Budget 2015’s meagre R&D spending

Posted By TEU on Apr 16, 2015 |

Prime Minister John Key used a pre-budget announcement to confirm that the government will spend another $80 million over four years on Callaghan Innovation’s project to encourage more private sector research and development.

Key says the funding is equivalent to a 14 percent increase in research and development spending.

However Green Party co-leader Russell Norman says $80 million for research and development over four years is underwhelming and doesn’t even keep up with inflation.

And the New Zealand Herald’s economics editor, Brian Fallow, is even more scathing, contrasting the small increase to the larger fall in R&D spending at universities in recent years.

“The increase in funding for business research and development grants Prime Minister John Key announced yesterday looks even less impressive in light of numbers Statistics New Zealand released two weeks ago… it comes after public sector R&D spending directly and through the universities fell by $59 million or 4.1 percent between 2012 and 2014.”

Fallow points out that the amount the government is spending on R&D is just 1.1 percent of gross domestic product, or less than half the OECD average of 2.4 per cent of GDP. And it is unchanged in dollar terms from 2012.

“An R&D spend of 1.1 per cent of GDP does not constitute keeping up, never mind catching up”, said Fallow.

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