National has begun announcing what it will use its spending allowance in future Budgets on, with Prime Minister John Key today announcing an investment of up to NZ$150 million over five years in the high-tech manufacturing and services sector.
This morning in Auckland Key announced the government would turn Industrial Research Limited into an "advanced technology institute, which will function as the new 'high-tech HQ' for New Zealand".
That NZ$150 million investment over five years would be paid for from the governmen't self-imposed NZ$800 million spending allowance in each of the next five budgets, An additional NZ$80 million for buildings and equipment will come from the newly created Future Investment Fund, set up to handle the proceeds from the proposed mixed-ownership model SOE sell-downs.
New Zealand’s performance in the primary sectors had been driven by good science, much of which was publicly-funded, Key said in a release.
“The Government’s number one priority, as recommended in the Powering Innovation report released today, is to transform and grow IRL by focusing it on supporting industry development. The high-tech manufacturing and services sectors have great potential to achieve the same cutting-edge reputation – but they need the support and expertise of technology-focused research to grow, to increase exports and ramp up productivity," he said.
“High-tech sectors could contribute substantially more to the economy than they currently do. We already have successful companies in this sector, particularly in areas like ICT, biotechnology and medical technology, but we need more of them and we need them to be bigger. Over the next five years, we will effectively double the size and capability of IRL, transforming it into an advanced technology institute with up to 700 staff and with a far greater reach than at present.”
The institute would have a strong business-focused culture, have a nation-wide remit and be close to where the country’s high-tech businesses were located. The institute would have facilities in Auckland and Christchurch, and retain the existing Gracefield facility in Lower Hutt.
“The advanced technology institute will work in close partnership with industry. It will be a natural conduit for engineering and applied sciences graduates, meaning many of our best and brightest engineers and scientists will stay here in New Zealand,” Key said.
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The advanced technology institute would be developed over five years.
“Establishing the advanced technology institute doesn’t add to any of the funding tracks in the Pre-Election Update. We won’t have to take on extra debt to fund this, and our surplus and deficit forecasts remain the same,” Key said.
Estimates showed the establishment of the advanced technology institute would cost in the region of NZ$120-NZ$150 million over five years, in addition to IRL’s current funding.
“This is an average of NZ$24 to $30 million a year of additional funding, which the Government will pay for out of the new operating allowance in next year’s Budget," Key said.
The government has allowed itself NZ$800 million in new spending allowances in each of the next five budgets.
“We will earmark up to NZ$80 million from the Future Investment Fund for capital spending in areas like new buildings and equipment,” Key said.
The future investment fund was established over the weekend to hoard the expected NZ$5-7 billion in proceeds from the pending sell down of minority stakes in four energy companies and Air New Zealand. The government has already committed NZ$1 billion of that for school upgrades.
17 Comments
Alex Tarrant and Christofff ... tut tut ...
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Thank You...iconolast ...I consider myself reprimanded and will have myself duly flogged with a switch from said Poplar as soon as one comes to hand in an effort to remind me not to re-offend.
Once again many thanks....my only comfort is that I was in good company.
You dont half talk rot at times....
Or hoodwinked by National's growth promises.....Labour isnt really socialist by a mile.....ie if you look at both big parties telling the difference is splitting hairs.....
Also if this was being a "socialist" issue the Green's who are even more lefty would be devistated in the polls, in fact the reverse is true....they are up, if only slightly to 9.5%....the trend seems to be heading for 10% on election day if the Roy Morgan poll is running true....12MPs....
http://www.roymorgan.com/news/polls/2011/4711/
Oh wait wasnt that where Donny B promised to take ACT? to 10%? yet oops ACT are down.....pretty consistant polling of 1.5%.....not many signs of them gaining from socialism's demise there...maybe they shgould call Rodney back.....
I think its fear.....ppl are afraid of Labour's spending ways and National's growth promises..so their only alternative is National....
regards
What we are witnessing the world over is the failure of socialism (or rather what happens when socialism goes too far). If you look at Europe, it's the countries with the best social security benefits that are suffering the most. Every country in the OECD is cutting back on social security spending. Actually, socialism would work fine as long as governments fully paid back the money they borrowed during recessions when times are good. Then the overall debt mountain would not keep growing. Touble is, that the voters don't like it and then a Labour government comes along and promises this that and the other and people go for it.
This is not the failure of socialism, socialism isnt really an economic model its a social model......this is the failure of economics and teh form of "free markets" / neo-clasical / laissez faire economics / politics.
"Actually, socialism would work fine as long as governments fully paid back the money they borrowed during recessions when times are good."
LOL, what you are almost at is Keynes...in household economics 101 you save excess in the goods times as a rainy day fund for the bad. Translate that into Govn books and this means your neutral tax take gives excess tax in the good times that you invest...in the bad times the tax take is in-adequate but you draw the fund down.....plus you earn interest and not pay debt....."but oh no we are paying too much tax that is theft".....result we have no backstop.....no rainy day fund to save us....voodoo economics...this isnt socialism...nothing to do with it.
"a Labour government comes along" HC et al paid down our Natioanl debt...in effect we had no public debt to speak of, but the risk to us is the massively exploding private debt. This is nothing to do with socialism.. The ones who "came along" are National who cut the taxes for the well off surprise, surprise "people go for it".....voodoo economics at its finest moment.....
regards
steven: Yes I see your point, there is a difference between economic policy and socialism. I suppose that socialism is OK as long as in the long run the debts taken on during the bad times are paid back (the basic theory of Keynes) - which we both know is not the case in reality. HC and their govt did reduce the national debt, but did not fully pay it off and in fact started adding to it all over again even though 'times were good'.
Perhaps a return to some kind of Gold standard would ensure governments could not simply keep creating debt money out of thin air. There is a very good article here about this by Peter Lyons
Limited socialism is OK....full socialism is hell on earth IHMO....somehwere there is a balance between socialism and I'll call it libertarianism.....and its some cases it can be cost effective to be socialist.....
For instance education and health are lower cost on GDP than private provision.....but small private enterprise seems to have a huge edge on efficiency......so far I will take convincing that large private corporations are efficient....Ive worked in them and tehy are not IMHO....they are just as bad as large govn organisations....
I think any reasonable economic system will work...keynes has some good models for depressions....and how to avoid them.....they seem consistant and work.....but keynes isnt the answer in every situation, we saw that in the 70s when his work was perverted by the left.....right now Freedman has been perverted by the right.....I think the short answer is Pollies are good at fixing things....they want to be seen to do things, but when nothing needs fixing they fiddle....the result is worse IMHO.
Gold standard wont work in today's complex world......fiat money can work it needs to be managed intelligently IMHO....which is an oxymoron when put with Pollies and/or greed in the same sentence which is what we have now.
I think the answer is avoid extremes in any school of economics and pick the best school for the situation and not try and just one schoolwork everywhere and everytime....
Thanks I will have a read of,
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=107…
looks interesting.....when i get the opportunity....Im a week behind schedule (due to no fault of mine) so I could be very busy today if ithers finally produce....or twiddling my thumbs........
:/
regards
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