Parker David: Advanced Technology Institute Bill — In Committee 
Text is incorporated into the Bound Volume 
Parker David: Advanced Technology Institute Bill — In Committee 
[Sitting date: 27 November 2012. Volume:686;Page:6842. Text is incorporated into the Bound Volume.] 
Hon DAVID PARKER (Labour) 
: 
 I rise to take a call on Part 1. Part 1 in clause 3 establishes the Callaghan Innovation centre as it is now going to be called and provides for it to meet its main objectives and functions which actually are not contained in clause 3. To make sense of clause 3 you have to refer to the main objective functions and operating principles of the Callaghan Innovation organisation which are referred to in clauses 12 and 13. There they are listed but still in very general terms. Clause 12 states that the organisation’s “main objective is to support science and technology-based innovation and its commercialisation by businesses primarily in the manufacturing sector and services sector in order to improve their growth and competitiveness.” Then its functions are listed over about two pages. 
One of the points that was made by a submitter to the Education and Science Committee which is referred to in the minority report from the Labour Party members of the select committee was that if the objective of the Government is to improve our performance in the world by transforming more products into high-value goods—also services but in particular goods—overseas then the settings in the economy need to be right to facilitate that. They made the point that the macro policy issues which are not addressed in this purposes section of the bill are fundamentally important. Those listed in the minority report as a consequence of submissions to the select committee are the settings that get the money going into the right part of the economy. We have a tax system in New Zealand that is rare by developed country standards. It has a bias for certain classes of investment that do not grow our productive output overseas and have the effect of distorting investment into the parts of the economy that do not grow our exports—namely into land-based activities rather than into productive manufacturing adding of value. If the Government was serious about growing the innovative enterprises in our country it would be addressing those macroeconomic issues that only a Government can fix because businesses cannot fix them for themselves. I would reinforce that point that these purposes that are being established here are not met by the bill because these gaping problems in the economic structure of our country refuse to be addressed by this Government. 
The other macro setting that was referred to by submitters was the fact that under New Zealand’s Reserve Bank policy at the moment—our monetary policy—we give priority to inflation targeting and the control of inflation over and above every other factor by law. We require that the control of inflation is given primacy above everything else and that includes factors like the currency. We have heard time and again from some of these high-value exporters that they are suffering as a consequence of the overvaluation of the New Zealand currency. Just about everyone agrees it is overvalued. The IMF recently said it was overvalued to the tune of about 15 percent. Since then it has gone higher and this legislation again does nothing to address that fundamental determinant of the competitiveness of our export sector—the overvaluation of our currency. So although the Labour Party believes that it is important to bring forward innovation and to grow the breadth of our exports which are too narrowly focused at the moment and although I certainly agree that our primary production sector is the most important sector of the New Zealand economy in terms of the value of our exports—that is most certainly true—another issue is also clear. It is clear that New Zealand cannot make it in the world on the back of that primary sector alone and therefore we need to grow the breadth of our exports by transforming more products into higher-value products that we can sell to the rest of the world so that we might for the first time in decades cover the cost of our imports and interest through the value of our exports. 
So the objectives of this bill to the extent that they are set out in this legislation are laudable. I do not think that anyone in this Parliament disagrees that we should be trying to help grow that sector of the economy that is not succeeding as well as it should at the moment by the conversion of more products into high-value products. The problem that we have with this legislation is that we are not really clear how the Government through this legislation achieves that purpose because the legislation does not articulate that in any clear way. 
 Some of the other concerns that were expressed by some of the submitters who did submit in the short period of time available were that they were not clear that this was necessarily going to result in additional effort in the New Zealand economy rather than replace existing effort through existing enterprises and institutions with the same effort being conducted through this new organisation. One of the challenges for this new organisation is that it truly does make sure that it is additive to what is already happening in the economy rather than just squeezing out what is happening elsewhere. We already do have some really good examples of innovative companies in New Zealand whether they are companies providing one product or companies that provide research and development expertise. There are some very good examples of that whether it is the Gallagher Group or whether it is Scott Technology—service providers to other companies that are bringing forward new products and bringing forward new manufacturing processes or products which aid in the growth of our export business. If a company like Scott Technology ends up finding itself competing against Callaghan Innovation then we are not necessarily going to be going forward. 
There was not much to be found in this Budget that increased the competitiveness of our export sector. The Advanced Technology Institute or as it is now to be called Callaghan Innovation was an exception to that general failing—from my point of view anyway—in the Budget and for that reason the Labour Party will be supporting it. 
I do want to return to the process point that Nikki Kaye addressed. I do not think there is any excuse for a 6-week submission period. How long has this been on the Order Paper since it came back from the select committee? I cannot really see from the paper that I am looking at when this was— 
Nikki Kaye 
: We had a reading immediately. 
Hon DAVID PARKER 
: What was that? 
Nikki Kaye 
: We had a reading immediately. 
Hon DAVID PARKER 
: Has it just come back in a few weeks ago? 
Nikki Kaye 
: Well no we’ve already had a reading. 
Hon DAVID PARKER 
: Right OK. Well I cannot see why there was a need to truncate the normal process as this has been and not allow submitters the time to actually think about the issues—to actually have the time to consider the issues and make a considered decision as to one whether they should submit and two if they were going to submit what they should say in their submission. 
You can never know what you do not know. Therefore we will never know what deficits would have been shown in this legislation and what further ideas would have been brought forward by people who had the normal period to submit. The normal period for the calling of submissions is 6 weeks. That enables people to consider take advice talk to their industry associations talk about it with other people who export and come to a view rather than just having to commit straight off the mark to a response which would be ill-considered. Most people do not like making ill-considered submissions and so faced with the choice of making an ill-considered submission or just letting it go past most people in the end choose not to submit. That is why we should protect the processes that we have at the select committee through the normal process. This is all the more important in a country like New Zealand. We have only one House of Parliament and therefore we are more reliant upon select committee processes to make sure that we do not make legislative mistakes than are other countries that have two Houses of Parliament. With those reservations I will take my seat noting that the Labour Party supports the bill.