Hutchison Paul: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
Hutchison Paul: Debate on Crown Entities Public Organisations and State Enterprises — In Committee 
[Volume:673;Page:19341] 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 I am grateful for the opportunity to speak on this review of the Foundation for Research Science and Technology—which has now disappeared as was pointed out by David Shearer—and also the Crown research institutes. It was a bit rich for David Shearer to talk about investment in science given that from 1999 to 2008 Government investment in science as a percentage of GDP basically flat-lined and private investment in science also flat-lined as well. I agree with him entirely however that New Zealand does have a huge task in incentivising private sector investment in research and development. But there is no doubt in my mind that the way the previous Labour Government was going about it splashing out $300 million in untargeted tax credits was absolutely the wrong way to do it. We know right around the world that such a method is associated with rorts. [ 
Interruption 
] Yes it is in Australia and we know that there are rorts right throughout the system there. Finland for instance with a much more attuned sophisticated targeted system has had a far greater deal of success. But I do agree with the member that there is a major task for New Zealand in looking to increasing this investment if we want to sustain economic growth as part of the trifecta of how we will achieve that—firstly through our primary products secondly through our tourism and thirdly through science and innovation. 
I think the other point that should be made is that if Labour ever thinks it will move the economy then it has to make the basic regulatory regime suitable for business. That applies to science and innovation as well—a low transparent tax system such as the National Government has achieved; a more flexible labour market such as has been achieved by the National Government obviously concentrating on excellent graduates; and of course ensuring that the regulatory regime in terms of bureaucracy is as straightforward as possible. 
But I think it is important in terms of getting the context of today’s science system in New Zealand right to look back to the past. The foundation was formed in 1990 under some rather interesting principles. They were firstly to allocate funds for the production of outputs relating to public-good science and technology and indeed one would hope that we look for outcomes. I think that over the last 20 years it has been difficult to judge the performance of our science system accurately. Obviously there are a whole variety of ways we do that whether it be by citations whether it be by conferences attended whether it be by spin-off companies or whether it be by underlying performance. All of those things are somewhat nebulous. It is absolutely important. The new science review and the new purpose of the Crown research institutes is to ensure that performance is looked at very carefully under independent 5-yearly audited reviews. 
Secondly back in 1990 the second principle was to allocate funds pursuant to ministerial schemes. That does fly in the face of ensuring that we have the discipline of an evidence base behind what we do and hopefully that has changed for good in the new reforms under National after the science review. 
Thirdly the foundation is to provide independent policy advice to the Minister of Science and Innovation on matters relating to research science and technology including our national priorities for those matters. That is partly where the rub was with the old foundation and the ministry. The foundation was the funder of the policy division and it became— 
Report noted.