Robertson Grant: State Sector Management Bill — Second Reading Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
Robertson Grant: State Sector Management Bill — Second Reading Instruction to Committee In Committee 
[Sitting date: 09 December 2010. Volume:669;Page:16267. Text is incorporated into the Bound Volume.] 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Before I was interrupted on the State Sector Management Bill I was about to go on to clause 8. But I think I will return briefly to respond to a couple of Dr Mapp’s comments in particular in relation to the research and development tax credit since I had raised that matter. 
Suggesting that the fund that has been set up—some announcements about which were made in the last few days—somehow replaces that tax credit is a bizarre thing to say. How does Dr Mapp or indeed any of the officials who are making the decision really know they have covered the waterfront in terms of making sure we have the best and the brightest people working on the best ideas in New Zealand? The research and development tax credit had the great advantage of being universal for companies and accessed by everybody. Weta Digital does remarkable work and needs to be supported in that but it might not be the only organisation that is doing that work. We need to support companies across the board if we are going to lift the amount of research and development that is done in New Zealand. It is no coincidence that other countries in the world use a universal-style tax credit because they want to encourage all companies to invest in research and development and the opposite is true: they do not want to see companies going overseas because the support is not there. 
One of the great risks of moving away from the tax credit approach is that the Australians have retained the tax credit and the incentive is now there for people to go overseas. So it is all very well to say that a fund has been established and we are finding the people who will lead us into the future but what about new companies? What about the start-up companies that really need that support but now do not get it because winners have been picked by the Minister of Research Science and Technology or the Minister’s officials? I think that the Minister raising that point now really drives home to us why this bill and why Part 1 of this bill although relatively anodyne does not take us anywhere. Those good initiatives of the fifth Labour Government may have been undone by the Minister. 
I am grateful to the Minister for responding to my comments about the question of contestability and stability and obviously that is an issue of great significance to the Crown research institutes. It is also an issue of significance to universities. University research in this country is vitally important to our economy. It is of growing importance to our economy and there is concern among some university researchers about the way in which they relate to Crown research institutes how they are able to work with them and whether there are systems in place within the purposes and the criteria laid out in Part 1 for universities and Crown research institutes to work together. University researchers are very well aware that their job is to get into those contestable areas and to try to get support. They have the Performance-based Research Fund as an underlying piece of stable funding but it is very important for them to know they are regarded as being part of that research sector. I encourage the Minister in talking about that to ensure that universities are mentioned. 
To return to clause 8 as I was about to say in the Education and Science Committee one submitter came to us and suggested that the way in which the Minister might set criteria needs some consideration as well. The question really was whether the Minister should be setting this criteria on an annual basis or perhaps with a slightly more arm’s-length approach by moving out to some kind of policy statement that might set the criteria with a frequency of no more than every 3 years. Again the committee looked at the approach as listed in clause 8 and felt that it was OK for that to continue. But again there was some concern as my colleague Chris Hipkins said about the closeness of the Minister to some of those procedures. How do we know that a particular Minister will not push a particular barrow and so on? That was one of the issues raised under clause 8. The Minister in the chair could take a call and advise us how he will implement clause 8. When this bill is passed into law—for a brief period anyway—it will be his responsibility to implement it. 
The Education and Science Committee decided to make a change to clause 9 and I am sure that my colleague David Shearer will take this matter up as well. We were concerned about the way in which proposals could be referred to the boards and how they would make decisions on those matters. In order for boards to be independent and to give a proper assessment that was not directed entirely by officials or entirely by the Minister they would need their own sources of information. Clearly that was of great concern to us.