Advanced Technology Institute Bill — Second Reading 
Text is incorporated into the Bound Volume 
Advanced Technology Institute Bill — Second Reading 
[Sitting date: 08 November 2012. Volume:685;Page:6469. Text is incorporated into the Bound Volume.] 
Advanced Technology Institute Bill 
Second Reading 
Hon DAVID CARTER (Minister for Primary Industries) 
 on behalf of the Minister of Science and Innovation: I move  
That the Advanced Technology Institute Bill be now read a second time 
. The bill establishes a new Crown entity the Advanced Technology Institute—also known as ATI—a new high-tech HQ to support innovative New Zealand businesses primarily in the manufacturing and services sector. The purpose of the Advanced Technology Institute is simple: to help get New Zealand’s best ideas out of the lab and into the market place more quickly. Kiwis are great at coming up with smart ideas but we need to become more successful at translating those ideas more quickly into commercially successful products. The Advanced Technology Institute will help increase the number of research and development - capable firms lift New Zealand’s exports of high-value manufactured goods and services and support the Government’s aspirations around economic growth. It will focus on industries with high-growth potential such as the food and beverage manufacturing sectors the agritechnology sectors digital technologies health technology therapeutics and high-value wood products. 
When the Advanced Technology Institute Bill was referred to the Education and Science Committee the House requested that it be reported back by 6 November in order for the Advanced Technology Institute to be up and running in early 2013. The committee in fact reported back on 23 October and I am grateful to the chair and the members for their prompt consideration of this legislation. Submissions on the bill were highly supportive of the Government’s ambitions for the Advanced Technology Institute. Useful information was provided on how submitters saw the Advanced Technology Institute operating within the research and development sector and how it could operate to minimise perceived negative effects. The Government shares the views of many submitters that collaboration will be the key to the success of the Advanced Technology Institute. No single institution can expect to maintain all of the research capability required to service the manufacturing and services sector. To succeed therefore the Advanced Technology Institute must work with Crown research institutes with the universities and polytechs and with other research providers to develop partnerships that maximise commercialisation opportunities and to ensure that businesses better utilise existing research and development capabilities. 
To underline the importance of those objectives the bill’s operating principles mandating collaboration have been strengthened. I am aware that the committee heard a number of submissions regarding the nature and the extent of the Advanced Technology Institute’s in-house research capability. It was always intended that the Advanced Technology Institute would look to harness capability that exists across all research institutions and that it would not seek to unnecessarily duplicate expertise elsewhere. That said Industrial Research Ltd currently undertakes a significant research and development programme and it will become part of the Advanced Technology Institute upon its establishment. The Advanced Technology Institute board will decide the mix of resources and capability it requires to deliver its functions and this will naturally evolve over time. The bill simply provides the Advanced Technology Institute with the function of undertaking research and development. It is not prescriptive as to the extent or form. 
A number of submitters requested that membership of the board of the Advanced Technology Institute or the stakeholder advisory group be prescribed to those with characteristics such as geographical or professional representation institutional type or unions. The board’s appointment is governed by the Cabinet circular outlining the process for increasing diversity of board membership while the Minister must consult with the board before establishing the advisory group providing the means to identify specialist areas of assistance. The potential area of conflict of the institute being both a funder of business research and development grants and a research and development provider has always been recognised. This bill requires that systems and procedures are put in place to ensure that the Advanced Technology Institute acts fairly and transparently in allocating and administering research and development funding. I am confident those systems and procedures will be robust and will withstand scrutiny. The Advanced Technology Institute must also report on its implementation in its annual report as must the Auditor-General as part of the annual financial audit process. 
The Advanced Technology Institute which is to be named after the late Sir Paul Callaghan forms part of this Government’s commitment to promoting science and innovation in New Zealand through the Business Growth Agenda. In recent months we have announced a number of initiatives to improve linkages between science business and innovation. These include making improvements to business incubator settings assessing whether the tax treatment is discouraging firms from research and development expenditure promoting co-funding to encourage business innovation improving the economic contribution of both universities and polytechnics better monitoring of public science investment and incentivising public research institutions. Increasing business innovation is key to growing the economy. It is key to creating jobs and key to raising the living standards of all New Zealanders. This Government has set the goal of raising the amount businesses spend on research and development from where it is currently at 0.45 percent to 1 percent of GDP. 
The success of the Advanced Technology Institute will be measured in many ways but one of the most important will be how much it helps manufacturing and services firms to innovate to increase productivity to grow exports and to operate more efficiently. The Advanced Technology Institute Bill strikes a balance between being flexible enough for the Advanced Technology Institute to determine which services and activities will best support firms in the manufacturing and services sector to innovate and to commercialise their products while also being clear about the institute’s purpose the scope of its functions and the operating principles by which it is expected to abide. The Advanced Technology Institute will help ensure that innovative Kiwi firms have access to the necessary skills facilities infrastructure and new technologies that they need to lift their competitiveness and in turn boost New Zealand’s economic growth. I commend this bill to the House. 
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. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to speak on the Advanced Technology Institute Bill. Can I start by acknowledging the late Sir Paul Callaghan. He was a great man he did have great vision for New Zealand and this legislation is actually about delivering on that vision. But firstly can I take just a moment to comment on the wider economic agenda and the theatrics that we just had from—I believe it was David Cunliffe but I think it is interesting that he is filling in for the actual research and innovations spokesperson who has been very quiet on this bill the leader of the Labour Party David Shearer. Perhaps this is a very ominous sign. Perhaps this actually— 
Scott Simpson 
: Ian Shearer? 
NIKKI KAYE 
: My colleague says “Ian Shearer”. Perhaps the real truth is that we just heard the leadership speech of the Labour Party from David Cunliffe. But can I say that everything that we just heard from David Cunliffe is rhetoric. Whenever it comes to many economic initiatives—and we heard about Weta—when it comes to  
The Hobbit 
 films do those members support these initiatives? No they vote them down. When it comes to greater intensification they vote it down. When it comes to mineral exploration they vote it down. 
What has been very interesting through this legislative process is to see a very clear comparison between the parties. We are a party that is supporting a framework to enable businesses to get more ideas to market quicker. This bill was supported by a range of parties across the House but the key thing is—and we saw it in the Labour Party minority report—those members talk the talk but when it comes to the actual detail we see them looking after their mates. We saw this with their advocating for union seats on the Advanced Technology Institute Bill. That is extraordinary. Their major economic solution for New Zealand is to hold up our commercialisation vehicle with union seats. 
It was a very collaborative process for this bill and there were many great changes as a result of the Education and Science Committee’s consideration. But can I say that when it came to the crunch when we saw Labour’s true colours in the minority report we saw a party that is outdated and back in the 1990s. We saw a party that is absolutely beholden to the unions. We saw a party that is committed to legislating for everything. 
What I am confident of is that whether it is the fact that we have increased science funding by 17 percent whether it is the fact that we have made major investments in infrastructure or whether it is the fact that we are delivering a crucial piece of legislation that is going to ensure that we have greater collaboration between our scientists and our businesses we are actually delivering. We have a plan and we are investing in that plan by 17 percent additional science funding. 
If you compare that with the Labour members they are very clear that they want to legislate for their union mates and that they want to stop everything else from happening in other areas of our economy whether it is mineral exploration intensification in terms of farming or labour laws—all of these things that add up to having a much more flexible economic agenda that is actually focused on growth and jobs. I think we need to mention that because we constantly hear the rhetoric but we do not see the detail that will actually take New Zealand forward. 
We had a range of submissions on this bill that were incredibly supportive. I think there were 23 submissions—seven oral submissions. I also acknowledge that in terms of the changes made to the bill we strengthened the clauses around collaboration and I want to thank Kiwinet for its submissions on that. I also want to acknowledge other members of the committee such as Tracey Martin David Clendon Megan Woods and other members of the Labour Party. I think it was an incredibly collaborative process. Under very tight time frames we achieved a lot in making some very valuable changes to this bill whether it was the collaboration clauses or whether it was ensuring there was consultation with the wider sector. 
I think this is a very good piece of legislation. It is part of our wider economic agenda which involves not only greater investment in science which we have delivered on and not only ensuring that we have very good economic policy in terms of our labour laws but also ensuring that we have greater collaboration via vehicles like this. The sum of $166 million is an extraordinary amount to ensure that we have high-tech centres right across New Zealand particularly in Auckland and in Canterbury. I am very confident that through the select committee process we have delivered a vehicle that will be crucial in delivering on Sir Paul Callaghan’s vision of ensuring that more businesses are able to take their ideas to market. 
I want to comment on a couple of key clauses such as the net benefit clause. I think that was a very positive change. We recognised that we wanted to have a similar test to the Crown research institutes so we changed that from “net benefit” to “benefit”. As I said before we made a key change around the collaboration to ensure that the Advanced Technology Institute would not be replicating current and existing funding structures. Another key point that was made throughout a number of submissions was the issue of the research framework and its capability. We were quite clear on this side of the House that we do not think it is appropriate to be legislating for that detail because things do change in a rapidly changing environment in terms of technology. Also if a country wants to be flexible about where it spends its money and where its economic agenda is we do not want to tie up the institute by being overly prescriptive. Finally a number of other points were mentioned in the speech of the Minister for Primary Industries around the need not to necessarily prescribe the detail around stakeholders—the stakeholder advisory board. I think that was the right thing to do because as has been mentioned in Cabinet circulars there are a number of provisions around ensuring there is greater geographical representation. 
I am very pleased to commend this bill to the House. I think it will be a key vehicle for greater commercialisation taking more New Zealand businesses’ ideas to market. I think it has been a very collaborative process across the House. I think it was done under difficult time frames but that we mitigated that by ensuring that we wrote to a range of submitters. It was very pleasing that only a couple of submissions were opposed to the bill. It is important to note that this is part of our wider Government economic agenda which includes greater investment in science real policies around infrastructure investment and good policies around labour laws. The Opposition has raised what I think are very overly prescriptive policies in terms of this bill as part of its philosophical vision for New Zealand which is to tie the country up and oppose everything. I am very pleased to commend this bill to the House. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am very happy to take a call on the Advanced Technology Institute Bill and to deal with some of what we have heard in the House this afternoon because it is simply astounding that members opposite can think that this legislation is going to deliver on the vision of Sir Paul Callaghan. It is just astounding. This is a woeful piece of legislation that needed strengthening and it is a missed opportunity. Labour is supporting this legislation. It is supporting it in a very lukewarm way. We firmly believe that this is an opportunity lost. We are very disappointed that members opposite have failed to take the opportunity that setting up something like the Advanced Technology Institute could have afforded us. I think it speaks volumes that the chair of the Education and Science Committee Nikki Kaye who saw this legislation through used 3 or 4 minutes of her speech on this piece of legislation to take low blows and cheap shots instead of addressing the substance and some very real concerns that have been raised in this legislation. 
We on this side of the House are fearful that this is yet another grand scheme from a Government that talks big on science and innovation but has failed to deliver a game-changer. We are fearful because of its track record. We have real reason to be fearful here. There is nothing in this legislation that addresses the structural flaws for the manufacturing sector. It is with some irony that we are standing here today discussing and debating a bill that is around more innovation for our high-value manufacturing sector on a day when we have had unemployment figures out that show the manufacturing sector is continuing to bleed jobs. This is what this bill is about. It is about strengthening this sector and it is about the creation of high-value jobs and highly skilled jobs and this bill will fail to do that. 
There are some worrying echoes of other initiatives that this Government has tried. We can just look to its voucher scheme which has been a complete and utter flop. This was talked big in Budget 2010. There was going to be $20 million over 4 years to high-value manufacturing firms with co-investment for projects of over $100000. Well what has happened? It has failed to spend this money because it has no understanding of what is required for innovation in New Zealand. What have we got in 2012? Well less than $4 million has been granted in 2 years and only one in three of these projects has been over $100000. It has had to expand this into the agritech sector away from concentrating just on the high-value manufacturing sector and it has had to take the co-funding option down to $30000. There are some very worrying parallels with what has happened with the passage of this Advanced Technology Institute idea since it was born. 
So what we had from the chair of the select committee Nikki Kaye was her saying that there were some very clear comparisons that emerged in the deliberations over this legislation at the select committee. Well I agree completely with her. There were some very clear comparisons that emerged between the Government and the Opposition side of the table. What emerged from the Government side of the table was a failure to understand what 21st century innovation looks like in New Zealand and what it will take to truly transform our economy. We have heard a whole lot of hysterical shrieking that we want to look after our union mates by daring to suggest that maybe workers might have some input into innovative processes. 
I actually want to take you through what Labour suggested in terms of the stakeholder advisory panel. Labour said it would be really good if we had good industry input into what was happening in the high-value manufacturing sector. We noted that there were very few submissions from industry because of a rushed process which I will come back to later. But we thought about the people who were investing their money setting up the businesses—we want to have their voice heard. We want them on the stakeholder advisory panel and we would quite like the other providers of research science and technology innovation there as well as the universities and the Crown research institutes. We would like their voice heard. And then what about the people who actually perform the innovation? What about the people who work as scientists the people who work as technicians and the people who work in the manufacturing firms on the shop floor and on the lines? These people have got a pretty good idea about what innovation takes and how it is that we can transform this. Because you know what? This is what happens all over the world. 
If members opposite knew anything about what 21st century innovation looks like and how other countries are doing it and succeeding they would get past their hysterical shrieking. We need only look at one of the most effective lobby groups in science in this country the Public Service Association science committee which is made up of some of the top scientists in this country. But no they are members of unions! You certainly could not have them inputting into anything! Members opposite need to take off their blinkers and realise what it will take to transform our manufacturing industries in New Zealand. Hearing from everybody with some stake in the game is something that we are fully supportive of.  
We also thought it would be a really good idea to ensure that there would be some regional representation on this stakeholder advisory panel. We thought that it would be really good if the areas where the economic development potential resided and existed were represented so that we could get a broad view of what innovation in this sector in New Zealand might look like. But no we could not have anything like that! Labour will be putting up a number of amendments that address these representation issues. We will be putting up a number of amendments for this bill because actually we want to see this succeed. 
What we are really disappointed by is the fact that this Government simply does not understand what it is going to take. For us innovation is a means to an end. It is about good regional and economic development that will create jobs and higher-paying jobs which is clearly something that this Government does not turn its mind to when we look at the employment figures that came out today. Actually jobs do not happen by magic. They take a Government that is willing to take an interest and a Government that is willing to invest. We think that the Advanced Technology Institute could actually afford us such an opportunity but this is a Government that is not willing to even countenance that we may have a look at that. 
What we believe is that innovation in New Zealand needs to be an interconnected and joined-up process and that we need to have industry we need to have the science providers and we need to understand what it takes to commercialise. We have a number of concerns with this bill and not only about the representation. We have a worry that the Advanced Technology Institute is going to succeed or fail on its ability to be part of this interconnected and joined-up group of people. It is going to rise and fall on its ability to be an active player. The way that this Government is setting this institute up is ensuring and is embedding—through this very permissive enabling legislation—that it is going to be seen as a competitor to be feared. 
Members on the Government side of the House will not even countenance that we put in some protections to make sure that it is seen as an organisation that does not unnecessarily replicate and duplicate functions that are already successfully being carried out. They simply would not countenance that we would put those protections in place. Nor would they even agree to the fact that the idea that this new organisation is both a funder and a provider might create a little bit of suspicion amongst other people with whom it is going to have to go out there and form very strong collaborations. It is its ability to collaborate and its ability to work not only with industry but with other providers that will make this an institute that will succeed or fail. 
Labour also sees the Advanced Technology Institute as something that needs to be part of a wider economic development strategy. Labour thinks that the Advanced Technology Institute cannot succeed unless it also has a research and development tax credit sitting alongside it. We heard from one submitter the Manufacturers and Exporters Association—in fact one of the few industry submissions that we received—that it saw that the tax credit was a fundamental thing that needed to be addressed for manufacturing to succeed in this country. We also heard from the Manufacturers and Exporters Association that one of the biggest impediments to it being able to innovate to it being able to hire and to it being able to grow was the volatility of the New Zealand dollar and that it was about time that we had a Government that was willing to address the macroeconomic issues that were undermining the manufacturing sector’s ability to get on to succeed in this country. 
The Advanced Technology Institute cannot exist in isolation. I hope members opposite will consider at future readings the amendments that Labour put up because we want to see this succeed but we are fearful that in its present form it will not. Thank you. 
DAVID CLENDON (Green) 
: 
 We had our first sight of this Advanced Technology Institute Bill on 10 September this year—not last. Three days later we had our first reading and in those 3 days we looked at the bill—as much as you can in a few days—and frankly we saw no harm in it. We saw no massive benefit nor did we see a great deal of harm. We thought there was a possibility that this proposed new entity might do some good and so we supported the bill through to the Education and Science Committee. 
We entirely agree that it is important that we seek to maintain and increase the strength of the direct links between science and research and actual commercial activity. We are very much in favour of a cleantech greentech economy. That is the way of the 21st century unlike some of the Government’s policies which are leaping backward into the early 19th century. We see that this is an important and necessary thing to do—to increase our output in the high-tech sector. 
The question that has since come to us in terms of the proposal to establish this Advanced Technology Institute is quite a simple question. It is simply to ask why. What is actually the need for such an organisation? What gap does it fill? What is the necessity for an entirely new entity a new structure rather than working within existing structures and existing sets of relationships perhaps enhancing those and making them work a little differently or better? What is so wrong with Industrial Research the institute that to date is effectively doing what this new entity is supposed to do? If one has a look at the statement of intent for the current year to June 2013 the objectives the strategic goals of our Industrial Research are fundamentally the same as what is proposed for this new Advanced Technology Institute this new organisation. 
I must say that it seems that this Government seems to have a very peculiar relationship with the public sector. And I must say in passing that I was equally surprised and somewhat amused by the chair of the committee Nikki Kaye launching into the Labour Party for daring to suggest that the unions might be represented on the board of this entity. The representatives of the scientists the technicians the tradespeople who actually design and make stuff—how dare Labour propose that they should be represented on a body that will make key decisions about linking the science and the economic and social outcomes! 
More particularly this Government seems to have a perverse situation. It is putting the boot into the public sector. In the name of so-called efficiencies it is actually taking away the capacity of the public sector to do its job and yet when the Government perceives a problem it tends to create a new entity a new public sector entity. It did it with the Productivity Commission. Acknowledging that we have a very low productivity economy the Government said “Let’s create a public entity to try to solve it.” which to date has clearly failed to address even the key issues let alone resolve them. Similarly with this bill we have an issue about not getting enough high-tech high-value manufacturing so let us create a new public organisation a new bureaucracy. Perhaps that will do the trick. It is a very peculiar response from a Government that alleges that it represents the private sector rather than the public sector. 
We received submissions on the Advanced Technology Institute proposal on the bill. There were not that many of them and clearly they were written in haste because submitters were given really only days never mind weeks to come up with and prepare them. Nevertheless they were of very good quality. They were from some very significant commentators some important players in the sector and they all offered—with one or two notable exceptions—very qualified support and I do stress the word “qualified”. Everybody agrees as the Greens did at the first reading that an entity some sort of a networking organisation that can bring together our science and research capacity with our good business brains and our good business organisations is a good thing. But the qualifications came through and they tended to follow themes—common issues that came through again and again from the various submitters. These included the likelihood that this new organisation would duplicate and even disrupt existing successful and productive relationships and situations that already exist with the commercialisation arms of the universities and the members of the economic development agencies that have done some very solid and robust work over a number of years in this area. 
The committee did agree on prompting from particularly Labour and the Greens that clause 14 of the bill should include the word “collaborate” just to drive home the fact that this organisation the new Advanced Technology Institute should demand that we get a high level of collaboration rather than a more top-down hierarchical approach. That was a good step. It was a positive step and we supported that. It was a necessary step but it was not a sufficient one in terms of endeavouring to avoid the almost inevitability of duplication and disruption of what are currently well-functioning and very productive relationships. 
The world has not been sitting idly by waiting for this Government to create an entity that will bridge the gap if you like or will strengthen the relationships between research science and technology—that creative sector—and the business sector. Of course business done well is also a creative activity. Again as I say we absolutely support the principle of doing that but there has been a great deal of very good work done over a number of years. Nowhere in this bill—it is so loosely drafted; it is so poorly supported by argument—do we see any reassurance that the institute will not come in with size 11 boots and trample all over disrupt and set back a lot of those very positive relationships that already exist. One hopes that the Minister of Science and Innovation is even aware of them and that he has considered that but there is no evidence of that having happened. We asked the obvious question of the committee about what the nature would be of the relationships between the Advanced Technology Institute and these other incubators—the commercialisation arms and so on. The answer we got was that no decisions had yet been made about how those relationships will be maintained or held. What an entirely unhelpful response that was. 
The extent to which the Advanced Technology Institute would become a provider of science and therefore a competitor to the other organisations was also of concern to many of the submitters. Again I hope nobody will raise the imaginary objection of self-interest. These are senior respected scientists and commentators who are actually looking at what is good for this country—what is good in terms of achieving the proposed goals of this legislation. The dean of science at Auckland University gave the committee a supplementary submission. He was very concerned that the Advanced Technology Institute should function in predominantly a service role. He suggested that the research function should be a very minor component of the institute’s role and ideally should occur only through the transition period. He went on to say that the arguments that the Advanced Technology Institute requires a research capacity to fill the gaps that other institutions could not meet are not persuasive and are based on a limited understanding of research and the challenges of working with the high-value manufacturing sector. 
In regards to concerns about the Advanced Technology Institute being both a funding agency and a provider of research clause 13(1)(f) of the bill tells us simply that the Advanced Technology Institute will allocate and administer research science and technology funding. The very obvious and logical question for the select committee to ask was what funding? How much? How much control will it have over research funding in New Zealand? Again the response we got back from the Ministry of Business Innovation and Employment was that no decisions had been made regarding which funding the Advanced Technology Institute will administer because the ministry is currently reviewing the schemes. A report back to Cabinet is due on 30 November by which time this bill we expect will be done and dusted. We are being asked to support a pig in a poke. We do not know what the boundaries of this organisation will be. We do not know what its relationship will be with existing very positive initiatives. We do not know what funding it will control. We suspect that it will be a lot.  
The issue of funding would be less critical if this was an organisation with any autonomy. It is a Crown agent. It must give effect to Government policy. It has very little autonomy. This gives the Minister of the day licence to pick winners and picking winners was one of those activities that the late great Sir Paul Callaghan directly advised us to avoid like the plague. He was absolutely clear on that point. Governments are very bad at picking winners and the New Zealand Manufacturers and Exporters Association which has already been mentioned in its opposition to this organisation made it clear that picking winners has a dishonourable history of complete failure. It is very hard to argue with that.  
I have outlined some of the objections from submitters. I look forward to the Committee stage and the third reading when we will be able to engage a little more. For the moment on balance the Greens given all the flaws in this bill—we see that Labour is supporting it and we respect its decision; we were on a bit of a tightrope as well—cannot support an entity we know so little about when the legislation is so poorly drafted and where the intentions the operational functions the role and the powers of this entity are unknown. We will therefore not be supporting this legislation. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to take a call in the second reading of the Advanced Technology Institute Bill. In doing so I just want to cover off a couple of issues that other members have raised in their speeches. Effectively of interest is the submission from Business New Zealand where it quoted that it firmly advocates that the Advanced Technology Institute needs to have operational research and development capability in order to have credibility and skin in the game. That is a very relevant comment because when we look at it what the Advanced Technology Institute will be is a business-led market-focused research institute and it needs to be successful. 
There has always been a gap in the market and we have known for a long time that we do need a business-focused research institute. When you look at the genesis of this bill it came not only from a Government agenda of innovation and economic growth. One has only to research the situation the genesis came from and also the empowering innovation conference. One has only to read that document to understand how in sync with business this Government is. I just have to make that point because there is a history of a gap in the market and the Advanced Technology Institute is designed to fix this. 
There were those comments that were raised on the other side of the House of a lack of accountability. For goodness’ sake inside this bill it prescribes how that transparency will be brought to this House. The Auditor-General will annually audit the process. It will be very transparent. 
With regard to the argument from the other side of the House about the confusion and confliction between the funder/provider split this is part of the efficiency that we also saw when we brought together the New Zealand Transport Agency which was something Labour did. Some of the arguments that we are hearing are about a trip back to the 19th century. This is a bill that has its day in the 21st century. I have great pleasure in supporting the bill. 
TRACEY MARTIN (NZ First) 
: 
 Kia ora Mr Speaker. I stand to speak on the Advanced Technology Institute Bill. I would just like to remind the House that New Zealand First was actually the only party that opposed this bill at its first reading on the grounds that this work was already being done. I am pleased to stand here and say that we were right and we were proven right by just about every submitter who came to see us. We are very pleased with the work that the Education and Science Committee has done within very tight time frames. We would have liked to have more opportunity from the Government to really flesh this out and to have a greater input from the industry itself but the submissions we did get were valid they were in-depth and they were well-thought-out and I appreciated the level of expertise that was brought by the submitters to this topic in the very short time frame that we had. 
There was a lot of work done around the word “collaboration”—a lot of work done—and a lot of talk and discussion around the role of the Advanced Technology Institute and making sure that it did not duplicate that it did not compete with people currently doing the research work and currently inside this environment. However those submitters who were doing this work although they were very concerned that another competitor was not put into the contestable research funding market and that there was not a duplication of expense and a duplication of work done did acknowledge the need for an organisation that was aware of all the players in that area so that people could be connected. I think if I recall correctly one of the conversations we had at the select committee was that 80 percent of the Advanced Technology Institute’s role is actually going to be about connecting people. Eighty percent of the institute’s role will be about the relationship between business and the researchers and bringing those organisations together appropriately to take a product from a certain place and be able to commercialise it. 
I am going to take this opportunity however while the Hon David Carter is here to talk about the fact that there still is a bit of a gap here. I hope that the other 20 percent of the institute’s role that we have talked about—we do not know how much money will be dedicated or what budget line will be given to this 20 percent which is the research itself that the institute will be looking at undertaking because that information is not available to us yet. There is a bit of a concern I still have when I hear the Hon David Carter speaking and Colin King talking that we are still talking about widgets and gadgets that have been produced that this bill is just about looking at them figuring out a way to improve and going on to commercialising that market. I see Mr King shaking his head and that is a good thing. I am pleased to see that. We have now got that in the  
Hansard 
. That is great. 
For example on 30 October I was with the Taipei cultural and commerce office representative the consul-general of Japan and the deputy consul-general of Japan at the Mahurangi Technical Institute in Warkworth. It has taken eggs from eels. It can take 2 million eel eggs get 2 million live births and keep those eels alive for 12 days but it now needs $3 million to take those eels from 12 days to mass production. That market if we can get that investment from this Government—I do not know whether it is something the Advanced Technical Institute would be able to use part of that 20 percent to invest in—is not yet commercialised. Should that industry be commercialised should that investment be made it would be bigger than oyster farming and bigger than mussel farming. That is an industry that this country could really lift off on. 
But when we do not have an organisation that can invest in that way we leave those people vulnerable to having to sell their intellectual property overseas and that intellectual property goes overseas and it stays overseas. So I am hoping that part of what we are trying to create here is that the 20 percent that the institute will actually be using for research investment will be invested in those sorts of areas and will not—definitely not—be used to compete with other researchers and other business organisations that are working well but just need linkages. 
There was another point that New Zealand First tried to have—as mentioned in our minority report—and it was a very small thing. It was a single word. It was a single word that we were hoping to have inserted into clause 14(1)(b). Clause 14(1) reads: “In meeting its main objective and performing its functions ATI must—… (b) proactively engage and collaborate with businesses other RS&T providers and other persons that ATI considers relevant to the performance of its functions;”. All we asked for was the word “identify”. We asked for the word “identify” to be inserted after the word “proactively” and before the word “engage” so it would read “proactively identify engage and collaborate”. It may seem very small but the point of inserting that word was to ensure that one of the things the Advanced Technology Institute must do is first of all find out who is in the market so that it can then go and engage and collaborate. That word would take away the excuse should it enter into competition with anybody currently in the market that it did not know they were there. It is a very small thing but a very practical thing to make sure that people do know who is in that market that the institute does not enter into competition with people who are providing this service already. 
There is another little concern that I have. I voiced it at the time. It is around the FoodBowl of Auckland. The FoodBowl is going to be absorbed—that may not be the appropriate word. It is going to become part of the Advanced Technology Institute. The FoodBowl was partially funded by the ratepayers of Auckland and it is about to be absorbed. I would suggest that there is some compensation that needs to be paid to the ratepayers of Auckland for losing this asset. If the Government benches would like to know the amount of money that has been invested by the ratepayers of Auckland in the FoodBowl then they can contact my office and I will have that amount sent to them. 
We opposed this bill to start with. New Zealand First will now be supporting this bill. We support it because we have been listened to. The submitters have supported our original concerns around this bill. We believe that the work done by the select committee was adequate and strong for the time frame it was given. We will be watching the institute to see that it does not compete for contestable funding. We will be seeking support for the Mahurangi Technical Institute and the eel project and if there is anything extra there is a whitebait project there that could actually do with a bit of an input as well. Just in closing we would like to thank all members of the select committee for what was a collaborative process. We will be supporting this bill. 
SCOTT SIMPSON (National—Coromandel) 
: 
 It is a pleasure to rise in support of the second reading of this Advanced Technology Institute Bill. I would like to join with previous speakers in acknowledging how appropriate it is that the institute will be named after the late Sir Paul Callaghan. I think that naming the institute after such a distinguished New Zealander gives weight to the very appropriate benefits that the institute will provide for us as a nation. It is all about good ideas good initiatives and good inventions being collaborated with research and put together to get good products to market faster so that we can grow our economy and so that the real benefits for New Zealand will be constructively turned into something positive tangible and real. 
I too would like to acknowledge the good work of the Education and Science Committee. Under the very capable chairmanship of Nikki Kaye I thought the select committee worked diligently and promptly through a tight time frame. I want to particularly acknowledge the contribution of the previous New Zealand First speaker Tracey Martin. As she rightly said her party started off opposing this legislation but because of the collaborative approach and the sensible intelligent and dignified way that the committee conducted its affairs we were able to come to I think a very workable conclusion. So I think for me this process has helped demonstrate the very effective nature of the entire select committee process even when working under tight time constraints. I want to acknowledge that. 
There were a number of very good submissions. In fact the committee received 23 excellent submissions I thought. Seven submitters appeared before the committee and gave oral presentations. The vast majority of those were in favour of the bill. I think that when we heard the submissions we were able to get a real insight into the potential that exists in the marketplace for this collaboration of ideas wit and imagination when put together with research and the potential for great things that can come when those two are put together and come out at the other end of the exercise producing not just widgets but eels possibly whitebait and a whole range of other things. I am looking forward to the whitebait-tasting sessions. I am a person who has come from a business background. I now find myself as an MP finding as I trip around the very beautiful Coromandel electorate that not only do we have a wonderful environment but we have these remarkably innovative people who have terrifically good ideas. 
I think that the Advanced Technology Institute set-up and establishment will provide a terrific opportunity for those people to work with some really smart research development people and bring together terrific ideas. So I commend this bill to the House. I am looking forward to the Committee stage and to progressing it to its final conclusion. 
SUE MORONEY (Labour) 
: 
 I rise to support the second reading of the Advanced Technology Institute Bill but it is lukewarm support as you have already heard from Labour speakers before me because effectively unfortunately this is an opportunity gone begging. It is another example from this Government of too little too late—far too little far too late. Today we have heard the unwelcome news—the shocking news actually—that unemployment has increased again to 7.3 percent. The Government would have us believe that it has got a plan. Apparently we are hearing through this debate today there is an economic plan. Well if there is a plan it is not working. And when that was put to Bill English earlier this week he said that its economic plan is working. That is what he informed the House. Well that economic plan if it is working must be a plan to have high unemployment and low wages because that is in fact exactly what is happening in New Zealand and that is why we need a much better response than this bill from this Government. 
Although I guess it sounds like the Government is doing something—it is going to create a new Crown entity. That is what it is going to do. That is going to fix the problems in New Zealand! Go and create a new Crown entity. That is exactly what this bill is doing. There is high unemployment and low wages and what does the National Government do? It goes and establishes a new Crown entity. And in that new Crown entity the Government clearly has no interest in what workers have to contribute to the innovation of this country. During this debate it was very sad to hear the chair of the Education and Science Committee Nikki Kaye use her—oh she did not use even 10 minutes; I think she might have used 5 minutes because there is not too much to say about this bill. It does not do too much. She used most of that time to attack the Labour Party for daring to say that workers should have a say in this Crown entity and that workers have something to contribute to innovation. Has that Government learnt nothing from the Pike River mine disaster? Has it learnt nothing from the events of this week and the report that landed on its desk about the importance of involving workers in big decisions? Has it learnt nothing? Nikki Kaye used this debate to attack the Labour Party for insisting that workers do have a right to have something to say about their future and that workers do have something to contribute about innovation. They certainly have a lot more than that Government has to contribute to the discussion of innovation. If this is the best that the Government can come up with it is woefully—woefully—inadequate. 
I too want to acknowledge and honour the memory—honour the memory—of Sir Paul Callaghan but this bill does not honour his memory. This establishment of an Advanced Technology Institute falls woefully short—woefully short—of the sort of vision that Sir Paul Callaghan had for a proper investment in innovation in science. He had a vision of a high-wage economy not the low-wage economy that that Government is investing in and continuing to argue for in this House by saying that unions have no role in innovation. For goodness’ sake! Read the Pike River mine report. Understand the importance of working people and their contribution to the economy. Understand how important it is that we get it right for this country. We will not get it right if working people are not invested in and engaged in and part of that decision-making process. This bill demonstrates again how little faith—how little faith—the Government has in working people how little it values their contribution to the economy. It is another example of exactly that. 
I have a real concern about the process for this bill because it was entirely rushed. I can think only that the Minister of Science and Innovation did not have his act together with regards to this bill because suddenly without any notice to the Education and Science Committee—and this is a select committee I sit on—there was a bill put on us that apparently we had to deal with in a matter of weeks. This is supposed to be a large vision the new vision for this Government that is going to save the country and yet the Education and Science Committee had to deal with it in a matter of weeks. Blink and you would miss it the process for this bill. In fact in my instance go and hear a few submissions on paid parental leave and you miss it. I actually was not able to participate in hearing any of the submissions on this bill because it was so truncated—so truncated. If this is the thing that is going to turn round the New Zealand economy if this is the big hope that this Government is going to give those several thousand newly unemployed people in New Zealand whom we have learnt about today then it deserved to have more attention paid to it. It deserved to have a Minister who at least could get the bill in a form where it could be presented to the House for first reading so that a select committee could have a reasonable amount of time to actually deliberate on it. The select committee did not have adequate time to deliberate on it. It was not given due regard and if that rushed process is an example of how the National Party wants to honour one of our very finest scientists then I am afraid it does fall woefully short. I hope that I can be proven wrong and I hope that this Crown entity does live up to his vision but there is nothing in the bill that would convince me that that in fact will be the case. 
The Government does not want to address the really big issues when it comes to research and development. It will not—despite now overwhelming expert advice—consider returning the research and development tax credits that it slashed that this Government actually dumped. Research and development tax credits were warmly welcomed by business were warmly welcomed by the science fraternity as being a really significant way not like this bill that we could actually make a great deal of difference and improvement in the investment in research and development in this country. That is the type of very specific and detailed policy that would make a tangible difference to research and development and innovation in this country. Will the Government go near that? Will it even entertain the idea? Worse than not even entertaining the idea it got rid of it. 
When the Government got rid of that policy it got rid of a significant opportunity to improve this country’s record when it comes to research and development. Ever since it got rid of it it has been scrambling to try to find a replacement. As we have heard from a previous speaker the voucher system has not replaced it. That has been a failure. Now it is trying to say that the development of a Crown entity will somehow replace that very good Labour policy of a research and development tax credit. Well it plainly will not. This is woefully inadequate and I challenge the Government to actually come up with something that will work. We do not need any more slogans like a cycleway. That failed as well. A Crown entity is another attempt to make it look like the Government is doing something. But we will support it because quite frankly doing something no matter how little is better than doing nothing at all which is what the Government has been doing to date. 
SIMON O’CONNOR (National—Tamaki) 
: 
 Exhausting—absolutely exhausting. The Advanced Technology Institute Bill is a positive bill. There has been a little bit of focus actually on what was seen as a truncated or a supposedly fast process. I actually think the process was sufficient. 
Those of us who do research in different forms know that you come across a eureka moment and it can come at any point in time. I think this Government realised fairly early on the eureka moment around the Advanced Technology Institute Bill. This is an opportunity for the country and one that should be embraced enthusiastically. I think that when we look at the majority of the 23 submissions that we got in the Education and Science Committee people were behind this. There are always I suppose some cosmetic or small aspects to be discussed but by and large people are supportive of this project. This Government is keen to get on with the job—that is the key. 
When we look at the Advanced Technology Institute Bill there have been a number of distractions today in the speeches around it but there really are two words that sum up the bill. The first is “mechanism” and the second is “conduit”. This is a mechanism a legislative mechanism to bring about a body to facilitate research and development in New Zealand. It is a mechanism. It does not need to be incredibly prescriptive. It does not need to reflect ideology. It does not need to say which mates have to be on the boards. This is a mechanism a legislative mechanism to bring about an Advanced Technology Institute. 
What is this institute about? It is a conduit. At the end of the day it is about taking the best research in New Zealand and acting as a conduit to make the research into a commercially viable option. It mirrors a lot of institutes around the world. I can think of one that is somewhat similar. I had the pleasure earlier this year to go to the United States to look at the American political system. One part of our trip was to go into Massachusetts—it was actually back to a place Cambridge where I had lived—to see the Cambridge Innovation Center. This is a place that acts as a conduit taking good ideas and linking them to business. One of the most fascinating elements of the Cambridge Innovation Center was that the likes of Google and Microsoft had chosen to build nearby it. It is acting as a conduit—again facilitating research development and good ideas supportively and actually linking them across to business. I think when I look at the Advanced Technology Institute there are degrees and direct similarities at work there. 
Again it is important to see that this bill is firstly a mechanism and secondly a conduit. It is not something to be distracted pulled apart and seen as sort of a facilitation of cronyism or whatever else has been thrown at it today. This is a conduit for the substantial funding that the Government does put into research and development. There is often talk about these tax credits and so forth but what is often forgotten is that this Government has successively increased the total funding into research and development. As part of Budget 2012 this Government has allocated approximately $166 million over 4 years to the Advanced Technology Institute—$166 million over 4 years. This is a substantial contribution by the Government to support people in New Zealand. 
In fact it also touches on and gets very similar to something we have already out by Auckland Airport. There is a facility there to act as a conduit around the food industry a place where people come with their ideas and their research if you like and turn them into something that is commercially viable. Again there are really good examples both local and overseas that this Advanced Technology Institute Bill is working on. 
So I think it is really important that we do not get distracted by the cronyistic designs of some parties. It is certainly not a place to fall into the Chicken Little argument that this is going to be the end of research in New Zealand—we have heard that today. This is a bill a legislative mechanism—[ 
Interruption 
]; indeed—to facilitate and help people bring that cutting-edge research that New Zealand has. We think about the work that Orion Health does we think of the work that Fisher and Paykel Healthcare does. I think actually of a few of my friends who work within the scientific area. They want this bill. They are already at the coalface doing fantastic work. Let us get on with it. We promptly looked at the bill. We appropriately looked at the bill. Let us get it on to the Committee and the third reading. 
Mr DEPUTY SPEAKER 
: Dr David Clark—a 10-minute call. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 There has been under-investment by National in research and development—less than 1 percent of GDP compared with Denmark and Finland with about 3 to 4 percent of GDP. We know the OECD average is around 2.5 percent. This woeful under-investment in research and development is something this Government is doing nothing to address. National chose of course to cut the research and development tax credits that Labour put in place and it has also slashed budgets in other areas. It goes to show that those members just do not get it. You know they just do not get it. There are some issues they just do not get. There is also a woeful under-investment in private sector research and development which is linked to the public sector research and development investment as is shown across the OECD. The bureaucratic subsidy approach that National favours does not even fit with its language of having a business-friendly business-led approach. It is unfortunate; that is all you can say about it—a whole lot of red tape a slow way of doing business and it does not really encourage those who are the innovators in our society who want to take it forward and who want to make sure that there are high-paying high-skilled high-tech manufacturing jobs for the future ahead of us. 
We saw with the emissions trading legislation that we debated just before this Advanced Technology Institute Bill that instead the Government is preoccupying itself with taking the country backwards by extending subsidies for the businesses that are not in the high-tech space. That paints a picture of a Government that has its eye off the ball that does not have a plan for this country— 
Michael Woodhouse 
: Are they sunset industries too? 
Dr DAVID CLARK 
: —for taking our industries forward. Mr Woodhouse the member opposite is talking about sunset industries. No doubt he is including in there Hillside in Dunedin. Fisher and Paykel probably which shut down its manufacturing would be a sunset industry to Mr Woodhouse I suspect. He does not care that the jobs are going in Dunedin. He does not care that Tamahine Apparel Solutions shut down. He does not care that the jobs went at Delta Utility Services. He does not care that the Inland Revenue Department is shutting down its local services or that the taxpayer money that goes into Dunedin is being taken out so that there is an increase in unemployment locally. These are foolish things to argue Mr Woodhouse. The local situation in Dunedin is dire and the unemployment levels are rising and it is because of policies like this one we see before us which really is not favourable to businesses that want to innovate but instead makes it more complicated. 
It would be a good thing as part of a wider package and it is a timid step in the right direction. So ultimately although it is a slightly bitter pill Labour will be supporting this legislation because we think this kind of thing can be built on—if we did have decent research and development credits if we had some joined-up policy if we had decent procurement policies if we took care of the bigger picture if we looked at the kind of macro-prudential tools that the Reserve Bank might need to ensure that we actually had jobs and a thriving economy and an exchange rate that was favourable to our manufacturing export sector if we had pro-growth tax policy if we had the likes of a capital gains tax that would see money flowing from the speculative sector toward the productive sector and if we had procurement policies that actually looked at the whole economy. 
When the Hillside trains were to be built if we had looked at the wider economic benefit it might have been a very different equation. If we had looked at the tax paid by those people who were doing the manufacturing who had the jobs and if we looked at the money going to those industries that provide work into Hillside and the other engineering firms and if we looked at the wider benefits to our country of having a capable manufacturing sector we might have had a different outcome. So the research and development tax policies of course are critical in this context but those other things cannot be ignored because they are about ensuring that we do have economic development in New Zealand. 
To come back to that point John Key did promise 170000 new jobs and today just today we have the highest jobless rate in 13 years. It is the highest jobless rate in 13 years. There are 175000 people looking for work. It has not been this bad since Bill English was last finance Minister in the 1990s. Things have not been this bad. The only common element I guess we can see there very plainly. This timid approach to innovation which sees this under-investment is part of a bigger picture and it is also in some ways explained by the way this bill has been put through. We in the Labour Party believe that if you want to get good policy that supports industry that supports commercialisation that supports the scientific community and that actually builds our economy you need proper input from industry. You actually have to be willing to listen to the businesses that are doing this stuff not ramming it through at high speed not putting it through a “blink and you miss it” select committee process. 
You need to be looking at that bigger picture of course—the overvalued currency and the tools that would address that—and the other things that are going on in the New Zealand sector that are leading to the job losses that this Government has overseen the current decline in the economy and the drop in real wages. Recently announced was the median wage drop of 3 percent. Those things all need to be taken into account when you are setting the policy. But this process has not helped. Speeding this through the select committee does not give industry the scientific community economic development communities and members of the public the opportunity to make the contributions they can make that would actually make sure that we had proper decent policy in this area. Even if the Government does not have a vision for it that select committee process is an opportunity to get input from those that do. 
The high-tech manufacturing sector job skills and so on should also be given an explicit focus in this bill. This is what one of the submitters—one of the few submitters who was allowed to come along in the time frame or was able to—pointed to and we support this. Those objectives of having a high-tech manufacturing sector for increasing jobs and increasing skills should be given an explicit focus in the bill. Why not make it clear that that is what we are trying to achieve with this? Then questions can be asked if it is not being achieved so that we can actually have accountability measures and a clear focus. Likewise in the purpose statement it would be great—it would be crucial—that there not be unnecessary duplication and competition with pre-existing research provision by the Advanced Technology Institute. Why not make that explicit in the legislation? Again there were some submitters who were able to make the tightened time frame who made that point and Labour agrees with that. There are sensible and serious things that could have been included to improve the economic prospects associated with this initiative that were not taken into account. 
 Another aspect another conflict that sits in this bill is the funder/provider split. This is something that fits into basic public sector management principles. The funder/provider split is something you can ask Treasury about. It will wax lyrical about the importance of making sure that there is not a conflict between those who are bidding into the process and those who have got the funding. So that exists with the active functions of the Advanced Technology Institute: the research and development the knowledge and technology transfer functions and the enabling functions—the funding to third parties. We also note that there were very few submissions from industry and businesses directly engaged in high-value manufacturing and that has got to be a concern. 
Hon Trevor Mallard 
: They hardly had time to do it. 
Dr DAVID CLARK 
: Well they did not have time to do it as my colleague the Hon Trevor Mallard points out. That means that we are likely to get flawed legislation and that we are not going to get legislation that could be achieving to the extent that is possible if the proper processes of this Parliament are observed along with the habits of good parliamentary conduct. Labour also thinks that the education sector could be quite directly tied in so that again the advice and so on that is coming in takes account of that wider context. These are all things that were overlooked. 
On its own the Advanced Technology Institute cannot successfully transform our economy. It could be better but overall it fits within a wider context where the Government has its eye off the ball does not have a plan and is not taking care of those bigger-picture issues such as the exchange rate which makes it very difficult for the manufacturing sector. That is why we are seeing those engaged in the manufacturing sector drop off—the lowest numbers since statistics began we learnt yesterday. That is why if you do not pay attention to those things if you do not have pro-growth tax policies that support industries if you do not have simplified business practices if you are not actually looking out and listening to what is going on more broadly and if you are not willing to make the big changes to get our economy back on track it will not happen. This Government does not have a plan. It is overseeing the worst economic record of any Government in 50 years. It potters along. It is not making a difference and I look forward to hearing what Mr Woodhouse has to say about how this is going to be turned round because there is no evidence it is in the current settings. 
MICHAEL WOODHOUSE (National) 
: 
 It is my great pleasure to take the last call in the second reading debate on the Advanced Technology Institute Bill. I want to make a couple of comments based on submissions from previous speakers. I start by acknowledging Tracey Martin and the New Zealand First Party for firstly what was a very thoughtful contribution to this debate but also for the fact that having voted against this bill at its first reading the New Zealand First Party has considered and changed that position. I think that is a merit of the maturity of the thought that has gone into it. Also my colleagues on the Education and Science Committee have acknowledged the contribution Ms Martin is making to that committee. 
I want to congratulate Sue Moroney and Dr David Clark on and thank them for their continued support of a research and development tax credit. I do so on behalf of my colleagues in the Institute of Chartered Accountants of New Zealand because it will be they who benefit the most from that philosophically flawed goal. Please keep campaigning on it. If that is all Labour has to innovate in this country then that is fine by us. 
The last thing I would say is to Dr David Clark. I do not have the luxury of focusing on just the negative things that are happening in Dunedin—and Hillside is a very concerning thing. It is my duty my obligation and a challenge to point out the positive things. So for the New Zealand Honey Co. AbacusBio Farra Engineering Cowell’s Genuine Pavlova Pacific Edge Biotechnology Separett Silver Fern Farms Fonterra Speights Brewery for the many small companies that are benefiting from record numbers of cruise ship visits into Dunedin and the oil and gas exploration opportunities that present a massive manufacturing opportunity I will stand up I will fly the flag and I will say that the policies of this Government and this bill will benefit Dunedin. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. Is it appropriate for the member to refer to “you” in that way? 
Mr DEPUTY SPEAKER 
: We have ruled on that several times. The debate has now concluded. 
A party vote was called for on the question  
That the Advanced Technology Institute Bill be now read a second time. 
Ayes 101 
New Zealand National 59; New Zealand Labour 30; New Zealand First 8; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 15 
Green Party 14; Mana 1. 
Bill read a second time.