Mapp Wayne: State Sector Management Bill — Second Reading Instruction to Committee In Committee 
Text is incorporated into the Bound Volume 
Mapp Wayne: State Sector Management Bill — Second Reading Instruction to Committee In Committee 
[Sitting date: 09 December 2010. Volume:669;Page:16265. Text is incorporated into the Bound Volume.] 
Hon Dr WAYNE MAPP (Minister of Research Science and Technology) 
: 
 I thought I should take a call in response to a number of the questions asked. I found it interesting when I listened to the various Labour members from whom we have heard so far. I sometimes think Labour members live in a parallel universe. The sense I am getting from the science sector is that there is a great deal of optimism at the moment and I do not mean just the stuff said directly to me but also what has been said indirectly through the Chief Science Adviser to the Prime Minister Peter Gluckman and many others. The sector sees that the changes the Government has made—which are not just legislative but also broader in the Crown Research Institute Taskforce and the increases in funding to the Marsden Fund and the Health Research Council—have been significant. Although Mr Shearer tended to dismiss these changes as being a minor consequence as indeed did Moana Mackey they are in fact part and parcel of a broader setting that we are changing here. In a sense we could say that this legislation is effectively enabling legislation. Although we may not see the words in here in a strategic setting effectively that is what is then able to be undertaken. That was missed in the previous division of the ministry and the Foundation for Research Science and Technology. 
I note that Moana Mackey is inclined to keep repeating the untruth—because she knows it to be untrue—that I did not want to be in charge of the ministry. She knows it is untrue because she knows that I actually said I was not expecting the portfolio. But I am very pleased to have got it. The reason I am pleased to have it is that I had spent a lot of time in Opposition in a working group on the North Shore which included people like Professor Raine and a number of other leading science people. We were thinking about the role of innovation in New Zealand and we wrote a series of papers on it as a part of the work that one does while in Opposition. When Dr Hutchison— 
Hon Darren Hughes 
: Did he ask the Prime Minister if he could be Minister of this portfolio? 
Hon Dr WAYNE MAPP 
: He knew I was interested because I had been writing papers on innovation for the party. 
In answer to some specific questions that Mr Hipkins raised on the issue of boards I say there will be two boards: one will be a science board and one will be an innovation board. The name—and I think Mr Shearer correctly recognised why the name was chosen—is intended to show an end-to-end process connecting fundamental science right through to commercialisation. As a consequence we need two boards. A science board will fund more of what one might call blue-sky research and will consist mostly of New Zealand’s leading scientists as we would reasonably expect. The other board is the innovation board which will be mostly focused towards the business end of funding: the Technology New Zealand funding and the $50 million there the vouchers worth $20 million over 4 years—they are hugely oversubscribed; there is a good lesson for the future—and the recently announced technology development grants which are worth about $190 million over 4 years. The grants were also hugely well-received. I might also add that they were oversubscribed and they were superior to Labour’s tax credit scheme which was aimed at lawyers. The tax credit scheme went through the Inland Revenue Department system and was disconnected from the most innovative businesses. 
I know that a number of members have made reference to the  
TIN100  
publication which is produced by the Technology Investment Network. That sets out New Zealand’s leading technological companies. They are the ones by and large that have benefited from the technology development grant. A rigorous process was undertaken to work out which firms had the highest levels of research and development capability and they are getting the grants. 
David Shearer 
: Which bureaucrat did that? 
Hon Dr WAYNE MAPP 
: It was an independent selection process I tell the member. So there are two boards there. 
A point was raised by Mr Grant Robertson about the balance between stable funding and contestable funding. That is an important point and the OECD task force made a report in 2007 on this very issue. The previous Government seemingly just ignored that report but we established the Crown Research Institute Taskforce which was intended to take on board the lessons from it. Members may know that the OECD has just come to New Zealand in the last week essentially to review what has occurred since then. The report particularly noted two things. The Crown Research Institute Taskforce will deliver more stable funding. We do not want all of the funding to be stable and I think Mr Robertson was correct in saying that. There is an issue of balance and we have the Science and Innovation Advisory Council to ensure that the balance is there. But there is no doubt that the Crown research institutes are enthusiastic about the results of the task force and are looking forward to implementing it. 
There are three elements. Firstly statements of core purpose are hugely important. The most effective Crown research institutes are the ones that have the best understanding of their mission. The second element is stable funding or core funding as it is called. The third element is a more appropriate form of accountability. Financial measures are still important but they are not the only measures. 
It is my clear understanding that those within the sector have been appreciative of the measures undertaken. They can see the strategic purpose of those measures: the ministry the Crown Research Institute Taskforce and the simplification—hugely—of the appropriations. I inherited a system where the appropriation system was chaotic and caused a huge amount of confusion within the sector. One of the ways that we improve the sector is to reduce compliance costs within the sector. Mr Shearer knows what I am talking about because he has heard it from many many people. Those sorts of things have been done to date. They form something of a foundation for further improvements and the sector has the opportunity to build from it. 
Part 1 is all about getting a more effective system that will be able to achieve the purposes set out in clause 7. I assure Mr Hipkins that the two boards have been established precisely to ensure that the Minister does not fund individual scientists. Thank you.