Shaw James: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeShaw James: Oral Questions — Questions to Ministers[Sitting date: 26 March 2015. Volume:704;Page:2647. Text is incorporated into the Bound Volume.]1.JAMES SHAW (Green) to the Minister of Science and Innovation: Does he stand by his statement that the Government will “build a strong business-led R&D ecosystem to strengthen and diversify New Zealand’s economy”?Hon STEVEN JOYCE (Minister of Science and Innovation): Absolutely. That statement was made on the launch of the TIN100 in October 2014 which noticed a billion-dollar increase in annual turnover by the TIN100 companies over a 5-year period and a big 9.7 percent lift in the research and development investment across the TIN 100 over a 1-year period. So it is a very exciting and positive story. My exact quote was that “The Government will continue to back Callaghan Innovation to work alongside New Zealand’s technology companies and build a strong business-led R&D ecosystem to strengthen and diversify New Zealand’s economy.”James Shaw: By what percentage has Government research and development spending increased under this Government?Hon STEVEN JOYCE: The latest figures we have are that it increased over the period 2010 to 2012 from 0.5 to 0.58 percent of GDP which is a 25 percent increase in a 2-year period.James Shaw: Has he seen the results of the recent Statistics New Zealand Business Operations Survey that show that in the National Government’s first year of office 8 percent of businesses invested in research and development and in 2014 the percentage of businesses investing in research and development was still 8 percent?Hon STEVEN JOYCE: The interesting thing about the Business Operations Survey is that it is virtually every business in the New Zealand economy. So the difficulty with that particular statistic is that you are adding in all the plumbers carpenters consultants and so on as the percentage of New Zealand companies. Probably a better estimate would be of the technology companies. What I tend to follow is the growth in the technology companies and the growth in research and development percentages as a percentage of GDP overall. I think that is probably a more telling situation in terms of the growth in research and development than just a bald number around a percentage of the total number of New Zealand companies.James Shaw: By talking about only the relatively small number of businesses that he has chosen to receive research and development grants and ignoring the 92 percent of businesses that do not invest anything in research and development is he being as tricky with the data as Simon Bridges on a bad day?Mr SPEAKER: Order! If a political answer is given do not blame me.Hon STEVEN JOYCE: I just think the member is completely wrong. He is wrong on many fronts actually. For such a short question he has managed to get a lot of things wrong including his reference to Mr Bridges who is a very dedicated and hard-working Minister for this Government. But also he is wrong in terms of suggesting that somehow I pick the people whom Callaghan Innovation gives funding to. That is just not correct. I suggest that he might like to get together with Mr Cunliffe who is suggesting that I am not picking enough of the companies and that I am actually being way too objective in my criteria setting. The simple reality is that companies get the opportunity to participate in that on an objective basis and those are the companies that actually do research and development. And if the member thinks I should ask the local hairdresser to do research and development I do not think that is a good idea.James Shaw: So given that there has been no change in the proportion of businesses investing in research and development since 2009 what is the return on investment of the additional Government spending on research and development?Hon STEVEN JOYCE: Again I am sorry but if I was the member I just would not hang my hat on a statistic that has got no relevance to the overall situation. You need to focus on the amount of research and development actually being conducted by New Zealand companies—and we will have updated statistics on that soon—and also focus on some of the independent metrics and measures including the one I gave out to the member in the answer to the first question: the TIN100. He may be cynical about that but that is actually New Zealand’s technology companies independently measured—nothing to do with the Government. The number that it showed was an increase of 9.7 percent in research and development across those top 100 companies in the year under study.James Shaw: Noting the Minister of Finance’s advice to this House that “Governments have to be very very careful about picking winners” why has he not developed a research and development funding strategy that reaches beyond a select number of hand-chosen businesses?Hon STEVEN JOYCE: The member is just simply incorrect. It does not matter how often he repeats it in his questions that does not change the fact that he is wrong. There are some very simple objective criteria for the research and development growth grant programme which are based on the amount of research and development conducted and the intensity of that research. Any New Zealand company—any New Zealand company—has the ability to apply for and secure that on an objective basis. If the member wants to keep persisting that that is not the case then he needs to go and visit his friends in the left-wing trolling community who keep running that stuff.James Shaw: What other examples of increased Government spending can he think of where the Government has invested money for zero return?Hon STEVEN JOYCE: There was a lot of it between 1999 and 2008. I would have to go back and actually go through all the different things because there was this massive increase in Government spending most of which was of a very very low quality and sent New Zealand into a recession before the rest of the world in the global financial crisis. Unfortunately the example the member brings today is the wrong example because that is lifting New Zealand’s business research and development.