The Budget’s provisions for science and innovation — SMC seeks expert reaction

The Science Media Centre has gathered several comments on the Labour Government’s first Budget, which includes funding for the R&D tax credit (announced last month), a new Green Investment Fund to transition to help the transition to a low-carbon economy and funding towards healthier homes.

The SCM notes the budget’s inclusion of:

• over $1 billion in an R&D tax incentive to encourage businesses to innovate

• $10 million for improving the performance and transparency of New Zealand’s science investments through a National Research Information System

• $100 million for the Green Investment Fund, designed to encourage private-sector investment in high-value, low-carbon industries, clean tech and new jobs

• $45 million for promoting energy efficiency, including just under $13 million for a grant scheme for warm, dry homes.

Among the key players in the science and innovation sector who expressed their opinions were –

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Tax expert says R&D incentive is ‘light on detail’

The Government must release clear guidelines for the Research & Development tax regime to give more certainty to innovative companies, says Praveen Mistry, Director of Tax Services at William Buck Chartered Accountants and Advisors New Zealand.

The Government announced a reintroduction of the regime in the Budget on Thursday with the aim of increasing R&D spending from 1.3 per cent of GDP to 2 per cent of GDP, effective 1 April 2019.

In a commentary on the Budget, Mr Mistry says:

“We welcome this announcement in an effort to kick-start more innovation in New Zealand, where eligible R&D spending over $100,000 per annum and up to a maximum of $120 million will receive a 12.5% non-refundable tax credit.

“However, more guidance is necessary to give clarity to companies so they can start planning now to be globally competitive.”

To increase certainty, work needs to be done on how the proposed rules will operate, Mr Mistry says.

“The most obvious area of uncertainty is how the rules will apply to software development expenditure and how it will be treated,” he says.

“With software development being a major part of R & D spending in the modern world, this should be a major part of the government’s plan.

“Major reform has occurred in countries such as Australia, where ineligible activities – particularly in software- are considered ‘business as usual’.”

The Government must also consider current issues and contexts, Mr Mistry says.

“The Government must consider how existing companies with R&D spend will be treated, as well as if those companies who have received innovation grants from the Government will be eligible,” he says.

“Furthermore, will overseas companies with local operations with R&D spend in New Zealand be able to access the incentive?”

The administrative function also raise questions, Mr Mistry says.

“In the past, the Inland Revenue Department administered the incentive. It is uncertain what the needs around this are.

“The Government’s announcement is a good start, particularly for many of our clients and companies that rely a lot on innovation and new technology development as part of their business.”

But without clear guidance, the Government runs the risk of missing an opportunity to increase innovation in a rapidly changing global market place,Mr Mistry says.

Source: William Buck Chartered Accountants and Advisors New Zealand

Govt releases terms of reference for review of the dairy industry

The Government has released the terms of reference for a review of the 17-year-old Dairy Industry Restructuring Act 2001 (DIRA), which regulates Fonterra to protect the long-term interests of farmers, consumers and the wider economy. Sustainability issues are on the agenda.

The Ministry for Primary Industries will consult widely throughout the review, including surveys and formal consultation later in the year, Agriculture Minister Damien O’Connor says.

“The review will allow us to take a strategic view of issues facing the dairy industry,” he said.

“In particular it will look at open entry and exit for farmers, the raw milk price setting process, contestability for milk, the risks and costs for the sector, and the incentives or disincentives for dairy to move to sustainable, higher-value production and processing.

“The whole dairy sector needs to look ahead to see what trends and potential disruptions are coming our way and get ahead of consumer trends.

“Only through a frank appraisal of the issues will we come to the right conclusions.”

Mr O’Connor in December announced the Government’s intention to review the DIRA as a matter of priority.

In February the legislation was rolled over to stop certain parts expiring.

“And today I release the terms of reference setting out the objectives, approach and timing of the review,” Mr O’Connor said.

“The dairy industry will be fully consulted throughout the review so that any issues can be given full consideration before any changes happen.

“I look forward to receiving feedback from farmers, dairy processors, consumers and the wider public in the upcoming consultation process.”

The terms of reference can be found HERE.

Source: Minister of Agriculture

NZIAHS says science must play a key role in council plans – but where are the scientists?

The NZIAHS has examined the membership of the Primary Sector Council and found it wanting.

Agriculture and Rural Communities Minister Damien O’Connor announced the council yesterday (HERE).

The NZIAHS issued this statement today –

One big question is glaringly raised by the composition of the newly announced Primary Sector Council, says Dr Jill Stanley, president of the New Zealand Institute of Agricultural and Horticultural Science.
The question is: where are the scientists?

Damien O’Connor, the Minister of Agriculture and Rural Communities, has described the council as a group of visionary agribusiness leaders whose task is to help our primary sector capture more value from its work. It will provide independent strategic advice to the Government on issues confronting the primary industries.

Its first job will be to develop a sector-wide vision, taking account of ideas – for example – of sustainability, grower-to-plate storytelling, pasture-fed protein and smarter use of water. Good science is an essential component of each of those and will be in most other ideas the council considers.

The council includes Mark Paine, Strategy and Investment Leader for People and Business at DairyNZ and previously the Dairy Australia Principal Research Fellow at the University of Melbourne.

His job at DairyNZ is to address issues of recruitment, employment relationships, leadership and career development in the dairy industry. He oversees the strategy and investment in dairy education and training, from apprenticeships through to post graduate scholarships and is responsible for the industry strategy pertaining to the development of resources for farm business management.

Beyond Mark’s name on the list of 15 appointees, there are no scientists. This is a disappointing reflection on the perceived value of including agri-science leaders, be it senior scientists at AgResearch, Plant & Food Research, Landcare Research, Scion and ESR, let alone Massey or Lincoln Universities.

Presumably this is a deliberate oversight, giving expression to a ministerial embrace of “modern-think” whereby it is believed science will follow the lead set by innovators in business. This is contrary to experience: history shows science has led the way and enabled new opportunities in business to emerge.

The chairman of the new council, Lain Jager, at least should have a good understanding of what science can do for the primary sector’s sustainability and profitability. He is a former chairman of Zespri, the world’s largest marketer of kiwifruit and a company which owes a great deal to the multidisciplinary team from Plant & Food Research, led by Chief Operating Officer Dr Bruce Campbell, which in February was awarded the 2017 Prime Minister’s $500,000 Science Prize.

The prize was awarded for the team’s rapid and successful response to Pseudomonas syringae pv. actinidiae, or Psa, which threatened the destruction of the New Zealand kiwifruit industry in 2010.

The industry’s recovery was enabled by the team’s development of a new gold-fleshed kiwifruit cultivar, Actinidia chinensis var. chinensis ‘Zesy002’, referred to by growers as Gold3 and sold around the world as Zespri® SunGold Kiwifruit. Hundreds of genetically-diverse selections were screened and evaluated to find new cultivars with increased tolerance to the disease while meeting grower requirements and consumer demands for taste.

Forty-eight million trays of the new cultivar were sold last season, with an export value of $686 million, up 70 per cent on the previous year and increasing by around 10 million trays a year as newly-grafted vines reach production.
According to notes on the science award website, it is estimated that less than half the economic and social benefits would be achievable without SunGold.

The team also developed molecular diagnostic tests, a world-first and a breakthrough in the fight against Psa which enabled rapid testing of orchards to inform management plans and provided a mechanism to screen new cultivars.

The track record of this team and so many of our other agri-scientists is hugely impressive. It’s a shame Mr O’Connor has bypassed them.

Dr Stanley wonders how the council will be able to obtain the strong voice for science that they obviously need to achieve their goals. Will Mr O’Connor consider expanding the council?

If he doesn’t, will the council realise the need to draw on key people from the Royal Society and the CRIs, or possibly consult the Prime Minister’s Chief Scientist? Whoever they involve, science clearly must play a key role in the plans that the council recommends for creating a value-added primary sector.


Federated Farmers welcome new council – but where are the scientists?

Federated Farmers was quick to react to news of the new Primary Sector Council’s membership.

National President Katie Milne said having a dedicated panel for the primary sector was exciting, giving a chance “to really get focused on how New Zealand’s most important export earning sector will respond to a fast-paced changing world”.

The New Zealand Institute of Agricultural and Horticultural Science was considering the council’s composition, when this item was posted.

It will be hard-pressed to find many scientists among the 15 appointees.

So what ringing endorsement does this amount to for agri-science leaders and the senior scientists at AgResearch, P&FR, Landcare Research, Scion and ESR, let alone Massey or Lincoln?
The new council (see HERE) will be chaired by Lain Jager.

At least he will – or should – have some sneaking regard for science.  He was with Zespri as scientists helped the kiwifruit industry recover from the impact of PsaV.

National’s spokesperson for agriculture, Nathan Guy, had misgivings, too.

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Primary Sector Council to be headed by former Zespri chief

Agriculture and Rural Communities Minister Damien O’Connor has announced the membership of the Primary Sector Council, which will provide independent strategic advice to the Government on issues confronting the primary industries.

The immediate focus will be on developing a sector-wide vision.

The council, to be chaired by Lain Jager, former Chief Executive of Zespri Group, will have its first meeting in late May.

The 15 council appointees would provide fresh thinking at a time when New Zealand’s primary sector is facing unprecedented levels of change, Mr O’Connor said.

“Does that vision coalesce around ideas of sustainability, grower to plate storytelling, pasture-fed protein, smarter use of water and appealing to consumers who are prepared to pay more for products that align with their personal values?

“I do not have all the answers myself, which is why I am excited about the work the council will do.”

Once the council has developed a sector-wide vision it will work with each sector to develop individual strategic plans.

“These plans will include elements such as sustainable development, future value creation, technological opportunities and how a focused and thriving primary sector can reinvigorate rural communities.

“We’ve heard a lot recently about alternative proteins and the potential impact on our meat and dairy sectors. We also know some change will be required on environmental sustainability and a shift away from a commodity and volume focus.

“This move will give the primary sector its social licence to reap the opportunities of changing consumer trends.

“Kiwi growers and farmers have an immense collective knowledge and energy; they know sitting still is not an option and are constantly looking at ways to improve their operations. The Primary Sector Council will help harness that expertise.”

The Young Horticulturist of the Year and the Young Farmer of the Year will be invited to attend sessions as a development opportunity.

The council will comprise –

  • Lain Jager (Chair) – ex-Chief Executive of Zespri. He previously held roles in human resources, grower relations and corporate strategy.
  • Nadine Tunley – Chief Executive of Watson & Son and Managing Director of Energie Produce. Until recently, she was the Chair of Pipfruit NZ.
  • Puawai Wereta – General Manager, Sustainability and Innovation, at Tuaropaki Trust, where she is involved in a range of primary sector projects. The trust administers Tuaropaki land north of Taupo.
  • Julia Jones – a farm enterprise specialist at KPMG, with a background in banking for the agriculture sector and financial markets.
  • Tony Egan – Managing Director of Greenlea Premier Meats Ltd and Chairman of the Agricultural and Marketing Research and Development Trust.
  • John Brakenridge – Chairman of the New Zealand Merino Company Ltd and founder of the Te Hono Bootcamp Initiative. He is currently on the board of Landcorp Farming Ltd.
  • Stephanie Howard – Projects Director at the Sustainability Council NZ. Her current research is on new genetic modification techniques and the governance of nanotechnologies.
  • Shama Lee – the founder and Chief Executive of Sunfed Meats. She has experience in software development, business logistics and commercial strategy.
  • Mark Paine – the Strategy and Investment Leader for People and Business at DairyNZ. Previously he was the Dairy Australia Principal Research Fellow at the University of Melbourne.
  • Julian Raine – President and Chairman of Directors on the Horticulture NZ Board.
  • Neil Richardson – a chair and director on various boards, including the Foundation for Research, Science and Technology and Seales Winslow Ltd. He has consulting experience across a number of sectors, including agribusiness, transportation and distribution.
  • Miriana Stephens – a Director of Wakatu Incorporation. She also runs Aotahi (which develops and manages educational programmes) and is a trustee on Te Awhina marae.
  • John Rodwell – Executive Director of Lindis Crossing Station, Kintore Farm Ltd, a Director of Landcare Research NZ Ltd and has a background in finance.
  • Steve Saunders – the owner, founder and Managing Director of Plus Group companies and is the co-founder of Newnham Park Horticulture Innovation Centre.
  • Steve Smith –  Chancellor of Lincoln University.  He is also the founder and owner of Smith & Co and has extensive experience in the wine industry.

Also invited to council meetings are the Young Horticulturist and Young Farmer of the Year.  These are currently:

  • Shanna Hickling – 2017 Young Horticulturist of the Year and R&D Manager at Linnaeus Laboratory in Gisborne.
  • Nigel Woodhead – 2017 FMG Young Farmer of the Year. He has a sheep and beef farm in Otago.

Source: Minister of Agriculture and Rural Affairs

Evidential input into the policy process – a defence against the rise of post-truth polemic.

Sir Peter Gluckman, the Prime Minister’s chief science advisor, today released a report on “Enhancing evidence-informed policy making”.

Prime Minister Key last year asked Sir Peter to further review the state of New Zealand’s science advisory mechanisms to update his earlier report in 2013. Prime Minister English reaffirmed this request.

Sir Peter said protecting and enhancing evidential input into the policy process is an important defence against the rise of post-truth polemic.

The New Zealand science advisory system has matured into one that is well regarded
internationally, he said. Nevertheless, globally there has been increasing concern about risks to the effective interface between science and public policy.

The rise of post-trust and post-expert rhetoric elsewhere has influenced public policy decisions, “a situation which New Zealand has fortunately thus far largely been spared, but we cannot be complacent”.

In his covering letter to the Prime Minister Sir Peter says:

“The worrisome rise of ‘post-truth’ polemic and the greater and easier promulgation of ‘false news’ that we have seen globally in recent times can be seen as threats to the democratic process, social cohesion and good governance. I believe that a commitment to protect and enhance the evidential input into the policy process is an increasingly important defence against these trends.”

The report discusses the development of Departmental Science Advisors, a major
development since 2013, and the role of the Committee of Science Advisors (CoSA).

It explores in depth the relationship between academia and policy making, identifying the perceptional and actual barriers that have inhibited better engagement of the policy and academic communities.

The role, opportunities and limits on the use of big data in evidence-informed policy making are discussed, particularly in the context of the development of the social investment approach.

The increasing importance of the science advisory system in risk management, crises and emergencies is a further focus of the report.

Some other dimensions such as horizon scanning and foresighting are briefly discussed.

There will always remain complexities at the interface between science and policy, Sir Peter said. Between science and society this largely relates to matters of effective engagement, transparency and accessibility of expertise.

The report is available HERE.