Scoop Election 08: edited by Gordon Campbell

On Sir Peter Gluckman, and the government’s science package for business

May 13th, 2010

So far, at least two isotopes of the government’s chief science advisor Sir Peter Gluckman have been isolated, and identified. The commonly observed variant – lets call it P1 – emerges at regular intervals to emit bromides that science is good, that the government’s science policy is moving in the right direction, and that the science community really has to lift its game – preferably, by its own bootstraps. This week, P1 was hard at it justifying the government’s $321 million science r&d package over the next four years, $225 million of which is new funding.

A hard sell, given the package happens to be less than half the size of the former government’s $630 million science research package. In particular, this new, commercially-focused initiative will remove $96 million from the existing budgets for research into health, social issues and the environment and press it into the direct service of business. “I think it’s a very good set of initiatives,” P1 told RNZ yesterday morning.

Meanwhile, the other known Gluckman isotope – lets call this one P2 – is himself a scientist. It was in that guise that P2 appeared before the health select committee this month to bewail the shabby levels of health research in New Zealand, and to urge the country to build a new “ecosystem” to enable the research community to develop. Gluckman made these telling points to the committee about our current under-funding of health research in particular :

For every dollar New Zealand spends on health research per capita, Australia spends $2.78, Denmark spends $6.03, Ireland spends $1.84, Singapore spends $6.73, the United Kingdom spends $4.62, and the United States spends $7.73. The discrepancy is made worse in that there are large charitable funds for medical research in the fore mentioned countries. Another limitation is that New Zealand hospitals do not have access to a large amount of the high-technology equipment, such as magnetic resonance spectroscopy scanning (PET) and metabolomic assays, which are increasingly being used in clinical physiology and phase 1 and 2 studies.

Holy cow, that’s terrible. Someone really should tell P1 – because that certainly makes it sound as if it would be a very bad idea to raid the cookie jar for health research and hand it over to business. Unfortunately, any attempt to bring P1 and P2 together in a public experiment tends to have highly unstable and unpredictable results – as evidenced in this encounter yesterday between Gluckman and RNZ’s Large Plunket Collider. The encounter on Morning Report included this telling exchange, in which Gluckman seemed at first to be damning the business sector for not doing its fair share of r&d, and then backing off from that logical conclusion :

Gluckman :…our private sector spends between 25 and 30% of what other comparable private sectors spend [on r&d]
Plunket : So why should the government subsidise a private sector that isn’t pulling its own weight?
Gluckman : Lets call it market failure….
Plunket : Is subsidizing the market …and giving them the easy option the answer to that?
Gluckman : It’s helping our business to realise that they need to use knowledge better, if they aim to export products to the world, to make New Zealand richer.
Plunket : But they don’t need to spend money on it, because they can apply to the government for a grant, and the government will give it to them…

From this point on, the pressure being exerted began to generate increasing instability – eg, responses of “You’re trying to make me sound like a politician” – as the subject began to demonstrate coterminous political behaviours, such as not answering the question asked, but one of his own devising.

Joking aside, this brand of corporate welfare is really indefensible. Not only are the public – and scientists – missing out from the misdirection of funds for health, social and environmental research ( ie,stuff that would benefit the entire community) into a corporate slush fund. Science will also suffer from being channeled into short term, profit-enhancing activity. As Plunket intimated, the process will also foster the dependence mentality that already exists within business circles. When dependence occurs among those on the dole or the DPB, business leaders tend to be among the first to complain about the erosion of the work ethic. Not so, when they are the ones queuing up for the handouts.

For all the complaints routinely made about Big Government, the business community would have been bereft for the past three decades if the state hadn’t always stepped up to pay an unfair share of the costs for business research and development. In the past, it was DSIR research that gave many New Zealand firms their competitive edge. Today, the government and the universities significantly outspend the private sector on r& d. Lets look at the current situation:

R&D expenditure was measured in the business, government, and higher education sectors. Universities were the only tertiary education institutes included in the higher education sector in this survey. State-owned enterprises and private non-profit organisations were included in the business sector. The business sector was responsible for 43 percent of all expenditure on R&D in New Zealand in the 2008 reference year. The government sector contributed 27 percent and the higher education sector made up the remaining 30 percent.”

The full gross expenditure on r&d by sector, and by reference year is available here in the informative table 2.01, on page 4 of “Research and Development in New Zealand: 2008″ which is the source for the paragraph cited above.

During 2008, which was the last year measured (the 2010 survey kicks off more or less, right now), there was a $2,140 million gross expenditure on research and development. Some $913 million of this (ie, 43%) came from business, with the remainder coming from government, in one way or another. Namely, from central government ministries and departments, Crown entities that include the Crown Research Institutes, Crown-owned companies, government funding agencies, and local government organizations. This added up to $643 million or 30% of the total in 2008. In addition, the higher education expenditure on r&d was $584 million, or 27% – thus totaling in all, a $1, 227 million contribution from the state, or 57% of the overall spend.

In other words, the public is funding one and a third times as much r&d as the private sector. Unfortunately, the Key government has now decided to make this situation worse via its new science package, by expanding the capacity of business to sponge off the taxpayer. The government is, in effect, donating taxpayer funds to meet the corporate sector’s responsibility for investing in its own future competitiveness. Truly, the dependency culture of most concern to this country is not located in South Auckland. It is occurring amid a private sector that seems happily reliant on the government to fund much of their r&d, and deliver them a consistent diet of tax cuts. Isn’t it time these people got off their backsides and started earning their own way in the world ?

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Content Sourced from scoop.co.nz
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    1. 2 Responses to “On Sir Peter Gluckman, and the government’s science package for business”

    2. By richarquis on May 13, 2010 | Reply

      If a parent company starts a subsidiary at least once every 5 years, do they remain eligible for continuing handouts?

    3. By davebrown on May 13, 2010 | Reply

      And this is presumably a subsidy for actual productive activity (but who would be brave enough to make that assumption?) What about the bludgers who make their money from speculating in land values, the share market and the NZ currency etc. who are actually in Cabinet, and pay no capital gains?
      The rent farmers are our actually existing underclass.

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