Cunliffe David: Advanced Technology Institute Bill — Second Reading 
Text is incorporated into the Bound Volume 
Cunliffe David: Advanced Technology Institute Bill — Second Reading 
[Sitting date: 08 November 2012. Volume:685;Page:6470. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I would like to acknowledge the Minister who has just resumed his seat the Hon David Carter and I wish him well in his bid for Speaker Mr Assistant Speaker. I also acknowledge the late Sir Paul Callaghan a very distinguished scientist and author of the book  
Wool to Weta 
 and a passionate advocate of a high-tech strategy for the New Zealand economy. I note that we are a long way from the noble aspirations that Sir Paul has left us with. 
The Advanced Technology Institute Bill will make a very small but unfortunately insignificant contribution to that goal. Labour is supporting the bill because it would be inappropriate not to but I wish to comment in these remarks on the great gap that will remain between the Government’s rhetoric and the strategy that its policies are employing. 
Just in the last week we are reminded again of that gap. Haier bought out Fisher and Paykel Appliances and we stand to lose I think the country’s second-largest provider of patents to overseas deployment and ownership. Hillside railway workshops has again been in the news with the chief executive of Farra Engineering criticising the failure of the Government’s policy mix to reflect the overall interests of the region’s engineering and manufacturing sector in the State-owned enterprises’ decision making. Today the Government has presided over the further watering down of the emissions trading scheme to reduce the incentives for smart clean technology. Dynamic Controls announced a downsizing of its Canterbury plant and unemployment—here is the kicker—hit 7.3 percent against projections of a decline. It actually went up by a massive 0.6 percent which is the worst since Bill English was last the Minister of Finance in 1999. Why is this happening? I guess the key point is it is not an accident. It is the logical necessary outgrowth of a fundamentally flawed strategic framework which this bill does not change. 
What did Government members think would happen when they have a tax system that favours speculation over high-tech which has no capital gains regime—we are almost alone in the Western World in that—no research and development tax credit and no accelerated depreciation for high technology? What did they think would happen with an insufficient savings regime that starves local business and high-tech of investment capital and makes them overly reliant on imported overseas capital and the sell-out of ownership which that too often too young too frequently requires? What did they think would happen if they continued to subsidise pastoral agriculture by not bringing it into the emissions trading scheme and providing irrigation subsidies while starving industrial and manufacturing industries of the investment capital and the fair opportunities that they need? 
We have a perpetual bias in our economic framework that is seeing farms and banks do OK—banks do more than OK—but is seeing industry high-tech and manufacturing sliding to what looks like an eventual demise. In the meantime we are exploiting mineral and petroleum resources through foreign-owned multinationals through which we claim too little in royalties and through which we will lose control of our underlying resources. The Government is failing to provide appropriate market signals to State-owned enterprises like Hillside railway workshops in Dunedin and is instead dressing them for sale. The Government is running a 20th century monetary policy framework during a 21st century global financial crisis and wondering why our exchange rate and interest rates are too high and our current account deficit is overtaking that of Greece to become the worst in the developed world. 
These are not accidental consequences. These are the logical the predictable the necessary and the scientifically proven results of a fundamentally flawed economic framework. What do we get? We get high unemployment a world record current account deficit and manufacturing and high-tech in crisis. “What to do?” says the Government. “How will we dress this up?” says the spin doctor. Well National is too locked into its low-tech dumb-development strategy to change that. Its political constituencies and its own rhetoric will not allow it to make that change and what it desperately wants to avoid is for the public to get the idea that to change the strategy they first have to change the Government—to change the strategy they change the Government. 
This side of the House will rise to that historic responsibility because that side of the House not only will not but cannot. So it came up with the following plan. In Budget 2012 it would cut Vote Economic Development by something like $130 million and it would reinvest about one-third of it in the Advanced Technology Institute and it would have the Advanced Technology Institute Bill which it would then trumpet as the solution to the decline of high-tech. 
Well I am a former director of Industrial Research Ltd the current name of that body before the Government invokes the name of the late and great Sir Paul Callaghan and a director of the current body said to me: “The bill is flawed.” Why? “Because companies” he said “are best placed to understand their own technology needs. What they need is more support around finance and marketing and internationalisation and this bill will not help the commercialisation process.” 
Scott Simpson 
: Nothing to do with a whiff of personal interest? 
Hon DAVID CUNLIFFE 
: No personal interest in that—no personal interest in that. That is scraping the barrel Mr Simpson—scraping the barrel. So if a fig leaf is required that is this bill. 
Labour supports the bill. Might the public be surprised? Well I suppose a fig leaf is better than no leaf and throwing a few crumbs at manufacturing is about all this Government is capable of. We will take the crumbs and then when we are elected in 2 years’ time we will have a decent strategic framework and a proper policy mix as well. Then we will see unemployment come down. Then we will see exports go up. Then we will see hope in the eyes of young New Zealanders especially young science graduates. Then we will see a decline in the queues to the departure gates for Kiwis whose dream has faded whose future is fading and whose commitment to the current Government has gone. 
One thing that cheers me up is that the polls are not lying—this Government’s hold on New Zealand is weakening day by day week by week and month by month. The right track / wrong track has crossed over and the left bloc is ahead of the right bloc on most polls and change is coming. Change is coming—it just cannot come soon enough. It cannot come soon enough for the high-tech firms. It cannot come soon enough for the Dunedin manufacturing cluster. It cannot come soon enough for the 7.3 percent of New Zealanders on the unemployment scrap heap—oh they have gone quiet now. Where are the Weet-Bix now National backbench? Let me say it again—7.3 percent. Budget 2011 said it would be 5 percent by now but it went up not down. It did not go from 6.7 percent to 6.6 percent; it went up from 6.7 percent to 7.3 percent. 
It is a catastrophe and it is a predictable catastrophe. It is the logical outgrowth of a flawed strategic framework and policies that are not worth the paper the glossies are written on. And Steven Joyce fiddles while Rome burns. Steven Joyce’s main claim to fame is pumping out glossy papers to repeat projects that were done in yesteryear and now there is this fig leaf for the science community. 
What the science community is saying to the Labour Opposition is: “Get a real plan guys. Sure we will take ATI that is fine but get a real plan.” New Zealand’s future does not lie in chopping down and exporting raw logs. It does not lie just in milking more cows. Sir Paul Callaghan was a great man and his vision was from wool to Weta—from wool to digital technology. It was not subsidies for polluters and borrowing to pay for it. It was not locking in the industries of yesteryear with a flawed monetary policy and a flawed tax framework. Oh yeah we will take this bill but we want a whole lot more besides.