We sifted through the Budget speech and the outpouring of press statements from the Beehive which typically gush about what Ministers have done for their sectors, looking for the word “science”.
We found one mention in the Budget speech (a document of around 6600 words), but not in a way that should cheer NZIAHS members.
Finance Minister Grant Robertson said unemployment was forecast to increase significantly, rising to 8.3% in the year ending June 2020, before peaking at 9.8% in September 2020 and then recovering thereafter.
Then he said:
“It is worthy of note that economic forecasting is more of an art than a science at the best of times, but more so than ever now. The full impact of COVID-19 around the world is still being seen. The depth and duration of the pandemic means that the economic outlook is highly uncertain and forecasts will change as more information comes to light. But what they do clearly show is the scale of the economic challenge that lies ahead.”
Fair enough but there was no subsequent mention of science or its potential to come up with solutions to the challenge.
“Science” was found in a ministerial press release, but only to draw attention to the fact that Research, Science and Innovation Minister Megan Woods was one of five ministers in whose name the statement was being jointly released
We did better – but not whoopingly so – in our quest to find references to research.
The Budget speech said the government was announcing a targeted extension of the successful Wage Subsidy Scheme.
The Scheme has already seen more than $10.7 billion paid out to support workers and businesses.
The extension will focus on businesses which are still doing it tough. It will be available for a further eight week period for those who have suffered a 50% reduction in turnover over the 30 days prior to application compared to last year.
It will follow on directly from the end of the first twelve week scheme. It is estimated to cost up to $3.2 billion.
This extension will provide further stimulus to the economy, keep people in work and give businesses more time as we move through Alert Level 2 to re-establish or reorientate their operations.
“Beyond the Wage Subsidy, our direct Business Support package includes increasing support to research and development.
“We are launching a $150 million short-term temporary loan scheme to incentivise businesses to continue R&D programmes that may be at risk due to COVID-19. The loans will provide one-off finance and will be administered by Callaghan Innovation.”
If our “search” function hasn’t let us down, that was our lot from the Budget speech. .
Something more promising looked likely in the press statement to which Dr Woods name was attached, along with the names of Phil Twyford, David Park, Stuart Nash and Kris Fasfot.
It was headed Budget 2020: Focus on jobs – Kiwi businesses supported to respond, recover and rebuild.
The bullet points signalled:
- On-the-ground support for Kiwi exporters in key markets to boost trade
- $230 million to encourage entrepreneurship and risk-taking to kickstart growth
- Giving SMEs a leg-up to increase sales through e-commerce
- Protecting small businesses and consumers by sharpening the Commerce Commission’s teeth
Under the subheading Encouraging entrepreneurship and risk-taking we learned:
“Feedback from the businesses community and lessons learnt after the Global Financial Crisis shows that businesses engaging in R&D are likely to cut investment in the current climate. That’s exactly the opposite of what we want to see this time around,” Minister for Small Business and Revenue Stuart Nash said.
“Initiatives from the COVID Response and Recovery Fund to encourage entrepreneurship and risk-taking leave it to businesses to choose what to invest in, rather than have the Government try to pick winners,” Minister for Research, Science and Innovation Megan Woods said.
The Government has put aside $150 million for a fund to provide loans to R&D-intensive businesses, to complement the existing R&D Tax Incentive.
- The scheme is intended to encourage R&D-intensive businesses to retain as much of their existing R&D programme as they are able to. We expect most R&D performing firms will be able to access repayable loans up to the equivalent of 50% of a business’ annual R&D expenditure, up to a cap of $100,000.
- The loans will be offered on favourable terms with the proviso that the money is used to conduct R&D. This recognises the value of R&D to New Zealand, and the difficulty many innovative firms have securing finance for high-risk R&D activity.
- The scheme will be up and running by early June. Further details will be announced in coming days.
Research popped up under another subheading, Supporting SMEs to thrive in the digital economy
“We have an amazing chance to leverage off our digital advantage in New Zealand – we’re small and high-tech, have a solid underlying ultra-fast broadband network, and we can work while the rest of the world sleeps,” Economic Development Minister Phil Twyford said.
Building off advice from the Small Business Advisory Council, a $10 million fund is being set up to provide incentives and grants to encourage e-commerce, train more digital advisors and provide information and support for SMEs wanting to incorporate e-commerce into their business models.
“We know that the time, investment and research required to get an e-commerce platform up and running has put many businesses off in the past. By working with small business owners, the Government can bring together the expertise and information for a speedy transition to e-commerce and a digital business model,” Stuart Nash said.
The investment is supported by $12.5 million to progress the trans-Tasman e-invoicing regime between New Zealand and Australia, agreed by Prime Ministers Jacinda Ardern and Scott Morrison.
“Trans-Tasman e-invoicing is one of many initiatives designed to make the business climate easier and fairer for small and medium enterprises during the recovery,” Stuart Nash said.
Much further down we found something that hinted at holding more promise under the subheading Targeted sector support:
To help drive the economic recovery and build future resilience, the Government is investing $41.4 million across three years into initiatives in the construction, digital and agritech sectors.
“These three sectors are well placed to help make our economy more productive and sustainable, and offer opportunities to use innovation to create higher skilled jobs,” Economic Development Minister Phil Twyford said.
Support for these vital sectors includes:
- Investing $11.4 million to grow the agritech sector and improve environmental outcomes while boosting productivity in the primary sector. This includes funding the development of robotics in horticulture and helping commercialise innovative technologies.
- Providing $6.5 million toward helping develop the Māori economy in sectors such as forestry and food where there are already strong iwi businesses. This funding will also help Māori develop opportunities in others sectors such as the digital economy.
Further details will be announced in coming weeks.
Disappointing, yes. But there are heaps of Budget documents and we will keep looking.