Cunliffe David: Advanced Technology Institute Bill — First Reading 
Text is incorporated into the Bound Volume 
Cunliffe David: Advanced Technology Institute Bill — First Reading 
[Sitting date: 13 September 2012. Volume:683;Page:5226. Text is incorporated into the Bound Volume.] 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I would like to acknowledge the words of the Minister of Science and Innovation and in particular the dedication of this new research institute to the late Sir Paul Callaghan someone who commanded I think the universal respect of this House for his contribution to science and learning and his contribution to New Zealand’s economic development and we would certainly echo that. Labour will be supporting this Advanced Technology Institute Bill to set up the Advanced Technology Institute. We think it is a small step in the right direction but not by any means enough. 
New Zealand spends less than 1 percent of its gross domestic product on innovation and research and development. Of that about 0.6 of a percent—about two-thirds—comes from the Government and only one-third comes from the private sector. The OECD average is 2½ times New Zealand’s level of investment— 
Dr David Clark 
: Average? 
Hon DAVID CUNLIFFE 
: —and that is the average—and the leading small smart countries invest between three and five times New Zealand’s level of investment per capita in research and development. In this year’s Budget the Government increased slightly in nominal terms investment in innovation and research. However it cut almost three times that amount from the economic development budget thus effectively rearranging the deckchairs on a growth programme that is simply not working. 
I think we need to concede that when this Government was first elected a number of New Zealanders including some of those in the research and technology sector thought that it was prepared to consult and that that was a good thing. The Government it has been said by some brought a style to its operations that appeared to be in touch with the community and that was welcomed by some. 
 Is it not interesting how times have changed? In 4 years what we hear now is the sound of dashed expectations. The Government consulted and it did nothing. It promised a brighter future; what we got were longer unemployment queues. It said that it would innovate but instead it is continuing subsidies to pastoral agriculture and seems to equate extractive mining with economic nirvana. That is not to denigrate the huge contribution of agriculture or the significant place of mining in our economy but it is to say that it is not a sufficient answer. 
What I think there is bipartisan support for and why we are supporting this bill is the clear importance of innovation and research and development being at the heart of our economic development system and we recognise that something like an advanced technology institute could play a key part in that role. But New Zealanders need to understand that although the Government talks the talk it is taking at best only baby steps on the walk. 
Let us look for a moment at some of the implementation issues that surround the Advanced Technology Institute. There are no scientists on the establishment board. It is wholly made up of managers and executives. It is top-heavy with management. The lack of scientific voices in the governance arrangements demonstrates that it is not about science at all but about just the commercialisation of it. 
Dr Paul Hutchison 
: What about Neville Jordan? 
Hon DAVID CUNLIFFE 
: Mr Jordan is an entrepreneur first and foremost. The Government is trying to make a big deal of all the new funding. The reality is that although $166 million has been committed to develop the Advanced Technology Institute most of this came from existing savings. The Government has taken from Peter to pay Paul. The total rose by only $37 million. Meanwhile the Ministry of Economic Development budget was cut as part of the Ministry of Business Innovation and Employment transfer by around three times that amount. 
Another proportion of the funding comes from the planned sale of State assets and that asset sales programme is on the rocks because the Government cannot even do a bad thing well. It is interesting is it not that Industrial Research Ltd is being made a subsidiary under this bill? We know that the Government has a policy of being able to privatise subsidiaries thus raising the question of Industrial Research Ltd’s long-term future. 
The brief of the Advanced Technology Institute needs to be able to address the key impediments to technology-led economic development particularly routes to market and the availability of investment capital. There is nothing in the plans for the Advanced Technology Institute that addresses either issue. The Government has in the past referred to the Danish model the Danish Technological Institute. But what is interesting is that that institute is moving in exactly the opposite direction from the Advanced Technology Institute by allocating more resources to research by consultancy and activities whereas the Advanced Technology Institute is bringing them in-house. 
The brief of the Advanced Technology Institute is relatively narrow to the manufacturing industry—or it started that way; it has recently been increased to include food and wood products. At issue is whether that is now too wide and whether the relationship between the Advanced Technology Institute and other Crown research institutes like Scion for example which also deals with wood products is in fact clear and proper. There is a clear danger with the Government’s habit of trying to boil the ocean and doing nothing well. 
In the detail of the arrangements are issues like the tight time frame with a 30 September report back and that will be a matter that we wish to take up in a later motion. Other issues are the skill set of the chief executive the role of existing commercialisation units how the Advanced Technology Institute will actually differ in practice from other Crown research institutes and how it will work with the universities which continue to act like fiefdoms—each trying to do everything and the Government apparently giving up on the very sound idea of creating specialisations and centres of excellence. 
The scientific community is disappointed by National’s approach to innovation and technology. There has been a lack of communication and there have been mixed messages from the Government. It says it wants more young people to develop skills in science and technology and yet it has just cut postgraduate student allowances. National is letting New Zealanders down with its lack of vision and ideas. There has been a persistent under-investment by this Government in research and development. National cut out the popular research and development tax credits that were brought in by the previous Labour Government and oddly replaced them with a bureaucratic subsidy approach which manufacturers and innovators in my electorate have told me makes them jump through hoops for Wellington public servants rather than be able to get on and do what they do best. Is it not interesting that the current National Government talks the talk about partnerships with business but in fact walks the walk of an old-fashioned bureaucracy in an area where it clearly lacks expertise? 
National has just failed to understand the needs of a modern innovation ecosystem where there have to be centres of excellence with close partnerships between Crown research institutes universities and businesses; constant flow of information and people; and deep specialisation in areas of emerging market advantage. We are seeing none of that. We are seeing a bureaucratic approach centred in Wellington making businesses jump through hoops with a lack of investment and a lack of funding for the system overall. And all the while that this muddle is going on National has failed to address the surrounding economic problems that are killing our innovative firms. 
Again today the official cash rate held up. The gap between that and rates in our key trading partners is growing our exchange rate is rising and our best innovative firms are going to the wall or being bought up by foreign corporations. Our economy is being hollowed out and this Government is sitting on the sidelines watching it happen and doing nothing. Does it have no ideas? Say so get out of the road and let the incoming Labour-led Government save the country. If the Government has got ideas for goodness’ sake tell the country what they are and get on and do it because small things like this institute good as it may well be are no solution for the problems facing the innovation sector. The Advanced Technology Institute in this context is just a fig leaf covering a multitude of sins. With declining real investment in research and development and a failure to address the key structure impediments—with a lot of devil in the detail for the Education and Science Committee to sort out—the Government needs to be under no illusion that this small step will not deliver a research nirvana.