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Investing in knowledge (Budget)

NB This statement contains additional information to the statement in today's Budget information pack. All references to increased funding in this statement are net increases in 2000/01 compared to 1999/2000. Figures in the Budget pack statement mostly comprised new initiative funding only and excluded baseline funding increases.

The Government will invest an extra $43.6 million in research, science and technology next year, an increase of more than 10 percent, Minister of Research, Science and Technology Pete Hodgson said today.

The extra funding brings the total public investment in RS&T to $474 million. It includes a record injection of $20.3 million to partner private sector research and development.

"This is a Government that puts money where its mouth is when it comes to building a knowledge economy," Mr Hodgson said. "This Budget puts New Zealand back on track to the target of investing 0.8 percent of gross domestic product in R&D by 2010."

Mr Hodgson said the Government was committed to leading growth in private sector R&D, which is low by international standards.

"We're providing the largest ever increase in Government support for private sector R&D because we want to stimulate it, not just complain about the lack of it."

The support comprises a new $11.8 million grants programme for private sector R&D and an increase of $8.5 million in funding for Technology New Zealand.

Mr Hodgson said the grants programme was being introduced instead of tax deductions for R&D, on advice that it was a more effective means of support.

"Tax deductions, which Labour proposed in pre-election policy, may be unavailable to innovative firms in the start-up phase, when the need for R&D support is often most urgent. The advice to us from the innovation community has supported a grants scheme as a more effective and simpler means of support."

The extra funding for Technology New Zealand takes its budget to $24.7 million. The agency provides dollar-for-dollar support for businesses to invest in new technology, assess and access their technology needs and place research graduates in industry.

"We have also increased public investment in basic research," Mr Hodgson said. "This is the work that builds New Zealand's knowledge base and maintains this country's reputation as a source of world-class research."

The New Economy Research Fund increases by $8.5 million to a total of $50.8 million. It pays for long-term, curiosity driven research projects with an identifiable potential to create new categories of business for New Zealand.

The Marsden Fund increases by $3 million to $25.8 million. It supports investigator-initiated research at the frontiers of knowledge that has the potential to be of international significance.

Funding for Scholarships for Promising Individuals increases by $2 million to $10.7 million. This programme provides awards and fellowships for pre- and post-doctoral researchers, teachers, and technologists.

Mr Hodgson said the Budget also introduced a more transparent way of allocating public investment in strategic research, replacing the Public Good Science Fund with four smaller, better targeted research funds.

Some $37 million has been moved from the former PGSF to the New Economy Research Fund (of which $25 million was previously announced). Remaining PGSF investment has been divided into the following four classes, with new money added to each:

* Health Research – increased by $3 million to $33.4 million.

* Research for Industry – increased by $2.1 million to $171.1 million.

* Maori Knowledge and Development Research – increased by $0.5 million to $4 million.

* Social Research – increased by $0.6 million to $4.3 million.

* Environmental Research – increased by $0.4 million to $84 million.

Funding of $0.5 million is being provided for the new Science and Innovation Advisory Council, which will provide advice directly to the Prime Minister on strengthening New Zealand's innovation system.

"This Budget represents a major commitment by the Government to developing New Zealand as a high-tech, high-skill, knowledge-based economy," said Mr Hodgson.

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