10. Research and Development—FundingDr PARMJEET PARMAR (National) to the Minister of Research Science and InnovationResearch and Development—Funding10. Dr PARMJEET PARMAR (National) to the Minister of Research Science and Innovation: What progress if any has she made lifting research and development expenditure towards the Government's target of 2 percent of GDP?Hon Dr MEGAN WOODS (Minister of Research Science and Innovation): The Government's target of lifting R & D to 2 percent of GDP in 10 years is of course an economy-wide target—that is a mix of Government and business expenditure—so I am happy to report that I am making good progress towards that target with the design of an R & D tax credit that will lift New Zealand's business expenditure to be more in line with OECD countries that have innovation at the heart of their economies. Detail of the expenditure will of course be part of the Budget 2018 process. This is an important part of our Government's plan for a higher productivity and high-wage economy.Dr Parmjeet Parmar: How can she increase R & D spending by taking money away from the Primary Growth Partnership (PGP) fund that was going to fund research and development but has now been diverted to fund bureaucratic reshuffling in Wellington?Mr SPEAKER: No. No. Members are going to learn not to use ironic expressions as part of their questions. Does the member want to have another—I'll let the member have—[Interruption] Well I'm going to finish ruling first. I will allow the member to rephrase her question without the use of irony if she wishes.Dr Parmjeet Parmar: How can she increase R & D spending by taking money away from the Primary Growth Partnership fund that was going to fund research and development?Hon Dr MEGAN WOODS: Of course the PGP partnership falls within the primary industries portfolio but we have an ambition to raise expenditure on R & D in this country by lifting New Zealand's business expenditure beyond its current 50 percent. We have also signalled through our coalition agreement areas where we intend to put through the Budget 2018 process additional areas for funding.Dr Parmjeet Parmar: As the Minister of Research Science and Innovation does it not concern her that the first thing her Government has done for R & D is to cut R & D spending when she has such a lofty target of increasing R & D spending to 2 percent of GDP?Hon Dr MEGAN WOODS: No this does not concern me because I know that this is a Government committed to making sure that science research and development lies at the heart of our economic future. We are not content to let New Zealand languish at the bottom of the OECD targets like the previous Government did.Virginia Andersen: Why is it important that we introduce an R & D tax credit?Hon Dr MEGAN WOODS: Because we need more business R & D being done in this country. Under the previous Government a small number of firms contributed to the bulk of business R & D with 26 percent of all expenditure being carried out by only six firms in 2016. With the introduction of an R & D tax credit we want to see a much wider group of businesses undertaking R & D that will help us move towards a higher wage innovative economy that works for all New Zealanders.Dr Parmjeet Parmar: How much new money has been allocated in today's Half Year Economic and Fiscal Update for her commitment of increasing R & D spending to 2 percent of GDP?Hon Dr MEGAN WOODS: The additional funding for R & D expenditure will of course like other forms of Government funding be part of the 2018 Budget process.Dr Parmjeet Parmar: I raise a point of order Mr Speaker. I asked a very specific question and if there is no money the Minister should just say that.Mr SPEAKER: I think she got an answer that the whole House understood.