Megan Woods’ signals next steps on the R&D tax incentive

Research, Science and Innovation Minister Megan Woods has released another update on the Research and Development Tax Incentive.

She said feedback on how to make the R&D Tax Incentive work better had been “incredibly valuable” and she is confident of introducing a scheme that will help more New Zealand firms increase their R&D.

What we did

We made a number of changes after listening to your feedback, such as lifting the credit rate to 15 percent, and lowering the minimum expenditure threshold to $50,000. We also amended the definition of R&D so that eligibility could be accessed more easily across all sectors.

All the policy details, including submissions and official papers, are available on MBIE’s website.

On the Growth Grant front, we have extended contracts until 31 March 2021. If you are a current Growth Grant holder, Callaghan Innovation will continue to support your transition to the tax incentive over this time.

Next steps

Legislation to enact the R&D Tax Incentive is now going through Parliament.

I encourage you to get involved in the select committee process so we can really hone in on the technical details. You can read the Bill in its current form and make a submission to the Finance and Expenditure Committee on Parliament’s website. You can also read a commentary of the Bill, which clarifies some of the more technical aspects of the Tax Incentive, on Inland Revenue’s website.

We are also beginning ‘phase two’ of the consultation process, where we’ll address issues such as refundability, and refine, extend and simplify the reach and usability of the Tax Incentive.

We want to ensure we engage widely with the right people, so if you would like to be involved I encourage you to make contact with the teams at MBIE and Inland Revenue.

Summing up

It’s important to remember that the R&D tax incentive will be one form of support amongst many for supporting business innovation.

Dr Woods said one of her priorities as Minister for Research, Science and Innovation is to have a full package of support for New Zealand’s Innovation system, including more support for start-ups in the near future.

Source:  Minister of Research, Science and Innovation

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Scientists raise questions about secret review of $1.6bn funding programme

New Zealand Herald science reporter Jamie Morton has reported the questioning of the Government’s refusal to release a review of a major science initiative that just received hundreds of millions more dollars of public funding.

The National Science Challenges, a set of 11 collaborative efforts, bring together thousands of researchers across different institutions and aim to tackle the biggest issues facing New Zealand.

Launched four years ago after each was finalised by a Government-commissioned peak panel, they range from work around freshwater and natural hazards to healthy ageing and nutrition, the challenges.

Funding – projected to reach a total investment of $1.6 billion – was allocated for 10 years in five-year periods, so that performance and future direction could be reviewed.

Last week the Government’s announcement of its approval of $422.5 million, bringing investment so far to $680 million, followed a mid-way performance review by the Government’s Science Board.

Research, Science and Innovation Minister Megan Woods said the review had shown the challenges were “fundamentally changing the way science is being undertaken in New Zealand”.

The Ministry for Business, Innovation and Employment (MBIE) provided the Herald with a summary of the review, which stated the challenges were delivering collaborative programmes, supporting “excellent science” and had “appropriate governance and decision-making processes”.

But Jamie Morton reported the ministry had withheld the full review, prompting it to request the report under the Official Information Act.

The ministry’s strategic investments manager Danette Olsen was reported as saying the ministry did not release assessment or peer-review reports that supported investment decisions made by the Science Board.

“This empowers reviewers and experts to provide their free and frank advice, and also protects potentially sensitive information and intellectual property.”

The New Zealand Association of Scientists (NZAS) was “extremely concerned” by the ministry’s secrecy.

“This is public funding used for the national good,” president Dr Heide Friedrich said.

“The NZAS would welcome for review information to be made public, and thus contributing to a healthy discussion on research funding mechanisms.”

Science commentator and past NZAS president Professor Shaun Hendy was also critical of the process.

“Normally, scientific reviews of research programmes like these would be kept confidential, but the public were important stakeholders in the challenges and even played a role in selecting them,” he said.

“I think the lack of transparency in the selection of the challenges by the peak panel, particularly where this deviated from the popular voting, demands a higher level of public scrutiny than we might ordinarily ask for.”

Hendy said there had been some wins from the challenges – more than 150 projects were under way, delivering more than 400 publications since 2014 .  But they had also put an “extraordinary level of stress” on the science system.

“There has been a lot of discussion about the resource that is going into their governance for instance,” he said.

“Furthermore it would be very helpful of we had some public data on who is being funded and for what.

“Right now, it’s very hard to tell whether the challenges are engaging with emerging researchers or whether, as some of the criticisms have suggested, the funding is going to an old boys’ network.”

Another prominent scientist, MacDiarmid Institute co-director Associate Professor Nicola Gaston, said one of the biggest concerns around the challenges and their funding was an original indication they would provide a “de facto science strategy” for the country.

The development of the Government’s National Statement of Science Investment had gone some way to removing concerns around funding, because it had made clearer the relationships between different parts of the sector.

“However the balance between complexity and efficiency of our research system is a delicate one that does need monitoring — for now I would say that the stability provided by this continued funding is absolutely what the sector needs.”

Professor Hendy still wanted to see a tough audit of the way the challenges were selected, procured and contracted, “so we can figure out how this might be done better in the future”.

The 11 challenges are “A Better Start”, “Ageing Well”, “Building Better Homes, Towns and Cities”, “Healthier Lives”, “High-Value Nutrition”, “New Zealand’s Biological Heritage”, “Our Land And Water”, “Resilience To Nature’s Challenges”, “Science for Technological Innovation”, “Sustainable Seas” and “The Deep South”.

The biggest amounts in the second round of funding went to Science for Technological Innovation, Our Land and Water and High-Value Nutrition ($72.7 million, $69.3 million and $53.2 million respectively).

MBIE planned to release summaries of reviews of each of the challenges this week.

Source:  New Zealand Herald

National Science Challenges receive $422.5m vital research funding

The decision to release $422.5 million in research funding for New Zealand’s 11 National Science Challenges, which are working to address some of our biggest challenges like climate change, housing and mental health, has been welcomed by Research, Science and Innovation Minister Megan Woods.

The Science Board, which is responsible for investing Government funds in research, science and technology, approved the second tranche of funding bringing the total investment to $680.8m following a positive mid-way review.

Funding for the National Science Challenges was allocated for ten years in two five-year periods, so that the performance and future direction could be reviewed, Dr Woods said.

The review has shown that the Challenges are fundamentally changing the way science is being undertaken in New Zealand.

The Minister said:

“This approach brings our top scientists and researchers together to work collaboratively across disciplines and alongside Māori to develop science – something that is truly world-leading.

“While the Challenges are at different stages of development, each is delivering excellent, collaborative research programmes that will have enduring benefits for New Zealand.”

More than 150 projects are now under way across the 11 Challenges, already delivering over 400 publications since 2014.

This research has the potential for tangible impacts in a number of wider Government priority areas such as biosecurity, child well-being, mental health, resilience to hazards, climate change, sustainable land-use, and housing and urban development, Dr Woods said.

To read more about the National Science Challenges, visit the Ministry of Business, Innovation and Employment’s website.

Source:  Minister of Research, Science and Innovation

RSI System Performance Report is released

Science and Innovation Minister Megan Woods today announced the release of the 2018 Research, Science and Innovation System Performance Report, detailing how New Zealand is performing in key areas.

Findings show New Zealand’s science system is highly productive and produces a large amount of publications both per researcher and per $1 million spent on higher education and research, she said.

New Zealand’s international collaboration rates are high and strong connections have been made with key overseas partners, including in the United States, Australia, the United Kingdom, Germany and China.

The Report also says that while only 20% of New Zealand university graduates specialise in STEM subjects, New Zealand has a net brain-gain with more STEM professionals migrating to New Zealand than STEM professionals departing.

Total expenditure on R&D was 1.23% of GDP in 2016.

The Ardern Government is committed to raising this to 2% – an increase that will require sustained growth in R&D investment by both the public and private sectors.

The 2018 Research, Science and Innovation System Performance Report presents a series of findings from across the system, and compares New Zealand’s performance to other similar-sized economies and Australia.

It can be read on the MBIE website HERE.

Source:  Minister of Research, Science and Innovation

Dr Woods pushes diversification further into the science community

The Government’s diversification policies are being pushed further into the science domain, where they are already being applied by the Royal Society of New Zealand.

Research, Science and Innovation Minister Megan Woods has announced the launch of new measures “to help increase diversity in New Zealand’s science community”.

“Diversity guarantees we capture the very best ideas and talent to support the highest quality research. This work will maintain the existing high level of scientific excellence in the workforce while enabling fair and equal opportunities for all,” says Dr Woods.

The Ministry of Business, Innovation and Employment estimates female doctoral graduates outnumber male doctoral graduates, but women make up just 32% of the scientific workforce, Dr Woods says.

And whilst nearly a quarter of the New Zealand population identifies as Māori or Pasifika it is estimated they make up less than 2% of the scientific workforce.

The ministry’s new Diversity in Science Statement

” … aims to support a vibrant and successful science and research workforce that is as diverse as New Zealand. This will happen through the way policies are developed, encouraging diversity of people and perspectives as part of scientific process, challenging bias, and ensuring fair and inclusive funding processes.”

Specifically, it’s a commitment to:

·       collect and report on the diversity of science funding applicants,

·       review funding policies and process to understand their impact on inclusion and diversity,

·       ensure a diverse range of people and perspectives in science advisory, assessment and decision making bodies, and

·       showcase researchers from a diverse range of backgrounds and raise awareness of unconscious bias.

“This initiative is a big step towards everyone having a fair and equal opportunity to participate in our science system to their fullest potential,” says Dr Woods.

“Diversity of genders, ethnicities and career stages throughout the science community cannot be achieved without strong leadership, mentors and role models who challenge bias and encourage inclusivity at every step of the science process.”

The Point of Order blog reports a challenge to belief in the efficacy of diversification programmes, quoting a critique by Heather MacDonald, the Thomas W. Smith Fellow at the Manhattan Institute and a contributing editor of City Journal. She earned a BA from Yale University, an MA in English from Cambridge University, and a JD from Stanford Law School.

She writes for several newspapers and periodicals, including The Wall Street JournalThe New York TimesThe New Criterion, and Public Interest, and is the author of four books, including The War on Cops: How The New Attack on Law and Order Makes Everyone Less Safe and The Diversity Delusion: How Race and Gender Pandering Corrupt the University and Undermine Our Culture (forthcoming September 2018).

She argues:

Marie Curie did not need female role models to investigate radioactivity. She was motivated by a passion to understand the world. That should be reason enough for anyone to plunge headlong into the search for knowledge.

As for the belief that diversity encourages excellence and that diverse thought is necessary to solve complex problems, MacDonald says this is ludicrous on multiple fronts.

“Aside from the fact that the one thing never sought in the academic diversity hustle is “diverse thought,” do [the champions of diversity] believe that females and underrepresented minorities solve analytical problems differently from males, whites, and Asians?

“A core plank of left-wing academic thought is that gender and race are ‘socially constructed.’ Why then would females and under-represented minorities think differently if their alleged differences are simply a result of oppressive social categories?”

Columbia’s science departments do not have 50/50 parity between males and females.

But does this prevent them from achieving “excellence”?

MacDonald notes:

“Since 1903, Columbia faculty members have won 78 Nobel Prizes in the sciences and economics. The recipients were overwhelmingly male (and white and Asian); somehow, they managed to do groundbreaking work in science despite the relatively non-diverse composition of their departments. “

The  Royal Society’s diversification policy aims (among other things):

To embrace diversity in all Society activities, with particular emphasis on those involving panel- and committee-based evaluation and assessment processes, and public lectures and other events.

The society shares the Minister’s confidence in the beliefs which are debunked by MacDonald. Its policy says:

The value in different viewpoints and perspectives offered by people of different backgrounds, age, experience, ethnicity and gender is considered to lead to more informed decision making, greater innovation and better outcomes for our stakeholders.

We believe that recognising and embracing diversity provides the opportunity to make our organisation stronger, leads to increased morale, and is an essential element in the long term success of the Society.

Under the society’s policy all employment interview panels should have at least 30% women.

At least 30% of nominations/applications in all nomination rounds should be from people from under-represented group.

The society’s staff including management and Council must have at least 30% from under-represented groups.

Results are to be published annually.

$58m for research supporting environmental, economic, social outcomes

Research, Science and Innovation Minister Megan Woods today released the revised 2019-2021 Endeavour Fund Investment Plan, with new investment signals to support the Government’s aim of transitioning to a more sustainable economy.

The Endeavour Fund supports over $200m of research each year, investing in ambitious research ideas with the potential to transform our economy, environment and society. It will invest $58m of new annual funding between 2019 and 2021.

The Government’s vision for New Zealand puts the long-term well-being of people and the environment at the heart of what it does, Dr Woods said.

“That’s why the Endeavour Fund will now be guided by investment signals that reflect the Government’s priorities of growing R&D intensive industries, and transitioning to a low emissions economy. These new signals will initiate much needed research into both areas.

“Research, science and innovation will make a vital contribution towards improving kiwi’s lives by informing and improving how we respond to the social, economic and environmental challenges we face.”

The new investment plan also introduces a new approach to supporting higher-risk, transformational Research Programmes proposals. This is to encourage research proposals in emerging areas where impact initially can be harder to assess, such as technologies, and goods and services which are new to New Zealand, or new to the world, Dr Woods said.

Other key settings of the Endeavour Fund remain unchanged.

The Science Board will continue to make funding decisions, and excellence and impact will continue to be key assessment criteria.

The Fund will continue to support research with a broad range of economic, environmental and social impacts beyond the new investment signals.

The Investment Plan is a guide for researchers and scientists to apply for funding, and will cover the next three rounds from 2019 to 2021.

More information on the 2019-2021 Endeavour Fund Investment Plan can be found can be found HERE  on the Ministry of Business, Innovation and Employment’s website.

R&D tax incentive update: Minister says legislation will be introduced in October

Reporting progress on the Government’s plan to introduce a research and development (R&D) tax incentive, Research, Science and Innovation Minister Megan Woods reiterates the aim to lift New Zealand’s economy-wide spend on R&D from 1.3% to 2% of GDP over the next 10 years. The tax incentive will be a key lever in reaching this goal.After a consultation period, officials are now producing final recommendations on the design of the scheme.

There will be further opportunities for people to have their say on the design of the R&D tax incentive during the select committee process later this year.

Legislation will be introduced in October for the R&D tax incentive to be in place by 1 April 2019. Eligible businesses paying tax will be able to benefit from this policy from day one.

Over time, the Government intends to have a full package of support for New Zealand’s Innovation system, including support for start-ups.

“We recognise it is vital to have the right kinds of support in place for pre-profit businesses that are in tax loss or those that have insufficient taxable income to benefit from a tax credit,” Dr Woods said.

She has noted concerns that R&D-intensive firms and start-ups would not be able to benefit from the incentive.

The policy issues involved in supporting companies in tax loss through a tax incentive were complex, she said, “but we are committed to having a solution in place by April 2020”.

In the meantime start-ups and businesses in tax loss can continue to get support from the range of grants and incubators from Callaghan Innovation.

Source: Minister for Research, Science and Innovation