Letter to the Editor, Thursday October 15, 2015

Another over-sell

So, science and innovation is a central policy issue for the Key government. And the regions are to be huge beneficiaries. Their challenge is to walk the talk, and Steven Joyce's record as the man in charge is abysmal. His style is to over-promise and under-deliver - and people in the regions know that better than most.

The Regional Research Institutes (RRIs) announced in Budget 2015 are the most recent promise, and look like another huge over-sell from the government's chief hype man.

When the RRIs were announced in Budget 2015, Steven Joyce proclaimed the "'launch of between one and three new institutes over the next four to five years, depending on demand." The devil is always in the detail with this Minister.

The announcement followed the typical formula of placing style above substance, and left many rightly sceptical as to the final outcome.

First, a glitzy announcement full of buzzwords and PR spin, but just enough loopholes and doublespeak to allow for a government backtrack. Check.

Second, a regional roadshow where every town from Southland to Northland is kept hanging, when in reality none of them are in the hunt. Check.

Of course, this is all a bluff, and the likely result is a quietly announced scaling back of the initial policy due to "inclement fiscal conditions" or "unfavourable economic headwinds." Watch this space.

Meanwhile, an independent report from MOTU confirmed that New Zealand's research sector is woefully under-funded by international standards. We are now in the bottom quarter of OECD countries for investment in R&D.

The government's own National Statement of Science Investment conceded that we are lagging behind other small advanced economies, and innovation by Kiwi companies is today still less than 2009 levels.

If Steven Joyce really believed in regional growth we'd expect to see the government leading the flow of capital into the regions. Yet the value of business R&D grants from Callaghan Innovation and its predecessor have a huge bias towards metros.

Since 2008/09, businesses in Auckland, Canterbury and Wellington have received nearly $700 million in grants. Businesses in Marlborough, Nelson, Northland, Southland, the East Coast and the West Coast have received just over $12 million in the same time. The spin clearly doesn't match the reality.

We know that this chronic lack of investment is hurting the regions. We know that over the last 12 months just 18 per cent of regional SMEs have seen revenue rise, while a third have seen revenues decline. It's no wonder economic confidence in Northland, Taranaki, Manawatu and Southland is dismal.

These are deep-seated trends. They are not political rhetoric. They show that Steven Joyce is paying lip service to the regions and hampering any chance of a smart economy by failing to properly invest in innovation outside the major centres.

I believe that a tweak here and nudge there just won't do it. The regions need more than government spin and PR fluff. They need higher levels of public and private investment, and a commitment to long-lasting change that benefits all.

New Zealand faces a stark choice - lift our game in science, innovation and technology and properly support regional growth, or face a future as a low-value, price-taking commodity exporter.

DAVID CUNLIFFE MP

Labour Regional Development Spokesman