Shipley's Venture Fund Claims: Rubbish
National leader Jenny Shipley is wrong to claim that "less research will be done" in Crown Research Institutes because the Government is taking dividends from them for the new NZ Venture Investment Fund, says Minister of Research, Science and Technology Pete Hodgson.
"Jenny Shipley has succeeded only in demonstrating her ignorance of how public science is funded," Mr Hodgson said.
"Research in CRIs and other public research institutions is funded almost entirely through Vote Research, Science and Technology, which will increase by $11.6 million this year. This includes an extra $2.3 million for the New Economy Research Fund and a $2 million increase for the Marsden Fund.
"CRIs do not fund their research from their own cash balances or borrowing. Funding for research is therefore unaffected by the Government's decision to take a dividend from CRIs.
"Most CRIs are now in strong financial positions with very low levels of debt and several have unused cash surpluses. These surpluses are expected to grow, totalling more than $40 million a year over the next three years.
"An Ernst & Young report in 1996 concluded that most CRIs could manage a gearing ratio – the proportion of debt to shareholders' funds – of up to 30 percent. At present it is less than 4 percent and falling.
"Mrs Shipley is also wrong to claim that New Zealanders will pay for the NZ Venture Investment Fund through higher power prices.
"Governments – including National governments – have taken dividends from electricity SOEs, and others, since they were established. Private generators also pay dividends to their shareholders. These are part of the normal cost of doing business in the electricity market and introduce no unusual cost pressures."