Posts Tagged ‘Callaghan Innovation’

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.


Part of a diversification policy? Science bureaucrats party with drag queens

The Taxpayers’ Union has revealed that a small government agency charged with fostering innovation, research and development spent more than $300,000 on “entertainment” in 2015/16 – including a drag queen dinner and show for staff.

The Union gained receipts (see HERE) for Callaghan Innovation’s entertainment purchases via the Official Information Act.

Taxpayers’ Union Executive Director Jordan Williams said:

“From a laundry list of receipts from bars, cafes, and restaurants, we’re still working through abuses of taxpayer money. Already we’ve discovered a blatant example: $2,063 ($2,372 including GST) spent on a team dinner at a drag queen cabaret bar, K Road’s Caluzzi.

“Dinner at Caluzzi includes a show, and a promise that ‘you will be entertained and served by our fabulous drag queen hostesses throughout the night.’ The bill included eleven bottles of wine, and one non-alcoholic drink.

“We’ve got nothing against drag queens, but this was an event for staff, funded by taxpayers. It’s an appalling display of largesse from an agency the average taxpayer hasn’t even heard of.

“All up, $304,675.22 was spent on entertainment in the 2015/2016 year. That’s enough money to host a Sunday barbeque for the entire city of Invercargill.*

“Our researchers have also requested and are awaiting the entertainment expenses for 2016/17 with anxiety.”

Callaghan Innovation is a government agency supporting hi-tech businesses in New Zealand.

It provides pilot plant services, state-of-the-art shared facilities and R&D expertise like the Gracefield Innovation Quarter and the New Zealand Food Innovation Network.

It is involved in Science for Technological Innovation, a 10 year research programme involving all New Zealand universities, SCION, AgResearch, GNS and Lincoln Agritech.

In the 2016 financial year, the Government gave Callaghan $223m.

From this, Callaghan provided nearly $86m in growth grants to 51 businesses. Almost $23m went to hundreds of businesses in project grants and another $4m was given to students.

A Ministry of Business, Innovation and Employment spokesperson told Stuff before the general election Callaghan spent $68m in “operational funding” such as programmes and services.

* Based on a barbeque for four, including 1kg of sausages ($6), a box of Lion Red ($15.99), a can of tomato sauce ($1.60), and a loaf of bread ($1).

Scientists claim Callaghan Innovation is focused too much on economic gain

Callaghan Innovation has been criticised by some scientists who claim it cares more about economic gain than the science behind it.

The Crown agency was created to strengthen the ties between the science and business community through grants.

But University of Auckland physics professor Shaun Hendy is reported by Radio New Zealand as saying it hadn’t worked well, and there had been too much focus on economic gain.

He wanted the agency to be given a mandate to make broader links.

“Not just with the business sector, but the social sector, the government sector, so right across New Zealand society – Callaghan could be that bridge.

“These days we’ve got to look a lot more broadly. We’ve got to look at social impact – social enterprise for example – and look at the environment as well.”

Callaghan Innovation’s briefing paper to the incoming minister says the agency is projecting an expenditure this year of $307m including $204m on grants.

Radio New Zealand noted the agency had been named in memory of award-winning scientist Sir Paul Callaghan, a leader in the field of nanotechnology and magnetic resonance, and founding director of the MacDiarmid Institute.

He was a champion of science and technology being the key to diversifying New Zealand’s economy.

Nicola Gaston, a principal investigator at the MacDiarmid Institute, told Radio New Zealand she feared that vision had been skewed in recent years.

“I think it was a message that scientists needed to hear at the time … but since he said that we have had so many changes in our science system.

“I feel like we’ve gone too far.”

Dr Gaston said the Government should look at how Callaghan Innovation was running.

“My feeling is there’s just been so much of a one-dimensional push towards increasing commercial research.”

Science and Innovation Minister Megan Woods referred to her Government’s intention to introduce a research and development tax credit. She said this would help keep the ideal balance between research and business.

“The balance between grants and R&D tax credits will tip things and will have businesses able to make a whole lot more of their decisions about the research and development that they’re going to invest in internally without going through the grants process.”

Ms Wood said she had expressed a concern about the funds being held by one organisation.

But although this was a difficult thing to manage, she credited Callaghan with having done a reasonable job of it.

A change in Govt funding policy – but perhaps not before Apple gets a $25m bite

There’s only so much money in the Government’s science funding pot so it’s always worth keeping an eye on how much will be in the pot and who gets how much of it to do what.

At Fairfax’s Stuff site, Science, Research and Innovation Minister Megan Woods has confirmed the Labour, NZ First and Green Government will be reintroducing research and development tax credits.

Under the scheme, companies wanting government money to keep up with technology trends will no longer need to apply for grants from Callaghan Innovation.

Instead they will have the option again of claiming back a credit for privately funded research.

This was portended by Labour’s campaign commitment to a 12.5 per cent tax credit for research and development.

According to the Stuff report (HERE) –

The National Party axed tax credits when it was elected in 2008. They were replaced by Callaghan, which handed out $113 million in grants to hundreds of businesses last year.

Woods did not outline any specific changes to come for Callaghan and, prior to the election, said her party was not proposing any, despite criticising National’s system as “bureaucratic” and “picking winners”.

This week she said she would be meeting with respective government officials – likely from the Ministry of Business, Innovation and Employment and Callaghan – to discuss a roll-out plan for the scheme.

Woods said Callaghan occupied a “really important space” in the innovation industry and more businesses undertaking research and development would be a “huge cause for celebration” for the agency.

Business leaders seem to be welcoming the change.

ManufacturingNZ executive director Catherine Beard said businesses would happily welcome back tax credits, especially those that did not fit Callaghan’s criteria for growth or project grants.

However, she said the Government should ensure that applying for the tax rebates involved little paperwork.

And –

The Manufacturers’ Network (previously named the New Zealand Manufacturers and Exporters Association) chief executive Dieter Adam said it was great to see tax credits return.

But he was concerned that if Labour was only in government for one or two terms, the credits could easily be axed again by the opposition.

“That would be a huge waste,” Adam said.

The Taxpayers Union, meanwhile, is critical of money being dished out under one of the the old Government’s funding programmes.

Union executive director executive director Jordan Williams says the world’s most profitable company is set to receive up to $25 million a year in corporate welfare grants, thanks to Callaghan Innovation’s ‘growth grant’ programme as a consequence of Apple buying  PowerbyProxi, a major recipient of the R&D grants.

Williams said:

“First it was money for Larry Ellison’s Oracle, then French company Gameloft, and now Apple is getting in on the action. Our Government’s corporate welfare schemes make New Zealand a laughing stock. We pay for R&D and don’t even require the results to stay in New Zealand.”

“Designed in California, funded by Kiwi taxpayers. Anything that results from the R&D ends up in the pockets of Apple’s shareholders. It’s nuts.”

“Callaghan Innovation is trying to defend the grants by pointing out that they couldn’t have known the business would be bought by Apple. But that’s mischievous. Korean giant, Samsung, has owned a substantial equity stake since 2013.”

Callaghan student grants breaking records

Callaghan Innovation has approved the 2017/18 round of Student Experience Grants, with 139 businesses to offer 358 students paid work over the summer break.

A record 179 businesses applied for 418 internships

Since Callaghan Innovation was established in 2013, 274 different companies have been approved for an Experience Grant. As a result, over 800 students have undertaken an R&D Experience placement.

The grants support undergraduate students studying science, technology, business, engineering or design to gain valuable work experience during the summer student break. They provides funding of $18 an hour for up to 400 hours of work.

The programme is available to businesses of any size that have a focus on research and development. More information is available HERE.

Two new appointments to Callaghan Innovation Board

Two new appointments to the Board of Callaghan Innovation have been announced.

Science and Innovation Minister Paul Goldsmith said the appointments of Stefan Korn and George Gong bring a strong combination of strategic thinking skills and perspective from an investor community.

Stefan Korn is an entrepreneur, business strategist and investor with more than 10 years of experience in managing high-growth ventures, early-stage investment and software development. He was a member of the Callaghan Innovation Stakeholder Advisory Group, is a founding investor in Lightning Lab, and has a PhD in Neural Networks/Artificial Intelligence and an MBA in International Business.

George Gong is an entrepreneur and Angel Investor with international business experiences in the Information Technology industry for more than 20 years. In 2016 he started Zino Ventures, the first Chinese angel fund in New Zealand.

Both appointments are for a term of one year.