Shearer David: Estimates Debate — In Committee 
Shearer David: Estimates Debate — In Committee 
[Volume:665;Page:12782] 
DAVID SHEARER (Labour—Mt Albert) 
: 
 One thing that both Labour and National agree on is that research science and technology is a key driver of our economy. It was with some excitement I suppose—not “excitement” perhaps; I did not get too excited about the Budget—but it was certainly with some anticipation that I heard that a special announcement on science research and technology would be made in the Budget. That was announced a week before the main Budget. I thought it would be the announcement of a key driver to really get behind the economy to be the plan and to be the strategy for the future. Well what an insipid ad hoc arrangement we saw. 
I will speak on two things. The first is that there was an increase in the Budget. I acknowledge that there was an increase in the Budget this year of $56 million. What was it to do? It was to be spent on grants and vouchers administered by the Government and given to companies. That was this Government’s answer to increasing and driving private sector research and development. We have one of the worst research and development spends in the private sector in the OECD and what do we do? We give money to the Government to sit there and ask for applications from companies to be given money. 
The research and development tax credit of 15 percent meant a change in culture in the private sector. I have been to a lot of companies around New Zealand in the last few weeks and asked all of them the same question which was what they thought about the grants scheme in the last Budget. The answer was always the same—well actually not quite the same. The big companies said that they will get $2 million or $3 million and that is fine by them. It means that they will be able to push some of the stuff that they were already going to do in research and development and buy some things that they were not necessarily going to spend our money on. But the small companies said that they are not affected because they probably will not get anything out of the new funding of $56 million. They will get nothing. Unanimously small and large companies said that they would have preferred the 15 percent tax credit because they would have taken the extra bit of risk in the knowledge that the 15 percent would be met by the Government. 
That is what the Australian Government has done. The Australian Government has just bumped up its research and development tax credit to 15 percent at the same time that we have eliminated ours. We have increased our research and development spending by about 5 or 6 percent which is just about enough to keep pace with inflation. What has Australia done? It has increased its research and development spending by 25 percent. Australia has a 15 percent tax credit and a 25 percent increase in its research and development spending and we sit in this House and hear about this Government’s plan to catch up with Australia. I ask how we can possibly catch up with Australia when one of our key drivers research and development science and technology has just fallen yet further behind where the Australians are on that. What a ridiculous insipid de facto “plan-less”—if there is such a word—Government we have before us. 
The second thing is that instead of having a real plan and a real strategy we have the merging of two departments. The Ministry of Research Science and Technology and the Foundation for Research Science and Technology will be merged together. This is shuffling the deckchairs on the  
Titanic 
; it is nothing more than that. We will spend $6 million on this exercise. It will not even return a benefit in the first 5 years. 
There is no plan. There is no strategy. If I can applaud the Government for something it is the new name that they have given this merged entity: the Ministry of Science and Innovation. To some degree I agree with that but one would think that the Government would put somebody in place to head it. One would think that this Government would undertake a really good search for the best person the best brains in the world to head it but it did not do that.