Cunliffe DavidHon DAVID CUNLIFFE (Labour—New Lynn): It is a pleasure to take a brief call in support of the Agricultural Compounds and Veterinary Medicines Amendment Bill. Labour does support this bill representing as it does a balance between two important objectives in fostering innovation around our primary industries. In my brief remarks I am just going to describe the balance that it seeks to find note why that is so important to the New Zealand economy and note a couple of issues that follow from it.The balance is designed to foster innovation and to allow our producers to extract competitive advantage by gaining a return on the investment that they have made in agricultural compounds. It might seem a technical part of our economy but this is important legislation because some 57 percent of all research and development undertaken in the New Zealand economy is undertaken in or around the primary sector. It is in agribusiness—broadly defined from the pasture to the farm gate to the factories that process and then market our protein stream and our fibre stream—that we believe New Zealand has a potential global competitive advantage.But we on this side of the House also recognise the challenges. New Zealand invests around about 1.27 percent of its GDP in research and development. The average across the OECD is 2.5 percent almost exactly double what New Zealand invests—and we have a smaller GDP to start with. The average for the small smart countries club"—the so-called small advanced economies—is closer to 3 percent nearer to triple what New Zealand invests. When you break that problem down it is not primarily a Government problem; there is a lot of bipartisanship around science and innovation policy. The previous Labour Government I think members opposite would agree did a very good job under Pete Hodgson. Much of what the current Government is doing we support but we would like to take it further.The issue that both sides would recognise is that although the Governments have been doing a reasonably average job at this private sector investment in research and development in New Zealand has been desultory—around about a third to a quarter of the OECD average putting us at the back of the pack. Neither Government has really truly cracked that problem. The current Government set up Callaghan Innovation to look at manufacturers and services and it has taken an end-to-end view of the value chain. That is not a bad thing in principle. It has not worked. Business research and development has not increased as a share of GDP.It is in this field of primary industry—in agriculture and in this case in respect of agricultural chemicals—that we in this House are collectively trying to seek therefore a balance between two essentially opposing forces. On the one hand for a new-entrant company or a new developer it can be an advantage to have short periods of intellectual property protection—short-life patents. What this bill does is it provides longer periods of protection for new information that is used to develop or market new agricultural or veterinary compounds. The reason it does that—and it is quite right and we support it—is that that period of protection allows an economic return to be earned from the investment that has been made in the development of those compounds and thus provides incentives for further private sector research and development.Bayer testified to the Primary Production Committee that it costs around about a million dollars to develop a new compound and around a half a million dollars to develop a derivative or an additive compound off that base. Any investor is entitled to a period of time where they can extract a return from that investment without knock-offs eating their margin. The question is: how long is enough? We think this bill strikes a reasonably fair balance which is why we are supporting it. The point of difference between the two sides of the House is how far we should go in stimulating research and development and innovation.We think that the dairy crisis—Mr Assistant Speaker I know it is close to your heart as the member for the Waikato—has given everybody a wake-up call around diversification. We are fortunate that we have had growth in tourism construction and other sectors to offset the dairy downturn. This bill is a small step towards further supporting the diversification of our economy and in that regard the Labour Opposition supports it."