Shearer David: State Sector Management Bill — Second Reading Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
Shearer David: State Sector Management Bill — Second Reading Instruction to Committee In Committee 
[Sitting date: 09 December 2010. Volume:669;Page:16258. Text is incorporated into the Bound Volume.] 
DAVID SHEARER (Labour—Mt Albert) 
: 
 Some of the early provisions of the State Sector Management Bill cut to the heart of what the bill is really about in terms of research science and technology issues. First I want to come to the aspect of the definitions contained in this bill. 
A number of submitters made some comment on that matter—in particular on clauses 7(1) and 7(2). One or two of the submitters wanted to try to put into the bill and to have much more fleshed out the definitions of what constitutes science research technological development innovation and benefit to New Zealand. They felt that the bill as it stood at that point did not go into that sufficiently. They wanted to see those terms expressed more fully explained and defined more fully in the legislation and I think there was some sympathy for that view. 
In particular the submitters cut to the definitions that are applied by the OECD in terms of science research and technology. Those definitions which are widely accepted as being the authority on research and development are the Frascati definitions. They define basic research as “experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts without any particular application or use in view.” In those terms basic research is what one would call the foundation work that we do in science. Applied research—and I quote from the Frascati definitions again—“is also original investigation undertaken in order to acquire new knowledge. It is however directed primarily towards a specific practical aim or objective.” We can see the difference between the two definitions. 
Our science in New Zealand obviously straddles both of those areas. We have fundamental research taking place particularly in our universities. The work of the Crown research institutes tends to be more of the applied nature although I have to say that even in those institutes a significant amount of good science is happening particularly in the basic earth sciences. But I think the feeling was that those definitions in a sense set the bill up so there was no problem in understanding what was being referred to in clauses 7(1) and (2). 
The applied and the more experimental research is somewhat different from those two areas. Again I will quote from the Frascati definitions: “Experimental development is systematic work drawing on existing knowledge gained from research and/or practical experience which is directed to producing new materials products or devices to installing new processes systems and services or to improving substantially those already produced or installed.” We can think of many many examples of that one of which is the development of the red kiwifruit. That is really a development of something that currently exists but the new knowledge and new science that was applied to kiwifruit enabled a new product to come about. 
In many ways that example cuts to the heart of what this bill looks to do which is to look for innovation in terms of our science research and technology. The bill tries to build on that aspect of what we do in our science and research institutions. That is where we get the greatest amount of economic benefit; the economic benefit comes from improving what already exists. There is nothing wrong with that. Obviously a lot of things come out of blue-sky science and we do some extremely good blue-sky research in our science institutions. But not much of it—or very little of it—actually goes on to produce real economic benefit. The core of the economic benefit comes from the area covered by the Frascati definition that I just read out which applies to experimental development that builds on and develops processes and aspects of our science system that are already in place. 
We discussed at some length in the Education and Science Committee whether it would be worth putting the Frascati definitions in the bill. I think we came to the basic conclusion that with regard to the use of the phrase “RS&T” in clauses 7(2)(e) and (f) although the Frascati definitions are good and comprehensive they are really already embodied inside that definition. They are embodied in the bill already. It is well known what they mean and they are well accepted throughout New Zealand so we thought it was probably unnecessary to draw that definition out any further. However we agreed to amend the phrase “RS&T’ used in clauses 7(2)(e) and (f) to read “research science or technology” but we did not change the definition of “RS&T funding” in clause 4. 
I come to the second issue raised by submitters on this part of this bill which was the phrase “the benefit of New Zealand” in clause 7(1). Again it was felt by some submitters that we should have that specifically brought into the bill and stated up front. The committee did not discuss that in great depth but we felt that the phrase “the benefit of New Zealand” is probably intended to have its ordinary natural meaning. In fact most of us would believe that it is pretty self-explanatory and that to expand it and try to define it would do the opposite to what the submitters wanted which was to make that definition clear. If we had defined it that might have made it much more restrictive in terms of the future interpretation of the legislation. So we left that particular part of the definition “the benefit of New Zealand” in place. 
In conclusion I think this particular issue of the definitions is really important as we are moving towards a bill that in a sense develops a new title of research and innovation and that was well discussed. I think we have now started off this new legislation with a full understanding of exactly what the various definitions mean. We are clear about that and it is based in the commentary on the bill. I will leave it at that. Thank you.