Mallard Trevor: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeMallard Trevor: Questions for Oral Answer — Questions to Ministers[Sitting date: 07 August 2013. Volume:692;Page:12440. Text is incorporated into the Bound Volume.]11.Hon TREVOR MALLARD (Labour—Hutt South)to theMinister of Science and Innovation: What decisions if any have been made by Callaghan Innovation with regard to overseas contracting by KiwiStar Optics and why have those decisions been made?Hon STEVEN JOYCE (Minister of Science and Innovation):I am advised that Callaghan Innovation has decided not to enter into a proposed subcontract with the Australian Astronomical Observatory for two reasons: firstly because the contract involved was for a fixed fee and is considered high risk; and secondly Callaghan Innovation is itself considering the future options for ownership of KiwiStar Optics at this time. It is not in its long-term plan to own New Zealand businesses and I know that Industrial Research Ltd itself also quit a number of companies. Callaghan’s plan is to work with all Kiwi firms and help accelerate the commercialisation of innovation of those firms.Hon Trevor Mallard: Does he agree with that decision of Callaghan Innovation to veto a contract worth $2.4 million to produce hi-tech lenses for the AustralianAstronomical Observatory with the resulting loss of two $1.8 million contracts with Caltech and Berkeley?Hon STEVEN JOYCE: I think the member is well ahead of himself there. Firstly there are two things. One I do not think it is right for politicians to be offering opinions on what any organisation Crown entity or company does in terms of whether they should enter into a contract. They have to be in the position to judge the risks as to whether they should proceed. That is why those entities exist. In relation to this one my understanding is that discussions are ongoing with the Australian Astronomical Observatory and so there are a number of things that could yet transpire. I do not think we are in a position to say what the member has said about the effects on the other contracts.Hon Trevor Mallard: Does he regard the manufacturing of multimillion-dollar telescope lenses as the type of work that should be abandoned to be done in Australia with the staff transferring the scientific knowledge transferring and the contacts transferring as is now being proposed?Hon STEVEN JOYCE: Again I think Mr Mallard is putting a particular perspective on it. The reality is that Callaghan Innovation is looking at any number of possibilities for the future of KiwiStar Optics.David Shearer: Rubbish.Hon STEVEN JOYCE: It is clearly at this point.Hon Trevor Mallard: None of them in the country.Hon STEVEN JOYCE: No they are in the country. In terms of what you talk about in terms of lucrative high-value work in this particular instance it is a very high-risk fixed-price contract which may not be in its best interests—and indeed that is what Callaghan Innovation has determined—to enter into.Dr Megan Woods: Does the Minister consider Callaghan Innovation’s decision to not sign the $2.4 million contract between the Australian Astronomical Observatory and KiwiStar Optics to be consistent with his view that Callaghan Innovation is to become the high-tech HQ for New Zealand businesses and that it will assist firms across New Zealand to turn their ideas into exportable products and services more quickly providing jobs and growth for New Zealanders?Hon STEVEN JOYCE: I thank that member for that advertisement. I do consider that it is consistent with Callaghan Innovation’s mandate which is to be a high-tech HQ for Kiwi businesses. It does not mean that it should own all those businesses. It means that it should work with New Zealand businesses up and down the country and that is what it is designed to do.Dr Megan Woods: Does the Minister agree with former KiwiStar Optics optical scientist Andrew Rakich who is currently working for the European Southern Observatory that if KiwiStar Optics no longer fits with the mission of Callaghan Innovation then Callaghan Innovation should divest itself of KiwiStar Optics in a way that ensures its ability to continue to succeed as a stand-alone business entity rather than the ad hoc and rushed cancellation of the contract as has occurred?Hon STEVEN JOYCE: The member raises some fair questions in that regard. I will make three points in response. I understand the gentleman concerned actually does have a relationship with this organisation still and also some sort of financial relationship with the organisation. That may have an impact on his views. The second point in relation to that is that it is absolutely appropriate as I have made clear to Callaghan Innovation all the way through that if it is considering change it do its absolute best to as he suggests put them into private ownership or perhaps in a couple of cases attach to universities and so on and it is exploring all those options.Dr Megan Woods: I seek leave to table a letter from Dr Andrew Rakich to Mary Quin of Callaghan Innovation where he states that in his opinion KiwiStar Optics has the potential to compete on the global market with global companies and the combination of expertise built up over seven decades—Mr SPEAKER: Leave is sought to table that particular document. Is there any objection? There is objection.Hon Trevor Mallard: Was there?Mr SPEAKER: There was objection.Hon Trevor Mallard: What action is the Minister prepared to take to ensure that the scientists and technicians currently employed and linking with organisations in India Australia two in the United States and Europe do not transfer to Australia?Hon STEVEN JOYCE: Well I will not be stopping them at the border if that is the member’s suggestion. I have made it clear as I said in the answer to a previous question to the board and management that they should do everything and their best—and they will do—to ensure that any change actually does its absolute best to retain the expertise in this country. But as the member’s colleague herself noted the reality is that actually this is an international discipline. The gentleman who has raised the issue who has a financial interest in the outcome of these contracts who does—David Shearer: Oh come on.Hon STEVEN JOYCE: Well it is important that we note these things. The gentleman who has raised this issue is himself working in Amsterdam right now on a contract over there.Hon Trevor Mallard: I raise a point of order Mr Speaker. I think members have been cautioned about making what are effectively defamatory statements about people. I want to make it clear that the person who raised the matter with me does not live in Amsterdam.Mr SPEAKER: OK. The member has made that point through a point of order. I am not sure that it was a valid point of order but the point has been made.