Film pays tribute to Sir Paul Callaghan while feedback flows in on R&D funding proposals

Scientists will learn on Budget day – Thursday – how much money the Government will be investing in science over the next year or so. A few days later a documentary film about nuclear physicist Sir Paul Callaghan, titled Dancing with Atoms, will have its world premiere in Wellington on Sunday.

Directed by Shirley Horrocks, the film was funded by the MacDiarmid Institute with the support of most New Zealand universities, including Massey University.

We can only conjecture on how Sir Paul would rate the performance of Callaghan Innovation, which was named to honour him. But a performance review this year found it wanting:

“Callaghan Innovation’s people need to put their passion into the effective execution of a clear plan and they need agile internal systems and processes.”

A report by Rob O/Neill in Reseller News says the Performance Improvement Framework report, completed in January, grades performance across different areas on a four colour scale: red for weak, orange for needing improvement, lime for well-placed, and green for strong. He wrote:

“Callaghan’s latest review is an improvement on one completed in 2015, but it still hasn’t received a green rating across any of the multiple measures employed – it scored 11 orange ratings and seven lime in 2018 compared with three red, 20 orange and two lime in 2015.

“The review says the lack of a plan is already being addressed by Callaghan’s new leadership, with a 12 month strategy roadmap, a three to five year strategy and new 90 day plans which effect the 12 month roadmap and promote clarity, discipline and accountability.

“However, Callaghan is not moving fast enough on system and process improvement. Legacy IT systems must be streamlined, the report says, rather than relying on the ongoing rollout of point solutions.”

Chief executive Vic Crone told Mr O’Neill Callaghan Innovation’s new vision and strategy has now been signed off and implementation will be under way from July.

“I’m confident that will shift a big chunk of our next round orange to green,” she says.

Callaghan Innovation was further embarrassed – or should have been – when the Taxpayers Union disclosed it had spent almost $3 million on travel and entertainment in 2015/16.

Among the entertainment spending was a $50 tip after a dinner at Wellington’s Dockside restaurant.

More than $300,000 was spent on entertainment.

The agency’s future is interwoven with the Government’s proposal to end Callaghan Innovation’s growth grants and introduce a 12.5 per cent research and development tax incentive.

Research, Science and Innovation Minister Megan Woods released a discussion document on April 19 which sets out the funding proposal.

For the following six weeks, she said, the Ministry of Business, Innovation and Employment, Inland Revenue and Callaghan Innovation will be seeking feedback through a variety of channels.

The Government’s aim, the Minister said, is to lift spending on R&D to 2.0 per cent of gross domestic product by 2027.

If the proposal is implemented, the tax credit on eligible expenditure will be available to businesses doing R&D in New Zealand from April 1, 2019. A business would need to spend a minimum of $100,000 on eligible expenditure, within one year, to qualify.

According to the Government’s proposal, businesses with an active growth grant as at March 31, 2019, will continue receiving their grant until March 2020. A temporary grant scheme mirroring the R&D tax incentive will be implemented to provide support for growth grant recipients with insufficient tax liability to use the R&D credit immediately.

But the growth grant scheme will be closed to new applicants on March 31, 2019.

One question raised by this will be answered in the Budget on Thursday: how much more funding over and above allocated under the previous national government will be allocated for Callaghan Innovation and other science agencies?

Another of several written questions put to the Minister by National’s Dr Parmjeet Parma in recent weeks (HERE) asked if the Minister will honour all the projects/contracts funded through Callaghan Innovation?

Dr Woods reply wasn’t an unqualified yes.  She said:

I expect that Callaghan Innovation will honour its contracts as long as the terms of the contract are adhered to.

Asked what changes she is planning for Callaghan Innovation and from when, she replied:

“No changes are currently planned to Callaghan Innovation, however future policy decisions may impact on aspects of Callaghan Innovation’s operations. Of course changes to the way the Government incentivises R&D could impact some of the existing administrative functions relating to Callaghan Innovation grants.”

Asked if she had received any advice from officials on any changes to the workings of Callaghan Innovation, the answer – given in writing on March 15 – was bemusing:

 “I have not received any advice on material changes to Callaghan Innovation’s operations. Callaghan Innovation is responsible for its day to day operations, and regularly keep me updated on any issues I need to be aware of.”

On a different tack, Dr Parmar asked if the Minister had sought any advice from officials on any changes to the workings of Callaghan Innovation. Dr Woods’ reply was emphatic:

“No.”

This suggests either that she sought no advice or that she worked furiously between March 15 and April 19 to incorporate advice before releasing the proposals for phasing out the growth grants.

We can only wonder what Sir Paul Callaghan would make of this.

A news item on the Massey website reminds us of his illustrious career. 

Sir Paul joined Massey’s staff as a lecturer in 1974 and he was appointed Professor of Physics 10 years later.

Sir Paul was appointed the Alan MacDiarmid Professor of Physical Sciences at Victoria University in 2001, the same year he became the 36th New Zealander to be made a fellow of the Royal Society of London.

He was awarded the Royal Society of New Zealand Hector Medal in 1998, the Ampere Prize in 2004, the Rutherford Medal in 2005, was appointed a Principal Companion of the New Zealand Order of Merit following year and, with the restoration of traditional honours, was formally knighted in 2009.

He was awarded an Honorary Doctorate of Science by Massey in 2010.

Callaghan Innovation was named after him when it was established in February 2013 with the Crown Research Institute Industrial Research Limited merged into it. The agency’s task is to make New Zealand business more innovative.

Film premiere:

The world premiere of Dancing With Atoms is at 3.30pm, Sunday May 20 at the Embassy Theatre, Wellington. Tickets $25/$15 for children 16 and under and students with ID available from eventbrite.co.nz

All proceeds from the film premiere screening go the Cancer Society of NZ.

Click here for a documentary preview.

 

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Victoria University research tackles nitrate pollution in waterways

Research carried out at Victoria University of Wellington has made big strides in tackling New Zealand’s serious nitrate pollution problem.

PhD student Putri Fraser, together with researchers from the University’s School of Chemical and Physical Sciences, have combined iron and natural silicates to create a safer, easier method of removing nitrate pollution from waterways.

Nitrate pollution destroys river habitats and aquatic life.

“Previous research shows that nano-sized iron can remove pollutants from soil and waterways, but it’s not a perfect solution,” Putri says.

“The iron is magnetic, so these nano-sized particles can clump up, reducing their reactivity and also making them difficult to work with. This clumping can also occur if they are ingested by fish, potentially harming wildlife.”

Putri needed to find a way of making the nano-sized iron less likely to clump but still maintain its reactivity towards pollutants.

She tested several different products, but the solution came in the form of a microsilicate product she first encountered while working as a Summer Research Scholar at Callaghan Innovation in 2012.

“This microsilicate product is cheap to produce and is a by-product of thermal power generation,” Putri says. “My supervisor (Dr Robin Fulton from Victoria University’s School of Chemical and Physical Sciences) and I thought it was very fitting to use another waste product to deal with nitrate waste.”

Putri says they were able to coat the microsilicate with the nano-sized iron, effectively increasing the size of the nano-iron while maintaining its reactivity.

“Coating the silicate with the iron makes it easier to distribute the iron in a solution, so the soil gets better coverage,” Putri says.

“Also, as the silicate-coated nanoparticles cannot clump, we don’t have to worry about any potential negative interactions with fish.

Dr Fulton says Putri’s research is significant.

“Not only has she made new materials for removing nitrate from waterways, she has also discovered that the ability of the nano-sized iron to remove nitrates is strongly influenced by the minerals around it.

“This discovery has implications for determining the best strategies for using nano-sized iron to address many environmental pollution issues.”

The next step is to see if this method can help with other pollutants.

“Along with a research team at the School of Chemical and Physical Sciences, I’m going to try different metals and coatings to see if there is a more effective combination, and also to see it’s possible to remove other pollutants from the soil using this method,” Putri says.

Putri will graduate with a PhD in Chemistry at Victoria University’s May graduation next week.

Source: Victoria University of Wellington

For good measure, let’s lop Callaghan Innovation’s admin costs, Taxpayers’ Union says

The eradication of Callaghan Innovation’s controversial Growth Grants in favour of a rules-based R&D tax incentive is a major victory for taxpayers, the New Zealand Taxpayers’ Union.

Taxpayers’ Union Executive Director Jordan Williams for years has been campaigning against these handouts to businesses hand-picked by Callaghan Innovation.

“Governments shouldn’t be in the business of picking winners – it rewards businesses for political connections rather than productivity, and it’s unfair on the winners’ competitors,” Mr Williams says.

“Despite countless examples of businesses receiving grants and then going bust (or being bought out from overseas), the National Government refused to accept criticism of Callaghan grants. On this issue, the Honorable Doctor Megan Woods has shown far better business sense than her National Party counterparts.”

With the primary function of Callaghan Innovation being phased out, the Taxpayers’ Union is pressing for a downsizing of the Callaghan Innovation organisation, which employs 386 staff with an average salary of $112,000.

It believes taxpayers could be saved up to $86 million a year in administration costs.

“An across-the-board tax incentive is a far tidier and less risky solution than gambling taxpayer money on a handful of fat grants to select businesses,” Mr Williams said.

But an even better solution – he argues – would be to simply reduce the corporate tax rate. That would avoid any boundary issues and risks of gaming of the new R&D credit.

The Taxpayers Union will be submitting to MBIE on these issues. weeks.”

Source: Taxpayers’ Union

Lifting R&D investment: Govt releases tax incentive discussion document

Research, Science and Innovation Minister Megan Woods and Revenue Minister Stuart Nash today have released the Research and Development Tax Incentive Discussion Document for public consultation.

The Government is committed through its coalition agreement with New Zealand First to increasing business R&D expenditure to 2 per cent of GDP over 10 years, Ms Woods said in a press statement. The  consultation document is the first step being taken to achieve that goal.

New Zealand’s gross expenditure on R&D is 1.28 per cent of GDP – much lower than the OECD average of 2.38 per cent.

“Growing R&D is a key lever in diversifying the economy and creating new industries, businesses, and highly skilled jobs,” Ms Woods said.

“Sustained increases in government investment will be important, but we will also need to see an increasing contribution from the private sector, specifically in businesses undertaking R&D.

“That’s why we’re introducing an R&D tax incentive as a significant addition to the system of government support for New Zealand’s innovation system.”

Revenue Minister Stuart Nash says the R&D tax incentive will have broad reach across the economy and will enable businesses of all sizes to undertake R&D.

“An R&D tax incentive will offer a greater element of certainty to businesses,” he says.

“It will be a simpler process, and will open access to those that have either struggled to access support or have been shut out of the process in the past. The system should stand the test of time and give businesses the consistency and confidence they need to succeed.”

Establishing a tax incentive mechanism of this nature had to be done carefully, Mr Nash says.

The discussion document sets out the main design and technical features proposed for the R&D tax incentive.

Over the next six weeks, the Ministry of Business, Innovation and Employment, with support from Inland Revenue and Callaghan Innovation, will be seeking feedback on specific aspects of this proposal to ensure the R&D tax incentive is fit for purpose.

AgScience readers can visit MBIE’s website to read the R&D tax incentive discussion document and make a submission HERE. 

Source: Government press statement

 

Business Operations Survey shows Kiwi businesses are lifting their efforts in R&D

The latest Business Operations Survey results show Kiwi businesses are lifting their efforts in research and development (R&D).

The 2017 survey included questions on business operations, innovation, business practices, and health and safety.

In 2017:

  • One in three New Zealand businesses invested in their expansion.
  • The total innovation rate was 47 per cent, compared with 49 per cent in 2015.
  • Businesses spent $1.8 billion on research and development.
  • Health and safety training was provided by 79 per cent of businesses.

The $1.8 billion spend on R&D in 2017 was a substantial 14 per cent increase on 2016. Furthermore, 13 per cent more firms are engaging in R&D activities compared with 2014 -2016, most notably with small and medium enterprises.

Studies show firms engaging in R&D grow faster, with higher employment growth, and are more value-adding.

Callaghan Innovation chief executive Vic Crone says the results are increasingly clear.

“We’re really encouraged by the latest BOS results and the fact more businesses see R&D as a competitive advantage,” says Ms Crone.

“At Callaghan Innovation we’re in a great position to see first-hand the difference science, technology and innovation makes for our customers in global growth, revenue, and investment opportunities.

“Whether scientifically proving claims, creating new sustainable products, or using super technologies to understand their customers better – R&D is significantly lifting business performance and job growth.”

The survey by Stats NZ collects performance measures from New Zealand businesses to better understand the practices and behaviours they undertake that may affect their performance.

Research shows a 1 per cent increase in business R&D expenditure can result in a 0.04 per cent increase in GDP.

Callaghan spending on entertainment and travel goes under the microscope

Callaghan Innovation spending has been put under the microscope by the New Zealand Taxpayers’ Union, which yesterday released a breakdown (HERE) of the science-funding agency’s entertainment expenses for 2015/16.

The privately funded monitor of public spending also examined Callaghan Innovation’s spending on domestic and international airfares in 2015/16.

For good measure, today it announced it has asked the Ombudsman to look into its allegation that Callaghan Innovation abused the Annual Report process to avoid responsibilities under the Official Information Act.

The Taxpayers Union has long been carping about aspects of the public funding of research and development.

In June last year its report, Socialism for the Rich, by Jim Rose, showed the annual cost of “corporate welfare” had climbed to $1.6 billion – or $931 per New Zealand household.

The Taxpayers’ Union commented:

In the past, the Government has directed investment at ‘public good’ science – research and development that has low commercial viability. Now, funding is going towards trying to commercialise technologies in the private sector. It’s socialised costs for privatised profits.

Last month the Taxpayers Union revealed Callaghan spent $304,000 on “entertainment” in 2015/16.

At the weekend it published a breakdown (available here) of those expenses for 2015/16.

Among the items were:

* $5212 on 188 visits to the Beer & Burger Joint (downstairs from Callaghan’s Auckland office);

* $4298 on lunches and dinners at Marvel Bar and Grill;

* $2063 on a team dinner at a drag queen cabaret bar (K Road’s Caluzzi);

The Taxpayers Union commented:

“Much of this spending is justified as entertaining ‘clients’ – but that’s absurd considering this agency’s ‘clients’ are actually businesses receiving Callaghan’s taxpayer-funded handouts. These ‘clients’ are already getting taxpayer pork; boozy dinners and latte lunches are just the gravy on top.”

According to the Taxpayers Union analysis of Innovation travel expenses, the 384 staff (as per their 2016 Annual Report), spent an average $2,641 apiece in domestic airfares and $1,079 on international airfares.

The union’s comments:

“Where on earth is Callaghan flying? They already have teams based in Auckland, Wellington, and Christchurch.

“The international travel spend is just as bad. Callaghan only operates in New Zealand, but still spent $414,000 on overseas airfares in just a year.

“We suspect part of this travel expenditure is for ‘customers’, i.e. businesses applying for grants. This is absurd – these businesses are receiving taxpayer money, now we discover we also pay for their flights, accommodation, wining and dining

The referring of Callaghan Innovation to the Ombudsman is a response to Callaghan’s response to a request on August 10 for a breakdown of its entertainment expenses for the most recent financial year, 2016/17.

Callaghan denied this request on the basis that:

“If we were to provide you with the information you have requested, we would be releasing information about our total expenditure before it is published within the Callaghan Innovation 2016/17 Annual Report. We are therefore refusing your request for this information under section 18(d) of the Act, as the information you have requested will soon be made publicly available.”

When the Annual Report was released later in the year, total expenditure figures were included but not broken down to show entertainment, accommodation, and airfares.

Callaghan has said (HERE) its total spending was “not unreasonable for a client-facing organisation of our size”, but there were a few cases of spending that were “not appropriate”.

It said it has tightened relevant policies to ensure work-related spending by staff is modest and appropriate for the public sector.

Former Labour Minister appointed chair of Callaghan Innovation

Research, Science and Innovation Minister Megan Woods  has announced the appointment of Pete Hodgson as the new Chair of the Callaghan Innovation Board.

Callahan Innovation is the Government’s business innovation agency and offers several  services aimed at accelerating the commercialisation of research.

Mr Hodgson is a former Minister of Research, Science and Technology and Chief Executive of Otago Innovation.

The Minister said she was delighted he has agreed to use his experience in science and technology-based innovation to lead the Board and provide strategic direction to Callaghan Innovation.

She thanked outgoing Chair Sue Suckling for her work over the past five years in leading the establishment and growth of the agency.

Mr Hodgson will begin his new role on April 1 for a period of three years.

It’s not the first job he has landed since the change of government.

Last month Health Minister David Clark sacked the Dunedin Hospital rebuild chairman, Hawke’s Bay consultant Andrew Blair, and appointed Mr Hodgson to lead the project.

Dr Clark told the Otago Daily Times the rebuild needed to be led by a local person.

Mr Hodgson was Dr Clark’s predecessor as MP in Dunedin North, serving from 1990 to 2011.