Donnelly Brian: Debate on Crown Entities Public Organisations and  State Enterprises — In Committee 
Donnelly Brian: Debate on Crown Entities Public Organisations and  State Enterprises — In Committee 
[Volume:638;Page:8804] 
Hon BRIAN DONNELLY (NZ First) 
: 
 Thank you for that accommodation but with the Crown research institutes there are lessons to be learnt from the reviews of each and every one of them and just to speak to one is in fact very limiting.  
But I rise in fact first and foremost to make a confession. Because last year in this debate when I— 
Hon David Carter 
: The Catholic coming out! 
Hon BRIAN DONNELLY 
: Mea culpa mea culpa. I actually made this brilliant speech about two Crown research institutes and their financial reviews from in fact the year before prior to the one we were supposed to be debating. To the credit of the Minister without the blink of an eyelid he just got up and responded to my speech as if I was making it in the right year. The only person in the Chamber who actually knew that I had made this blunder was Katherine Rich and bless her heart she never brought it to the attention of the Committee. But in this particular case I am going to be talking about the Crown research institute review from the particular year that we are supposed to be debating.  
First and foremost I want to range across a number of them and some of the lessons learnt from each of them. The National Institute of Water and Atmospheric Research is the first I want to touch upon noting that in fact the institute paid a dividend to the Government and this is something that we have to recognise with Crown research institutes. It paid a dividend of $13 million to the Crown so its work assisted all areas of New Zealand through that financial contribution.  
During the previous financial review of the National Institute of Water and Atmospheric Research before the Education and Science Committee 3 or 4 years ago concern was expressed about the continued viability of the research vessel  
Tangaroa 
. The vessel had just completed a major oceanographic study of New Zealand’s continental shelf out as far as Lord Howe Island and expanded our knowledge extensively particularly with the finding of a considerable number of previously unknown species of flora and fauna. However at the time of that review the National Institute of Water and Atmospheric Research had no decent contracts for which it could employ the specialities of the  
Tangaroa 
 and hence concern was expressed that it may have to be sold. It is therefore to the credit of the institute that in the financial year under review contracts were gained that kept the  
Tangaroa 
 and in fact one other vessel at sea for a total of 562 days covering 1000399 nautical miles and I want that particular achievement to be noted.  
I also want noted the potential conflict between the Meteorological Service and the National Institute of Water and Atmospheric Research but it is good in fact to hear that confidential mediation is going on to ensure that they stick to their knitting and that taxpayers’ money is not being used for duplication of roles.  
The next Crown research institute I want to refer to is the Horticulture and Food Research Institute of New Zealand. That institute certainly has had a difficult and chequered past. In 2002 it lost $5 million of Government research investment which led to 40 redundancies the subsequent loss of scientific capability and financial losses for 2 years. The institute has had to work hard to get back on its feet. In particular it is noted that HortResearch won the HR Initiative of the Year award for its great leadership programme. Staff turnover is in fact relatively low at this particular time and that is necessary for the continued growth of this Crown research institute.  
However two critical points came out of that review. We were told that an alarming figure of 30 percent of key scientific time at HortResearch is taken up in bidding for funds. We have just had a lecture by Professor Peter Gluckman who once again said that we have not got the balance right between contestability and competitiveness and the ability to enable our scientists to focus upon the science that they need to develop. 
 The second issue concerns the cumbersome procedures dealing with post-entry requirements for research on organic material from outside New Zealand. Once again it is worthwhile noting that HortResearch the Environmental Risk Management Authority and the Ministry of Agriculture and Forestry are in fact working together to develop protocols that will simplify this complicated process. 
Industrial Research Ltd usually referred to as IRL is another Crown research institute that has had to face significant financial challenges largely through going it alone in selectively risky commercial ventures in areas where it was hard to attract investment partners particularly from within New Zealand. Realistically Industrial Research Ltd has only 100 to 150 potentially joint-venture partners that are commercially viable. The select committee has noted the strengthened financial performance of Industrial Research Ltd and improved internal financial discipline. It also noted that eight out of 12 of the Foundation for Research Science and Technology contracts that have been “on watch” as it is said have now been removed from that status. The lesson to be learnt from the experience of Industrial Research Ltd is that Crown research institutes need to be realistic in setting up their projected revenues.