to converting ideas and intellectual property into business success. The challenge in this case is to fire up more of our young scientists so that they see starting their own business joining a start-up team or joining an established innovation business as a viable alternative—or indeed addition—to an academic career. 
In many ways the pathway has been established with some of our top businesses coming from entrepreneurs who have over many years applied innovative thinking to home-grown science and engineering. The challenge for Callaghan Innovation will be to accelerate that activity to help more firms reach that level of success by connecting them with the know-how and the facilities that they need. 
Based in Auckland Wellington—including the Hutt Valley—and Christchurch Callaghan Innovation will be strongly business focused and responsive to commercial needs. Its initial focus will be on industries with high growth potential such as food and beverage manufacturing agricultural technologies digital technologies health technologies therapeutics and high-value wood products. Callaghan Innovation will offer value-adding services such as product testing and analysis access to specialised expertise and facilities national measurement and standards work commercialisation advice and of course its own research. 
Collaboration will be the key. As well as offering its own services Callaghan Innovation must improve connectivity between businesses and the significant but highly distributed capability that exists across New Zealand’s many public and private research organisations and within businesses themselves. It will build partnerships to maximise commercialisation opportunities and develop global connections through which New Zealand companies can access international expertise and keep abreast of technology trends and market opportunities. 
It will also manage the Government’s business research and development co-funding streams. However it will not be responsible for allocating contestable science funding. That will continue to be administered by the Ministry of Business Innovation and Employment. Much of the foundation of Callaghan Innovation will come from the assets and staff of Industrial Research Ltd which will become a subsidiary company of the new organisation. 
The Government sees greater business innovation as a key to growing the economy. There is a big gap in private sector investment in research and development in New Zealand. Although there are many reasons for that research shows that if we can increase business research and development expenditure that will help drive economic growth. So the Government has set a goal of raising the amount that firms spend on research and development from the current 0.54 percent of GDP to at least 1 percent of GDP and we see Callaghan Innovation playing a critical role in helping to leverage that greater investment. The success of Callaghan Innovation will be measured by how many companies it helps to become research and development capable how many spend more on research and development and most of all how many it helps to innovate to become more competitive and lift New Zealand’s exports. 
I firmly believe that Callaghan Innovation will be a great step forward in New Zealand’s plan to achieve faster growth through the application of our innovation and of our Kiwi ingenuity. I commend this bill to the House for adoption. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 As the Minister of Science and Innovation said this should have been an important day for New Zealand science and for our growth agenda and for the place of science and innovation in New Zealand’s economic future. Instead what we have is an overwhelming sense of underwhelming. People see this as an opportunity lost and an opportunity squandered by this Government. A significant amount of money is being invested into establishing the Callaghan institute and we on this side of the House fear that it will fail to deliver. We are voting for this legislation the Callaghan Innovation Bill because we want to see it succeed but throughout the passage of this bill through the House and through the Education and Science Committee we have pointed to a number of flaws that we see in this model. We still urge the establishment committee which has been given an incredibly wide remit under an incredibly permissive piece of legislation to take into account some of these concerns. 
This is a National Government opposite that has since the lead-up to the 2008 election promised big on science and innovation but like in so many areas it is full of big talk and grand ideas but broken promises. Over and over we hear this that this is a Government that is committed to science and innovation and research and development. Let us have a look at its election 2008 promise where it promised to put a third of the funding that it was going to crib back by cutting the research and development tax credit into other areas of science and innovation funding. This would have amounted to around $315 million over 3 years. Well $100 million over 4 years was found but this was largely from underspends in previous years. This was money carried forward. This is a whole lot of creative accounting from the Government opposite and not only creative accounting but also the reversal of commitments. What we have seen is that this is a Government that is not committed to science and innovation. It is a Government that has slashed postdoctoral funding in this country. If anyone on the other side of the House thinks we can have an economy that is based on science and innovation without adequately funding the critical phase of postdoctoral research they are kidding themselves. 
The Callaghan institute and our future in advanced manufacturing lie in the fact that we will have the scientists and the engineers with the necessary experience to staff this institute and the Government is just not committed to that. Even worse than slashing the postdoctoral funding—and it does not get much worse than that if you want an economy based on this—the Government is going to stop that. It is going to solve that problem. People will not get to be postdocs in this country because this is a Government that will not give the student allowance for people to do doctoral research any more. It is not something that it sees as important. We can talk big about the role of science and innovation big ideas clever ideas and smart New Zealanders and what they can contribute to this country but members opposite will not even back New Zealanders to go on and do Master’s or PhD research. I would be very interested to hear how they think we can have an economy that is based on science and innovation within this climate. 
 What we have seen is that this is a Government trying to make a big deal out of a whole lot of new funding with this. It is trying to catch up and it is saying that there is $166 million going into this. The reality is that only a small fraction of this is new funding. It is about shifting the deckchairs and there has been a lot of shifting of the deckchairs in this portfolio. If we have a look at the ever-changing movement of the department that administers science and innovation in this country and we look at the cost of just one of the re-brands for the Ministry of Science and Innovation $420000 was spent on coming up with the new name and the new logo. It was all meant to be about the importance that we place on science and innovation—$420k was spent for an 18-month iteration. Is this good use of science and innovation funding? No. 
But as we have said throughout the passage of this legislation we have three main concerns with the current legislation and things that we urge to be addressed. We heard the Minister talking about the need for there to be collaboration. It is our fear that this is an organisation being set up that makes collaboration inherently difficult fraught and full of tensions and central to this is our concern over the funder/provider division. The other concern we have is that in order for this to work the right people need to be having input and giving this organisation direction. And what we have not seen from Government members is a commitment to setting up the structures that mean the right people can have input into this. 
But I think one of the most concerning things for me is that after all this time all this public relations spend and the newsletters that are going out that are meant to be informing people of what is going on we have our scientific community begging the ministry and the Government to please tell them what is going on. People within the scientific community simply have no idea what the Callaghan institute is going to be and actually members opposite will be very light on detail as well. As I said this is incredibly permissive legislation. It is going to be set up by 1 February but the detail—the incredibly important detail that will dictate whether or not this organisation succeeds or fails—has yet to be fleshed out and when we have the very scientists who are meant to be working with and in this organisation saying “Please tell us what it is” I have real concerns. We are into December. This is going to be up and running by 1 February 2013 we are told. But we are being told lots of dates for the establishment of the Callaghan institute so we will watch with interest for that 1 February date. 
We see that this is a bill that once again reflects National’s lacklustre and half-baked approach to science and innovation policy. It does not see the interconnections throughout the other parts of the Government and it certainly does not reflect a Government that is committed to taking hold of our economy being hands-on and being the force that will drive economic growth in this country. As I have talked about in order to achieve benefit to New Zealand the Callaghan institute needs to have robust and meaningful input from industry. It was a concern to committee members that really there was very little industry input into the select committee deliberation. We had one submission from the New Zealand Manufacturers and Exporters Association which was the most meaningful industry input we had and this was a submission that was negative about the ability of the structure being proposed in this legislation to deliver. It expressed extreme doubts and in fact most of the submissions supporting the organisation pointed to concerns they had and asked for changes to be made—changes that Government members have not been willing to make to the set-up of this organisation. 
The institute must be set up so that it clearly marks out the area it works in. We are not seeing that. What we are seeing is an organisation being set up that others within the scientific network in New Zealand are fearful of. They have no idea where it sits within the landscape. They have no idea what its purview is and they do not know the area in which it will be operating. We have asked for this to be cleared up throughout this legislation but we have not seen it. We heard the Minister talk about collaboration being crucial but the Minister was talking about collaboration between businesses when you listened carefully to his speech. I guess what we on this side of the House realise is that if the Callaghan institute is to succeed it needs to be able to collaborate not only with businesses—something we are committed to seeing happen—but also with the people who drive innovation in this country the scientists and the engineers and this is an organisation that is structurally not set up to address this. 
There are also grave fears within the scientific community that the research focus required for real innovation to emerge is not there and that this is an organisation that will not keep committed to the excellent research the Industrial Research Ltd is currently undertaking. This is a concern because you cannot separate out commercialisation from basic and fundamental research. This is a hurried piece of legislation about which we would have liked to see more questions answered. We want to see it succeed but Labour is supporting it with grave reservations. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am pleased to speak today at the third reading of the Callaghan Innovation Bill. I would like to acknowledge again Sir Paul Callaghan whom this institute is named after. I would also like to acknowledge members of the Education and Science Committee. I do believe that we worked in a collaborative process throughout the committee. We did have a tight time frame in which to turn this bill round but I was very pleased that we made a huge effort as a committee to not only write to stakeholders but also provide a very lengthy commentary on the bill. I think it is pleasing that nearly all of the submitters supported this legislation. I also want to acknowledge that this is part of our wider plan and agenda to ensure that New Zealand stays ahead of our global competition. The bill helps to unlock the world-class potential of our scientists and helps them to plug into businesses in the global market place. 
But the major purpose is to ensure that we get the best ideas out of the lab and into the market place more quickly. It will have operations in Auckland Wellington and Christchurch and the reason for this is that these operations will be close to clusters of likely business clients making them as accessible as possible especially to smaller firms. 
I want to also acknowledge the general approach of the select committee. As has already been said by a number of members we decided purposely not to take an overly prescriptive approach. The reason for that was to give the institute the maximum ability to not only move with technology but also be not overly prescriptive in terms of the people it appoints to the organisation. 
A point that I would like to raise in this third reading is that collaboration was a very important point raised by a number of submitters. So Callaghan Innovation will exist within a flexible framework that will encourage innovation but also collaboration. We all know that silos have existed in the past and that they lead to greater compliance costs and time wasted for business. A key feature of Callaghan Innovation is to foster better connections between innovation expertise and facilities that will already exist within Callaghan Innovation but additionally to link up Callaghan Innovation with New Zealand Crown research institutes polytechnics and other research organisations. During the select committee process we made a key change to the legislation to strengthen that collaboration. 
I think it is important to also acknowledge the dual function of Callaghan Innovation. The first function will be to fulfil a range of things such as helping build industry-led innovation consortia—acting as a portal through which businesses can access appropriate research and development and technical expertise being a gateway to firms to access business research and development grants and commercialisation support fostering the mobility of experts by for example sponsoring secondments between universities and developing links with international research organisations to ensure local firms can connect with worldwide experience. 
The second key role of Callaghan Innovation is to be a service provider that is going to be offering businesses technology testing applied research and development work on a contractual basis business development and technology and knowledge transfer. 
I want to briefly finish with some of the select committee changes. As I have already mentioned there was a key change in the bill in terms of strengthening collaboration. We also made a change around the term “net benefit” to be clear that Callaghan Innovation must operate for the benefit of New Zealand. Thirdly a number of issues were raised regarding the establishment board. I think it is very important at this point to acknowledge that the select committee made a lengthy commentary on the internal framework for research capacity. We outlined the issues that had been raised as a result of submissions. The Government has appointed a seven-member establishment board. The establishment board will play a critical role in making initial decisions relating to not only staffing requirements but also the exact location of the innovation centres in Auckland Hutt Valley and Christchurch. 
I think it is also important to note that this legislative framework must have funding and that is why in 2012 our Budget delivered $250 million of new operating funding and $76.1 million in capital funding for science innovation and research. This reflects our belief that science and technological innovation are major drivers of growth. I think it is important to acknowledge that we are now spending $1.24 billion which is a 17 percent increase over the last 4 years in direct cross-portfolio funding for science and innovation. There is $166 million going towards Callaghan Innovation. That is a huge amount of money. 
In summary I am very pleased to have chaired the select committee on this bill. I believe that Callaghan Innovation will help firms from a range of backgrounds be more competitive grow faster and connect them with the scientific support that they need to develop and commercialise their ideas for the betterment of our country. That is good in terms of ensuring that New Zealanders have a higher standard of living. Callaghan Innovation will support firms at different stages of development from start-ups to established research and development firms. Our Government wants to see more Kiwi businesses succeeding. We want to create a bridge between business science engineering and design. We want to help our world-class scientists and businesses turn their great ideas into valuable products more jobs and higher incomes for Kiwis. 
I want to finish by thanking the members of the Education and Science Committee for their swift consideration of this very important bill. I feel privileged to be part of a process that will help see Callaghan Innovation up and running in early 2013. I want to acknowledge the man whom this is named after because I do believe that this institute will be a great thing for New Zealand. Thank you. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 Just to follow on from the end of Nikki Kaye’s speech I think everyone in this House recognises the incredible contribution that Sir Paul Callaghan made to science in New Zealand and made to innovation in New Zealand. He was a person who drew together the work of the public and private sectors perhaps in a way that few other New Zealanders have done. He was a man with a tremendous vision for what this country could be the way that it could bring together its innovation its talent and its environment and I think that that is something all New Zealanders should aspire to. 
This particular piece of legislation the Callaghan Innovation Bill the Labour Party is supporting but we do so because we have the hope that the kind of vision that Sir Paul Callaghan had could be enhanced by an institute like Callaghan Innovation. However where we stand today I have to say that I am doubtful about that given the model that has been placed in front of us by the Government. Everything about this piece of legislation everything about the process that it has gone through—with all due respect to the Education and Science Committee it was a rushed process—everything about the way that the advisory board has been set up or not set up and all of those things point to muddled confused and ad hoc thinking around research and development in New Zealand. That is what we have seen consistently from day one from this Government: muddled confused and ad hoc thinking around research and science. 
We need research and science in this country to be working well in a coordinated way and an innovative way if we are going to see our economy grow in a sustainable fashion. Everything I see in this bill points to the fact that the Government still does not get that and still has not grasped the fact that it actually needs to take more than just one-off decisions. It needs to have a greater plan for the way research and science will work in New Zealand. 
I have got two or three specific concerns about this bill that I raised in the Committee stage and that I still do not feel have been resolved. The first of those is around the question of the functions of Callaghan Innovation and the question of the allocation and administering of funding. Mr Joyce in his speech just now tried to reassure us that that would not be about contestable funding so much. Well actually it does not say that. It does not actually say that in the functions provisions. It is a very wide ambit that is now available to Callaghan Innovation to be involved in the allocation and administering of funding and I do believe that this sets up a confused picture for the role of Crown research institutes vis-à-vis Government agencies that deliver funding. I do believe that in time it could lead to confused lines of accountability and it could lead to conflict within the sector. I simply do not believe that that particular part of the functions of Callaghan Innovation should be there. 
The other thing that I do want to speak about is around the question of the stakeholder advisory group. I am staggered that this Government still has in this legislation the provision that the advisory group “may” be established. This is essential. We heard from both Steven Joyce and Nikki Kaye about the importance of getting over the silos of bringing together people from different parts of the research community and yet the body that would best do that in the form of the stakeholder advisory group does not actually have to be established. I just find it remarkable that the Government is that lax about this. It is muddled it is confused and it is ad hoc. 
More to the point there is a lot of discussion about money and dollars and we can all go back into that but one thing that we do know is that this Government told New Zealanders when it discontinued Labour’s research and development tax credit that that money would find its way back into research—$315 million worth over 3 years. Well that reality has not occurred. The Government has broken that promise. [ 
Interruption 
] It has been $100 million over 4 years Mr Woodhouse not $315 million over 3 years. There is quite a big difference between those two figures and that is a broken promise. 
But the broken promise that I want to mention in regard to research and science is about the pipeline of people who will actually be doing the research—the scientists who actually do the work. In New Zealand we can be proud of the scientists who have been produced from our tertiary institutions but in this legislation I see the Government’s wilful neglect of science scientists and the training of scientists coming home to roost. The broken promise here is around the fact that nobody went to the people of New Zealand in 2011 and said: “We will abolish allowances for postgraduate study.” There was not one political party represented in this Parliament that went to the people of New Zealand and said: “You know what? We do not think there should be allowances for postgraduate study. We think that they can fend for themselves.” No party did that yet this National Government came to this Parliament with the Budget this year and abolished allowances for postgraduate research. 
It is those researchers who will be the people who will work in Callaghan Innovation who will be the people who will provide the scientific breakthroughs and this Government is sending a message to those people: “If you haven’t got the money in your pocket if you don’t come from a privileged background forget it. Go overseas.” Day after day I get letters and emails from people who are doing just that who are saying they are giving up on New Zealand because there is no support for them to undertake postgraduate research. This kind of activity Callaghan Innovation’s core business will happen only if we have got a pipeline of scientists coming through training in our tertiary institutions doing their postgraduate study and then as my colleague Dr Megan Woods said undertaking postdoctoral research—except that we have got rid of the support for that as well. This Government has got rid of the support for postgraduate allowances and also for postdoctoral research. It is stifling and it is shutting off the pipeline of people who are needed to contribute to something like Callaghan Innovation. 
So although on this side of this House we can support this bill because at the highest level the goals are the right ones there is no point in having a Callaghan Innovation if we do not have the scientists in New Zealand who will work there if we do not support those scientists right through from school to tertiary level. Again remember that this is the Government that got rid of science advisers in schools. Not only is it taking away the opportunity at the tertiary level; it is not even investing in science at the secondary level. The Government moans and bemoans the lack of engineers and scientists but this is about a pipeline all the way from school through to work and there being job opportunities. At the moment what this bill speaks of is one small part of the equation being dealt with but the rest of it being forgotten about. It is very hard to take seriously this Government’s commitment to research and science if that is all that it manages to do. 
 This is not just an Opposition politician saying this. We have heard in the last few days the deep concern from the scientific community in New Zealand about the kinds of opportunities that this Government is providing them. Here are just some of the words used by some of our senior scientists in the last few days about New Zealand’s research and science system: “It’s falling to pieces.” “It’s an embarrassment.” “It’s a lottery.” and “It’s in crisis.” These are the words of our scientists many of whom are giving up on New Zealand. The obvious conclusion is that if those scientists feel that our system is an embarrassment that it is in crisis and that it is a lottery then they will leave New Zealand. We have seen evidence of that right around the country. New Zealand suffers economically and it suffers socially when we lose these scientists. 
I love the fact that we can stand in this Parliament and say we are going to do something about innovation in New Zealand and we are going to create a more coordinated approach. But the reality leaves that goal so far behind that it is an embarrassment. Our system is in crisis and this Government does need to step up to the mark. When Labour was in office we said that we would do the research and development tax credit because that would keep us competitive—that would keep us competitive with other countries. The National Government comes in and says it does not like that. It comes in with another ad hoc scheme that is clearly failing if the scientists of New Zealand are to be believed. 
We need a far more coherent system of funding for science and research in New Zealand. We need to invest in the people who will make New Zealand work. One of Sir Paul Callaghan’s favourite phrases was talking about New Zealand as “a place where talent wants to live”. He understood that it is the people and it is the talent that will drive New Zealand science. The institutions like Callaghan Innovation will be helpful but unless as a country we are prepared to invest in the people and the scientists we simply will not live up to those goals. 
Labour is supporting this bill but we do so knowing that we are a long way away with this National Government from having adequate support for science and research in New Zealand. 
DAVID CLENDON (Green) 
: 
 Tena koe. I am pleased to take a final call on this bill this legislation that we now will refer to as the Callaghan Innovation Bill of course. The Greens initially supported this legislation under another name for the very simple reason that we did see a need a value in establishing some sort of organisation some entity that could bridge the gap and that could be a networking organisation a facilitation organisation to inform developments both within science research and within the business community. There is a crying need for us to better develop and to turn good ideas good science and good technology into saleable ideas—saleable and ideally weightless commodities or very high value low volume commodities—that can better serve our economy. Unfortunately we were obliged to turn our backs on that support. We are now in opposition to this legislation. 
It is interesting that in my notes I have one of the words used by the former speaker our Labour colleague Grant Robertson and that is “muddled”. He added the words “confused” and “ad hoc”. Unfortunately they are fair descriptors of the nature of this legislation. 
The chair of the Education and Science Committee Nikki Kaye indicated that the Government’s choice was not to make this legislation prescriptive. That is something of an understatement. This is so permissive that the parameters within it are almost meaningless. There are virtually none. This House today will pass this legislation into law with very little idea of the outcome of the final structure of the real functions and of the powers and limitations of this new entity and that is a great shame. 
We think that in a sense it is unfortunate that Sir Paul Callaghan’s name is attached to this entity because an organisation whose genesis is confused is muddled and is ad hoc is unlikely to be the success that that name deserves I would say. This bill was rushed through and indeed the process—the very flawed process—is part of the reason that we are opposing this legislation. Not all of it—the key to it is the content what is contained within it—but the process was inexcusable. Two or 3 days after the bill was introduced we had the first reading. The report-back date from that first reading was 6 weeks which was the start of November—the 6th I think. Less than 4 weeks later we are now seeing the third reading of this bill and there are still so many unanswered questions so much we simply do not know and so much that is left to ministerial discretion that it is a misuse of the power of this Parliament to bring a piece of legislation like this to the House. 
 There was not a large number of submissions on this Callaghan Innovation Bill. Those that did come in were remarkably well-informed and coherent given how little time there was for those people and organisations to prepare their submissions. It is fair to say that most of them were supportive but it was very very qualified support. Almost without exception those who were supporting the legislation proposed amendments or highlighted shortcomings difficulties or potential problems in the bill and they were spot on the mark. Very few of those concerns have been met. It is unfortunate that the Government accepted virtually none of the amendments put in the select committee consideration of the bill. The committee itself was able to put in some somewhat better provisions but overall it is still so permissive and so unconstrained. The Minister will have such extraordinary power to direct the future of the relationship between business and science and the academic community that it is almost doomed to fail in its present form. 
As I have made the point before this new entity will almost certainly disrupt and set back some very positive and productive relationships that have already been established. The Economic Development Agencies of New Zealand the umbrella body for the economic development agencies around the country put forward a very good submission when it highlighted the danger of the very good work being done by organisations like the Economic Development Agencies of New Zealand and others being likely to be set back because this bill is so poorly thought through and so poorly drafted. Inevitably almost this organisation will come in over the top and undo some of the good work that has been done. 
The Economic Development Agencies of New Zealand pointed out that the economic development agencies are in a unique position to add value to leverage the money that comes to them through contestable funding because not only can they apply to it the limited resource that they get but also they can add it to their existing resource. It was a very compelling submission made by the Economic Development Agencies. Unfortunately it will be deeply disappointed to see that the existing relationships the organisations and the work that has been done are nowhere protected within this bill and in all likelihood the good work will be undone. 
The deal-breaker for the Greens in this bill was the very bland bald statement in the bill that the Advanced Technology Institute—Callaghan Innovation as it now is—will administer and allocate funding with absolutely no indication and no information about which funding or on what grounds. We are told that fairness and transparency will prevail. Well I have to say that one can very transparently starve critical organisations of funding. One can very fairly make decisions if you use a fairly loose interpretation of that word. It is an appallingly broad non-specific provision in the bill and that critically was one that was highlighted. The danger of funding being channelled so so narrowly was highlighted in many of the concerns of the submitters. 
Despite being described as a networking agency and despite the Cabinet papers highlighting the fact that it would be a networking agency nevertheless Callaghan Innovation is also going to have a considerable research capacity. Initially it will take over Industrial Research Ltd as a subsidiary and in time Industrial Research Ltd will be disestablished. You get the classic funder/provider dilemma. Callaghan Innovation as a provider of science and research will also be making funding provisions and that is a very very unsatisfactory outcome for this. The Institution of Professional Engineers New Zealand advocated for this new organisation not to have a research function saying that it should instead find the existing providers and facilitate resource and support—all of those good things that the language of the bill might allow but almost certainly will not given the clumsiness of the structuring that has been done. 
There is a major concern now for some 360 to 380 staff at Industrial Research Ltd mostly scientific and technical people who are in very short supply in this country and it is a diminishing supply. Those people go into the holiday period looking forward to the new year with considerable trepidation. What is their future? Is it secure? The likelihood is that it is not secure. We are likely to lose more talent which has been the story of science and research in this country for at least the last decade or indeed the last 15 years or so. 
 The question of the career path for science was referred to by some of the Labour speakers who have already spoken today. I would suggest the Minister have a good read of last week’s  
National Business Review 
 particularly the article from Dr Jacqueline Rowarth who is currently at Massey. She is a very well-respected scientist with a good track record particularly in agricultural science. She points to the fact that the Minister of Science and Innovation is talking about supporting more science and more engineering graduates from our universities but he is rather overlooking the fact that one can fund as many positions as one likes but one must not overlook that potential science and engineering graduates are not going to go into those fields if they cannot see a clear career path. It is muddled decisions like this one about Industrial Research Ltd that will discourage that young talent from going into science as a career. 
We know that the Minister has decreed that one of our largest universities shall have x number of entrants going into science and engineering. The rather “quaint” response from the university which I absolutely endorse—it is “quaint” in the Minister’s eyes—is that it has got this belief in something called academic freedom and that the institutions must be allowed to decide how many students they take on and graduate in time. But the key point is that there must be a career path or our science and technology capacity will erode over time as indeed it has eroded over the last several years and that is something we need to turn round. This entity could have helped that. Instead we fear that it will actually have a negative effect on that. 
Finally I would say that having established this entity this Callaghan Innovation—and I still believe there needs to be another word after that to give it a proper title—and put on it the name of one of our most remarkable scientists and one of our most remarkable science communicators the responsibility now lies with this Government to make it work. I think that will be a significantly difficult task for it. Thank you. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It gives me great pleasure to speak on this Callaghan Innovation Bill and to take a short call. I must admit I was very concerned to hear that dreary dissertation from the Greens. They do seem to oppose anything that will enhance economic growth in this country. Of all things I would have thought it would be the area of science development and innovation and its commercialisation that this country badly needs particularly in the private sector. That is what this Callaghan Innovation Bill is all about. 
Just a few months ago the Government published its  
Building Innovation 
 report and it was particularly ambitious. It set out the Government’s determination to shift private investment in research and development from 0.5 to 0.6 percent of GDP as it is now to 1 percent within a few years and to shift the public investment from 0.68 percent as it is now to 0.8 percent. This is very important for New Zealand. The National Government under the very difficult conditions of a world economic recession has increased our investment in science research and development from $1 billion to $1.25 billion. 
We heard—again a dismal speech—Grant Robertson of the Labour Party saying how science in New Zealand was falling to bits. Shame on him. We have just had the Prime Minister’s Science Prizes and we saw the depth and breadth of science and scientists in New Zealand and the tremendous work that they are doing. Yes of course we would all like more investment in this area and again I report that in each of those areas of basic science such as the Marsden Fund the Health Research Council of New Zealand and the Performance-based Research Fund each of these areas has had more investment under National and there will be more over the next few years. Of course we would like to expand this when and if we possibly can. 
The Advanced Technology Institute now Callaghan Innovation was a key recommendation of last year’s  
Powering Innovation 
 report. It points out very much that it will have a wide spectrum of activities. It will help New Zealand’s industries to carry out more research and development and to commercialise them—from food and beverage to agritechnologies to digital technologies to health technologies to therapeutics manufacturing and to high-value wood products. 
I want to just point out that the late Sir Paul Callaghan wrote in 2011: “My view is that to succeed New Zealand businesses need to be the best in the world at what they do. I do not care what they do so long as it is legal and not morally objectionable.” We heard Megan Woods and we heard Grant Robertson and others talk about this bill being too permissive. The whole point of innovation is that it has to be. In an environment of flexibility and nimbleness that is what our businesses require. So Callaghan Innovation is all about assisting our businesses to be globally competitive and innovative so that they will indeed be the best in the world. It does indeed emphasise collaboration between business universities Crown research institutes and other research institutes. 
Lastly I want to once again pay tribute to Sir Paul Callaghan and his family for the amazing spectrum of activities that he has carried out over his many many years of research not only in science and not only through being a science communicator—I think we will all remember those wonderful wonderful interviews with Kim Hill and with many other interviewers from around the world and his many books including  
Wool to Weta 
—but also his huge generosity to politicians from every side of the House. He came into this building time and time again to give us his message. Indeed this Callaghan Innovation Bill is all about carrying out his vision for the future of New Zealand in science and innovation and its commercialisation to help economic growth in New Zealand for the benefit of all New Zealanders. 
TRACEY MARTIN (NZ First) 
: 
 Kia ora. I am pleased to rise to speak on the Callaghan Innovation Bill after Dr Paul Hutchison. I think his final comments were very very interesting. They were around flexibility innovation and having an opportunity to have a research and science provider with that flexibility. So on the one hand you could say that the bill is very permissive or you could say that actually we require environments of trust with oversight. I would hope that the Government benches having reached into this area of trust of experts in their field with oversight might like to shift that view to education. That would be great—that we actually trusted the experts in our current schools and provided some flexibility and some innovation abilities inside that field. 
But back to the Callaghan Innovation Bill. I want to reconfirm again that the understanding of the Education and Science Committee was that 80 percent of the role of this institute is relationship building—that is the networking of business science and research institutes to produce commercial outcomes that will lift New Zealand’s exports. One of the intended consequences is that any sort of lift in that performance in that commercialisation and in that productivity would lower New Zealand’s unemployment numbers and I think that is probably what we are all hoping will happen. The manufacturing jobs downstream of a new commercial entity of a new commercial enterprise that had come out of this networking and this relationship between business and science would drop New Zealand’s unemployment as opposed to taxpayers’ money being expended on this research and this commercial development and then another country’s unemployment numbers dropping. 
 So one of the side effects and one of the flexibilities that we would like to see as a downstream effect of Callaghan Innovation is that when these products are developed when they are brought to a commercial point then manufacturing is considered here in New Zealand. The price of the widget or the manufacturing price of the widget is not the only consideration and those select committee members who discussed the difference between “benefit” and “net benefit” will know what I am talking about. 
That leaves 20 percent of the role as understood by the select committee that stood around direct investment by Callaghan Innovation into research funding and that was very very clear. I was pleased to hear the Minister of Science and Innovation say in the beginning of his speech that Callaghan Innovation would not be a distributor of contestable funds because it was a concern around them having two hands in the same pot. 
I guess what it does do though is it now opens concerns that the members on the Opposition benches of the select committee attempted to get some security around: the way that the institute would seek funding. It was very clear from the submissions that contestable funding is tight. We did not want to see another player in that field. The intention at least on the Opposition benches I believe was that this 20 percent would be a pool of the institute’s own money with which to invest in research and development with business that is not currently met by any other fund. So I am a little concerned that the Minister now says that it is not going to be distributing contestable funds because I believe that opens the door to it to now be a competitor for those funds and that was not what was discussed at the select committee. But at the end of the day you have to put this out there with trust but obligations and trust and oversight and there will be many of us who will be watching. 
We also had a big conversation around the duplication of research and I want to also put that on the record. It was made clear to us at select committee that not all duplication is bad that particularly in research to have the testing or the research done by another organisation completely hands-off and removed from the first one to verify results or to maximise whatever the outcomes are is not necessarily a bad thing. But it is going to be one of the things that Callaghan Innovation is going to have to work out over time. Where is that balance between productivity as in duplication of research and then actual destructive duplication? 
There is still a gap and I am pleased to see the member Colin King in the House right now because he very kindly at the Committee stage shouted across the Chamber to me—when I was looking for some assistance about whether this bill might provide assistance to Mahurangi Technical Institute and its eel-breeding programme to take it from 12 days to a commercially viable operation—“PGP” which is the Primary Growth Programme I believe. 
Colin King 
: Partnership. 
TRACEY MARTIN 
: Partnership—I beg your pardon. It is the Primary Growth Partnership. 
Colin King 
: I’m here to help. 
TRACEY MARTIN 
: And I want to thank him for his assistance. It is very kind of you—thank you very much. So I went away to check on Mr King’s advice and unfortunately in this instance not only has this research unit applied twice to the partnership fund but it has applied to every other fund that the Government actually has for this sort of development the last one directing it back to the Primary Growth Partnership. It was to absolute shock and horror that in question time today the Hon David Carter got up and announced that $43 million of New Zealand taxpayers’ money will be given in research dollars to a company owned by the Japanese— 
Colin King 
: Partially owned. 
TRACEY MARTIN 
: —owned by the Japanese—and therefore this small completely New Zealand based New Zealand - owned New Zealand research institute cannot find $3 million from its own Government. I think that is a shame Mr King and any assistance you would like to give me and the people at Mahurangi Technical Institute in Warkworth to bring forward what will be one of the most productive industries for this country in an export market that everybody in Asia will be very keen to participate in I welcome Mr King. My office number is on your dial. 
I still want to bring up another point. There is a requirement to reimburse the ratepayers of Auckland. The ratepayers of Auckland—or more specifically the ratepayers of the old Manukau City Council—invested into The FoodBowl. The FoodBowl which is going to be absorbed by this bill is currently a wholly owned subsidiary of Auckland Tourism Events and Economic Development and it has on its books $2.5 million over the next 5 years. That is its budgeted amount obviously. That is from its 2010-11 budget going forward. I would suggest that the Government or the working party setting up the institute needs to go and have a look at the amount of money taken from those ratepayers from the 2010-11 and 2011-12 financial years. I think they need to write a cheque and give it back because this asset is actually an $18.1 million capital asset over there in Manukau City. It was developed by Enterprising Manukau which was a council-controlled organisation of that local body. Considering the drama that we had last week—and I need to ask Mr Smith actually. Does Mr Smith think that this is core business? 
Simon O’Connor 
: Dr Smith. 
TRACEY MARTIN 
: Dr Smith—I beg your pardon. Everybody wants their title. Does Dr Smith believe that this is core business that the ratepayers of the legacy Manukau City or the ratepayers of Auckland should be investing in? If not then I expect Dr Smith to go to his caucus and to fight hard to get that money given back to the ratepayers of South Auckland who goodness knows with social deprivation scores of 7 and 8 absolutely could do with some of their ratepayer money back. 
However New Zealand First will be supporting this bill. We support it on the basis of trust with oversight and we will be watching. Kia ora. 
COLIN KING (National—Kaikoura) 
: 
 It is an urgent need that this bill the Callaghan Innovation Bill gets passed and it is a pleasure to be speaking during the third reading. 
I want to just dwell on two points that have been raised. The first one is around the attitude of the Greens and Labour in their approach to this whole matter. I would like to refer to the Business New Zealand submission. Business New Zealand for instance has 14000 members and 17000 associates and its comment in its submission was that “There is a gap in the market at the applied end of the R & D spectrum which [Callaghan Innovation] is designed to fill ...”. This is something that has been overlooked as the Labour and Green members laboured the point of the submissions that came through from those people who had vested interests. In actual fact I would like to remind Labour and the Greens that they had 9 years to get some resemblance of order around the Crown research institutes around science and innovation and I would just like to have it on record that they failed miserably. 
Callaghan Innovation will be driven by the market sending signals back to innovators as they seek science solutions. From that point of view we will find that the solving of these situations will be around research and development problems and challenges and they will create the opportunities. This bill is so very appropriate in doing so. What the Callaghan Innovation Bill is designed to achieve is a robust and successful connection between the market and innovation. 
I would have to put it on record also that during the submission stage in the Education and Science Committee one detected a degree of self-interest and patch protection coming across from those people whom we laud as scientists and researchers. 
This bill appropriately puts together the essential framework in which this dynamic organisation which carries the name of Callaghan Innovation will drive innovation. It will develop and increase the confidence that we want to see within business to grow the investment because really we need to build a culture inside this country of business confidence of getting an excellent return from research and development investment. That is why it is not happening or has not happened. It will be the measure of success of Callaghan Innovation. That will be the bar on which it will be measured. 
 Although the Greens and Labour talked about the funder/provider split let me remind you that under Labour we put together the funding and provision arms of the New Zealand Transport Agency and we did that for a very good reason: so that there were efficiencies. In actual fact Business New Zealand pointed out: “We endorse this as a sensible move so that the operational side of [Callaghan Innovation] does not get politicised due to perceived conflicts of interest.” 
I support this bill wholeheartedly. It is urgently needed and it is urgently needed because we want to provide confidence to business to invest in research and development find innovative solutions and drive this country’s economy. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 We certainly do need confidence and we certainly are not going to get it from that Government over there. Under this Government—under its watch—we have lost 40000 jobs in manufacturing. Just this year alone more than 50000 New Zealanders have left for Australia. That does not exactly fill one with much confidence for the initiatives that the Government is coming up with. It is a disaster. It is a disaster and the solutions require a hands-on approach that is designed to make some brave decisions—brave decisions about economic development that are about joining up our economic development and having an actual strategy that is actually going to deliver some jobs down the track. 
This bill the Callaghan Innovation Bill is a poor effort at doing that. It is more of a wet bus ticket. We as you know support this bill with reluctance. We consider it a missed opportunity and half-baked. It is a missed opportunity to truly grow the economy. It is typical of this Government because it is not interested in meaningful input from industry it is not interested in a broad economic development vision and it is not interested in a broad set of policy initiatives that make research science and technology more accessible to New Zealand business. Instead the Callaghan Innovation Bill is a so-called grand scheme that is not worthy of the name. 
We need to create an environment where innovation is interconnected between the education sector at the primary secondary and tertiary levels but also with industry so that we are producing young people with the skills that our industry needs to innovate and then—then—we also need a robust scientific research community the science providers and we need to understand what it takes to commercialise. We need all of those things and we need them all to be interconnected and not set apart from each other. But no instead we have got here a piece of legislation that has not been properly thought out where the industry has not been properly consulted where there is not a partnership or a collaborative approach and where it has been rushed through—rushed through—in a very short space of time which has not allowed the industry to fully participate or for it to be discussed. Instead we hear on the other side of the House talk about vested interests. Well where was the proper discussion in the select committee that truly consulted the breadth of the industry about this bill? 
I am pretty disappointed in this bill especially because it has come out of the Education and Science Committee which is chaired by Nikki Kaye. For this to be a good piece of legislation it requires an understanding of 21st century learning and innovation but it clearly does not have that. It is held in suspicion by the stakeholders and I am sure that my colleagues across this side of the House have talked about that. It needs to have the stakeholders on board to make an innovation economy thrive. Those who did submit had very mixed views and reservations and I have read some of those submissions. There were many who submitted and there were many others who could have and should have submitted but were given virtually no time to do so. 
In contrast I have sat on that same select committee for the last 6 months with Nikki Kaye chairing considering another inquiry into 21st century learning and literacy and what is really needed to transform our education system to ensure that our children become the workers of the future—the workers of the future who are equipped for the jobs of the future that we need to transform our economy. That is a good piece of work but this is not. It is interesting how the dots have not been joined. This is another critical piece of the puzzle to put in place the levers that can help that innovation to occur but this bill is very unlikely to achieve that and it is as I said an enormous missed opportunity. 
I just draw everybody’s attention to part of that missed opportunity. In our technology sector which is still very much emerging and very much an important part of our future economy we need to have the flexibility to allow the small to medium sized enterprises—not the multinationals the small to medium sized enterprises—to grow and innovate. The technology sector is our third-largest export earner behind dairying and tourism. It generates over $7 billion in annual revenue. Technology touches on every other major market segment and it is our fastest-growing highest per capita - earning industry for the country. As we all know on the domestic front it contributes nearly $20 billion to New Zealand’s economy and employs over 40000 people. 
It has been identified under this very Government that innovation is one of its six priority sources of economic development but in order to make that happen it has got to get serious about the work that is really needed to make science and innovation the heart of our new economy. The submissions on this bill stated that what was needed was closer alignment with the science providers and that there were potential conflicts of interest with the funder/provider. I note that the member across the House alluded to that so clearly that is a bit of a sensitive issue over there. Overall it is a disappointment. I would like to quickly touch on how if a truly collaborative institute was being established to help grow our new manufacturing industry there would be a much closer synergy with the stated needs of the industry. 
I just want to mention our local information and communications technology industry which is a pretty important industry. It is a sector that if it was to grow to the same relative size as Australia’s would be a $4 billion industry rather than a $3 billion one. The Government with its $2 billion annual spend in this information and communications technology area could play a really key role in that industry’s development. Local IT companies are competitive. They are cost competitive. They have got a 25 percent to 35 percent cost advantage over Australian companies and a larger cost advantage compared with Australia the US and the UK. I mention this really important industry because that is what we should be thinking about. We should be joining the dots between the industries that we need to be investing in and our primary secondary and tertiary education sectors and what those industries and our tertiary education institutes are telling us. Just think what could be achieved if this Government was to actively listen to its emerging industries—not the multinationals but the Kiwi companies—and to what the Kiwi companies are saying to us. They are the ones that we so desperately need to foster and develop so that our kids have got jobs and so that our kids not only will have the jobs of the future but will actually stay in New Zealand and not be part of the 50000 people who have left New Zealand this year to go to Australia. 
I want to end on a broken promise which is just one of the many broken promises that we have seen under this Government and that this Government has become known for. It is a research-funding broken promise. The promise was to use a third of the savings from the discontinued research and development tax credit to directly fund research—$315 million over 3 years. The result has been $100 million over 4 years. This was largely from underspent funding from the previous year and reversing other commitments. Of the total new science funding spent in 2009-10 on science $44 million was unspent funding from the year before. In this bill this Government is trying to make a big deal of all the new funding but the reality is that although $166 million has been committed to develop this institute most of it came from existing funding savings. It is a missed opportunity. It is not part of a joined-up strategy. It is another example of how New Zealanders have been let down. 
SIMON O’CONNOR (National—Tamaki) 
: 
 I want to step away from this conspiracy-driven Chicken Little approach from the Opposition today and I want to particularly add voice to what is actually a very successful research industry in New Zealand realising that the research that Kiwis do already is exactly what this institute is wanting to work with. I mentioned in one of the earlier speeches around this bill the Callaghan Innovation Bill that the institute works as a conduit and that is why the bill has speedily gone through—the concepts are relatively easy to grasp—and why the fundamentals are still going to be worked out by the board. It is fairly appropriate and normal in a situation like this. 
Once again I just want to draw attention to the great research that is being done by Kiwis. I had the great pleasure of joining a friend of mine at the Prime Minister’s Science Prizes where he was awarded the Prime Minister’s MacDiarmid Emerging Scientist Prize—Dr James Russell. Amazing stuff he does in statistics ecology and genetics. Other friends of mine are doing their postdoctoral research here in New Zealand be it in engineering electrical engineering genetics physiology or ophthalmology; these are just people whom I know—through Auckland University in particular—who are doing amazing research already. 
This is not an environment where everything is falling to pieces. These are Kiwis with great brains great minds who have taken the opportunity to study. They do not all stand there expecting the Government to hand out at every time they complain but they are people who also want to stay in this country support this country and take that innovation into a commercial sense. 
The context of this bill is positivity. This country has great researchers it has great minds it has great Kiwis and they are the Kiwis who want to stay here— 
Tracey Martin 
: Good eels. 
SIMON O’CONNOR 
: —and who want Tracey Martin to make the widgets to use your quote. They want to stay here and they want this institute. It is a great concept. It is a conduit from research into business. Let us pass this bill and get on with it. 
Mr DEPUTY SPEAKER 
: Five minutes—Sue Moroney. 
SUE MORONEY (Labour) 
: 
 It is indeed a pleasure to rise and speak to—well since I spoke to it last it has changed its name. It is the Callaghan Innovation Bill. I do just want to point out though before I speak on the detail of the bill that I think that last speech from a Government MP said it all which is really that this bill is so devoid of vision and so devoid of something that is desperately needed by this country that all the last member Simon O’Connor could do was rehearse in fact what is already happening in this country. It is already happening. All he could do in his speech was rehearse research that has already been undertaken. So I have to ask that member what he thinks this bill actually lends the situation to improve it unless that Government so lacks ambition for this country that it thinks that everything that is going on now is just fine and dandy. 
On this side of the House certainly within the Labour camp we do not want to see the continuation of a flat-lining economy that is being led by that Government. We think that we actually need to boost the economy. The Prime Minister once said he was going to supercharge the economy. That is what he once said—he was going to supercharge it. I am sorry Labour is supporting this bill but this by no stretch of the imagination supercharges the economy in the way that the Prime Minister once used to say he wanted to do. 
But then the Prime Minister once used to say and once used to promise a brighter future for this country. I notice that he has stopped using that particular phrase and so he should. He promised the brighter future not in just the most recent election but also in the one before that again; 5 years later the New Zealand public now sees that the brighter future was something of a sham because they did not expect that it meant selling the State assets down the tubes they did not expect that it meant increasing class sizes and they did not expect that it meant cutting funding for early childhood education. 
I do want to talk about Sir Paul Callaghan because he was a remarkable New Zealander. I think it is actually a little bit of a shame that something this lightweight has been used in his name because what I knew of Sir Paul Callaghan was that he was a man who was well thought through in his thinking. When he talked on an issue and saw what a future really should look like for New Zealand he took a comprehensive approach to it not a piecemeal approach to it like this bill does. It really just tries to make a symbolic attempt at making it look like the Government is doing something serious to improve science and innovation in this country when in fact all it is actually doing is establishing a new statutory Crown entity. 
In supporting this bill I guess Labour asks whether it will do any harm. The answer is that it probably will not do any harm but will it do any good? Well we do not believe that it will do much good in terms of the serious issues that confront this country at the moment. I come from a really important part of our country when it comes to science and innovation: the Waikato. In the mighty Waikato we are really proud of the science capacity and the research capacity that we have particularly with regards to the production of food because we do actually consider ourselves to be the food bowl of New Zealand and we have the smarts to go with it. 
When Labour was in Government there was a proposal that was being worked on going by the name of the smart food network which actually would have joined up a whole series of innovations across the country. It was not a new Crown entity without scientists even being involved in it which is what this bill proposes but it was actually an on-the-ground innovation that would have worked directly with small companies to join together so that they could have the capacity to actually test out their ideas their new innovations in a manufacturing sense. This bill appears to me to be an afterthought of a different attempt at doing exactly that but that attempt was stopped—stopped in its tracks—by this current Government. That was an approach that I think would have made a much quicker and more comprehensive difference to the innovation and research going on in this country. 
I am standing to support this bill. I think it is woefully inadequate and it is not the path to the brighter future. 
STEFFAN BROWNING (Green) 
: 
 I rise to speak to the Callaghan Innovation Bill. The model in this bill probably could be mostly right. It would be right if it was purely the facilitator that the bill spoke of initially—a connector of both business and people who cannot find the people they feel they need to solve some solutions—but the bill as it stands does not necessarily stop there. It goes on to a little bit of an unknown nebulous area that we are yet to find out about as the institute unfolds. 
Some of the wrongs are that effectively the Minister can interfere. For one the Minister could push genetic engineering through in there. He could say: “Hey we want our friends there to get some real help.” and push that way. The institute could do other things that suit its business agenda that are not actually in the public interest using Government funding. 
We look at the Crown research institutes and sometimes we wonder whether they are quite as functional as we might like but actually they are OK except in how they are funded. How they are funded is a problem and currently the structure for funding them is a little bit of a one-size-fits-all structure. Callaghan Innovation could be a good structure as needed because it requires other institutes to contribute and there is room for that sometimes but that is actually already happening with Crown research institutes too. However it needs independence and the independence is clearly not there in this structure. It would need certainty for scientists—certainty of jobs certainty of resources—and there is no real succession in there except that it may be the conduit for emptying out from the public sector scientists into the commercial world. The governance model needs some different strength. 
Crown research institute funding on the other hand if it was far more independent where they would have 51 percent of the control over how things work for them would be a much better area. It would be a much better outcome. We actually need science here that is pure science not just being obsessed with meeting some immediate commercial reality. There will be commercial benefits but not if it is just force-fed. 
The old Industrial Research Ltd did seem to have a record of poor management at times but what Industrial Research Ltd has done over recent years has been outstanding. I note the  
National Business Review 
 reporting on Shaun Coffey’s resigning from Industrial Research Ltd pointed out that this new institute will be a major challenge. We do not need it to be a major challenge; we need it to be an effective and certain structure. 
I note that Professor Jeff Tallon a physicist of superconductivity research has pointed out that industrial research will disappear into the institute’s maw. He had a concern about that. He also pointed out that Sir Paul Callaghan would have been shocked by his name being put to this structure and would not have put his name to any institution that has lost its focus on science and research. There is an unknown future. What we do know is that this is a privatisation of public science including feeding committed pure scientists into the commercial maw. 
Funding starvation—this will be a funder as well. It will go to the companies because this is what was put at the select committee. Scientists would be seconded from the science institutions and put into companies to do the bidding of the institute. The Institute of Professional Engineers New Zealand suggested that those researchers should ideally not be coming back and that the institute will receive replacements. So the Green Party will not be supporting this. We think there are too many flaws. Thank you. 
SCOTT SIMPSON (National—Coromandel) 
: 
 What a pleasure it is to stand and take a short call on this the Callaghan Innovation Bill. What a remarkable piece of legislation by a Government that is committed to growth to industry to innovation to science and to creating high-paying jobs for honest hard-working Kiwis. 
It has been interesting to listen to the members of the Opposition flailing around trying hard to find reasons not to support this very good idea. I am very pleased that Labour Party members actually do support it although you would not feel that or understand that given the calibre and quality of their speeches. The Green Party of course is against science and innovation and it just does not want a part of it at all. 
But $166 million is going into Callaghan Innovation because we as a National Government understand that collaboration growth and science are an important mix in combination and together given the right incubator the right opportunity they can come together to create high-paying jobs and high-value manufacturing opportunities such as exist in my electorate at organisations like Triodent. There are people in my electorate like Basil Morrison for instance who understand the connection and the mix that it is important to have in science and innovation and that high-value job creation is the key to success for our country. 
Jobs depend on businesses being competitive—businesses that sell something that make something that have services and that have innovation as their very fundamental core. Those businesses need to be unique they need to be producing quality services and products and they need to be fairly priced and able to compete internationally in the global market place. 
This is a proud and historic day for this Parliament as we pass this legislation because in years to come this bill will see the foundation stone of a great new innovative collaboration in our country. I commend this bill to the House with great vigour. 
A party vote was called for on the question  
That the Callaghan Innovation Bill be now read a third time. 
Ayes 105 
New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 15 
Green Party 14; Mana 1. 
Bill read a third time.